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Tuesday, July 07, 2009

Free is Not

Gladwell in the New Yorker looks at the curious consequences of free: Priced to Sell, Is free the future?. Reviewing “Free: The Future of a Radical Price” by Chris Anderson. Have not read the Anderson book yet. Gladwell makes the case that ideas can be replicated 'freely' today, but not really at zero cost. The idea of 'free' has interesting psych effects on people (see Ariely), it creates nonlinear demand. Yet free is really only very low cost of distribution. Multiplying it by nonlinear demand creates high costs. Also some distributors like Amazon/Kindle are using this anomaly to load more costs into distribution so that the writers see less of the pay. So in the end who will be willing to write?

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