Author of machiavelli.net, proud father of three, interested in shaping network society. Welcome to my blog.the economics of free
for about a year now Chris Anderson has promised us his followup to the Longtail, Free. Here it is as the cover story of next months Wired. A must read for anyone who wants to understand the instituitional ecology of the networked political economy.
excerpt:
(…) But free is not quite as simple — or as stupid — as it sounds. Just because products are free doesn’t mean that someone, somewhere, isn’t making huge gobs of money. Google is the prime example of this. The monetary benefits of craigslist are enormous as well, but they’re distributed among its tens of thousands of users rather than funneled straight to Craig Newmark Inc. To follow the money, you have to shift from a basic view of a market as a matching of two parties — buyers and sellers — to a broader sense of an ecosystem with many parties, only some of which exchange cash.
The most common of the economies built around free is the three-party system. Here a third party pays to participate in a market created by a free exchange between the first two parties. Sound complicated? You’re probably experiencing it right now. It’s the basis of virtually all media. (…)
