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Publishers Weekly® Reviews
- Reviewed in: Publishers Weekly, page 119.
- Review Date: 2009-04-27
- Reviewer: Staff
In the digital marketplace, the most effective price is no price at all, argues Anderson (The Long Tail). He illustrates how savvy businesses are raking it in with indirect routes from product to revenue with such models as cross-subsidies (giving away a DVR to sell cable service) and freemiums (offering Flickr for free while selling the superior FlickrPro to serious users). New media models have allowed successes like Obama's campaign “billboards” on Xbox Live, Webkinz dolls and Radiohead's name-your-own-price experiment with its latest album. A generational and global shift is at play—those below 30 won't pay for information, knowing it will be available somewhere for free, and in China, piracy accounts for about 95% of music consumption—to the delight of artists and labels, who profit off free publicity through concerts and merchandising. Anderson provides a thorough overview of the history of pricing and commerce, the “mental transaction costs” that differentiate zero and any other price into two entirely different markets, the psychology of digital piracy and the open-source war between Microsoft and Linux. As in Anderson's previous book, the thought-provoking material is matched by a delivery that is nothing short of scintillating. (July)
'Long Tail' author takes a free ride
When Chris Anderson wrote his first book, 2006’s The Long Tail, he made some of his research, ideas and conclusions available free to readers of his blog. He was rewarded with thoughtful feedback and questions, not to mention a ready-made audience for the book. His new book, Free: The Future of a Radical Price, takes a page from that experience via case studies with a foundation of free, plus a tour through the history and psychology of “freeconomics.” By “free,” Anderson doesn’t mean gift-with-purchase; he means no-strings-attached giveaways that reap rewards through sales of other products or services, or information that can be used to build brand and customer loyalty.
The author, whose day job is editor-in-chief of Wired (available free online), explores print advertising models and their new online counterparts and also describes strategies employed by pioneers and modern-day masters of free-centric business models. For example, in 1904, Jell-O created demand for its strange new product by giving away recipe booklets; in 2008, science fiction writer Neil Gaiman offered for four weeks a free download of American Gods. Obviously, Jell-O’s strategy worked, as did Gaiman’s: American Gods became a bestseller, and independent-bookstore sales of his other books increased by 40 percent.
Also valuable: a willingness to take risks in pursuit of capturing the attention of media-savvy, demanding consumers with Web-centric lives. Anderson writes, “If you’re controlling scarce resources (the prime-time broadcast schedule, say) you have to be discriminating. ... But if you’re tapping into abundant resources, you can afford to take chances, since the cost of failure is so low.” Sections like “The 10 Principles of Abundance Thinking” and “50 Business Models Built on Free” will help readers grasp (and apply) freeconomic principles, while sidebars such as “Why do free bikes thrive in one city, but not another?” ask and answer intriguing questions. As with The Long Tail, Anderson has crafted an edifying, entertaining read—one that will be exciting and useful for readers looking for a fresh approach to business.
Linda M. Castellitto writes from North Carolina.