A taxonmy of free

Classifying business models of how *stuff* can be free on the web. Taken from an interesting talk called The Economics of Free by Chris Anderson (the author of The Long Tail).

These are more notes for myself, but thought I would blog it on the way.

Different ways things (on the web) can be free:

  • Cross subsidy – give stuff away charge for something else. In the traditional sense this would be giving razors away and selling the blades. In the technology world this may be giving away hardware and charging for software or subscriptions.
  • Ad supported – Magazines and newspapers are traditionally supported by advertising.
  • Freemium – traditionally very small samples have been given away (e.g. perfume). Many web models are moving towards giving away alot for free and charging for the special stuff.
  • Digital economics – give something away to market something else. For example, musicians giving away their music to promote their tours. Or service businesses giving away information to attract customers.
  • Marketing purposes – simply creating stuff (for fun or for real use) to help promote a cause or business.
  • Gift economy – sometimes people just want to do stuff for free, think open source, writers/bloggers, Wikipedia.

(Thanks to Tom for tip to the video)

Categories: Web