Anderson’s FREE-for-All Thoughts

The current issue of Ad Age has an interesting interview with Chris Anderson sharing more insight into his to-be-published book, FREE: Why $0.00 is the Future of Business.

Anderson is the editor-in-chief of Wired Magazine and his take on how, despite subscription fees and cover prices, magazines are in the business of FREE might surprise you.

CHRIS ANDERSON: “Magazines are in the essentially free business. At Wired, we charge $10 a year for a subscription when the actual cost to us is more than 10 times that much.

So why do we charge anything? We charge a nominal fee simply as a psychological fee that shows that you want it -- which allows us to charge advertisers more. A single penny does it. We charge $10 because we don't want to devalue the product, because that would be sending the wrong message. But from our perspective it's essentially free.”

Anderson also shares smart thinking on whether or not getting something for FREE empowers customers or does it dis-empower them.

CHRIS ANDERSON: “I'd like to think that getting more for less is empowering. As we shift from the currency being money to attention and reputation, in a sense, the field becomes a relatively level one.

We all have attention and respect we can offer. That's a far more democratic access to the marketplace. We all have attention that has some value. As more and more becomes free, we're able to deploy that wherever for whatever.

Basically everything is available to everybody -- not necessarily at all tiers and all features, but the walls to entry to products and services are falling faster than ever before.”

SOURCE: Ad Age article | Feb. 25, 2008

Comments

[Barbara von Thessen]

Ultra interesting! http://www.spymac.com/details/?2347210

[BIG Kahuna]

Yea, then there is the opposite thinking: The more it costs the better it is. That's where branding comes into play. We give away a free SEO analyis:

http://www.brandidentityguru.com/analysisForm.htm

This is a good tool to offer something free and of value. But ultimately the goal is bringing in new SEO business for a fee.

[johnmoore (from Brand Autopsy)]

Scott ... then you probably found this take from the article interesting when Anderson said ...

"It reminds us that the original Stewart Brand quote is "Information wants to be free." The actual quote also says some information wants to be expensive. What he meant was that commodity information wants to be free and noncommodity information wants to be expensive. I could give away my book and sell you speeches, which are targeted. A band does exactly the same thing: commoditize the album and then monetize the performance. What Murdoch is exploring is the difference between a commodity and a noncommodity."

[Rob]

John-

Very interesting. I've read the FREE article and agree with just about everything Chris says. However, he almost disproves his thesis when he says there is psychological value in charging something ($10 or a penny) for a product that is virtually free.

If charging something raises the psychological value (if not the real value--and what's the difference?), then what does giving it away really do? Does it lower the psychological value?

Which is more valuable--a search at Google or a search at LexisNexis? Clearly one is expensive and offers very specific information, the other is easy, broader (often meaning more work to find what you are looking for), and of course, free. The WSJ's fee-based online articles have a much higher perceived value than the same news at the NYT or WP. All have value--but very different value propositions.

Pricing plays an enormous part of in helping consumers determine the real value--free or fee.

At the risk of repeating what you've already pointed out, information does want to be both free and expensive. Sometimes the same information wants to be both.

[Jacob Morgan]

As I commented on my blog, I don't necessarily agree with Chris. I think the currency is shifting from money to attention. That is not to say that things are now free, we are just paying with something different.

Google and Yahoo aren't giving things away for free, they are investing in our attention.

[DUST!N]

Does this answer the question "Would we would miss AdAge?"

Not sarcastic, just enjoying the irony.

Love the article. Nice find.