The Big Giveaway

Posted on May 7, 2008 

The Big Giveaway

International flights that don’t cost a thing? Books or music you don’t have to pay for? Even companies handing out cars? Traditional business is based on the certainty that everything has a price. But now US writer Chris Anderson believes we are at the dawn of a new consumerist era, governed by what he dubs ‘freeconomics’. He talks to Stuart Jeffries.

“The internet has revolutionised economics,” says Anderson down his cellphone as he drives to work in California. “On the web, the marginal costs of manufacturing and distribution are zero, or close to it. This means that you can now experiment with giving away one thing to sell something else much more than you could in the pre-internet era. Or you can experiment with third-party support, where you give away a product to sell attention to another. The traditional model is of giving 1% of goods away as samples in order to sell 99% of the product; on the web, you can give 99% away as free samples to sell 1%.” You’re kidding, I say to Anderson. And still make profit? “Sure. Why not?”

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