Chris Anderson, the Wired editor who coined the term “long tail”, has written a lengthy piece on Free – why $0.00 is the future of business, and is writing a book on the subject.
It caught my eye in part because of what Sun’s Jonathan Schwartz told me the other day: the only acceptable price is free.
The idea must terrify Microsoft, which makes most of its money from software licenses, while letting third-parties take the profits from custom development and services. Companies are less vulnerable if they sell both hardware and software, or have strong services departments.
The paradox here is that even when the marginal cost drops close to zero, there still has to be a business model. Something I am still trying to figure out as I give away content on this blog.