'Free: The Future of a Radical Price' by Chris Anderson (Hyperion, 2009)

As editor-in-chief of Wired magazine, Chris Anderson is expected to think big thoughts.

As editor-in-chief of Wired magazine, Chris Anderson is expected to think big thoughts. After all, Wired has been known for creating and spotting trends since its inception 16 years ago. In his newly released “Free: The Future of a Radical Price,” Anderson codifies an exciting and not necessarily new trend: Getting things for free.

First in an article in the February 2008 Wired and now in the book, Anderson puts forth – successfully – the premise that getting things for free means you can get much, much more than you pay for.

He opens with the story of King Gillette, a frustrated, if prolific, inventor who actually took his boss' advice to invent something people use and throw away. You may be familiar with the Gillette disposable razor? 'Nuff said.

Move forward a century and see other examples of free: Give away the cell phone, sell a monthly plan; install coffeemakers in offices at no charge, sell pricey gourmet coffee packets; deliver music for free online to gain an audience, make money with more concerts and premium offerings.

Where Anderson's insights get interesting is in considering the impact of the Internet and digitalization of information and services on “free.”

“The rise of ‘freeconomics' is being driven by the underlying technologies of the digital age,” he writes. “Just as Moore's law dictates that a unit of computer processing power halves in price every two years, the price of bandwidth and storage is dropping even faster. What the Internet does is combine all three, compounding the price declines with a triple play of technology: processors, bandwidth, and storage. As a result, the net annual deflation rate of the online world is nearly 50 percent, which is to say that whatever it costs YouTube to stream a video today will cost half as much in a year. The trend lines that determine the cost of doing business online all point the same way: to zero.”

The impact moves far beyond mere online businesses. Just look at the freefall of the print advertising industry. With content available for free online, what's to keep readers buying newspapers and magazines? What's to keep advertisers spending for traditional advertisements?

For services firms like PR agencies, the concept of free presents an interesting challenge. After all, a firm's “product” is its people, their skills and their time. Giving away time means giving away revenue.

The challenge for PR firms and any other organization that competes on skills vs. a widget will be to identify what services are truly valued by clients, and then giving away the low- or non-valued work.

Smart clients will always pay for what they see value in, and the smart, successful agencies will be those that figure that out quickly.

“Free” is an interesting read, and in keeping with its premise, the Wired article that was its incubator offers similar insights – and it's free online: http://www.wired.com/techbiz/it/magazine/16-03/ff_free?currentPage=1.

Laura Grimmer is CEO and founder of Articulate Communications.

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