Making Money By Giving Stuff Away For Free
Have you ever considered what you can get for practically free today that you used to pay a lot of money for?
- Computer Performance
- Long Distance Telephone Calls
- Computer Storage
- Bandwidth
- Music
- Web Server Space
- Domain Names
What’s been the impact of the value of these commodities becoming almost “too cheap to meter?” It’s opened up opportunities in other areas, to sell new services and innovate new business models. And it’s taken innovation out of the hands of invisible ‘gatekeepers’ and into the hands of the people.
That’s the message of Chris Anderson’s keynote speech at Nokia World 2007. This video explains the impact of these and many more cheap commodities. It focuses on how cheap commodities like transistors and online storage can be ‘wasted’ on the stuff that helps technology connect with people and enhance customer experience.
What makes this work is the fact that the commodity USED to be expensive, so even though it’s free now, when you give it away the customer believes he’s receiving something that’s more scarce than it really is. A great example is Yahoo, who is now giving away infinite online storage to their Yahoo Mail customers (following Google, who offered 2 GB a couple of years ago).
Another example is in music, where MP3s are now becoming cheap commodities used to promote live performances (where have you heard THIS prediction before?). It places the value on the really scarce commodity - the performer’s time - and removes it from the commodity that is essentially free to reproduce - the MP3.
Anderson suggests that things like manufacturing will one day join this list, and a lot of products we spend money on today will essentially be free in the future. It’s the subject of his book, The Long Tail.
In the lead-in to his video, Anderson discusses what the impact would be of having free electricity. This is one of the things that might eventually become free, if companies like Nanosolar succeed.
Watch the entire video, then consider this: what formerly scarce commodity could you give away for free today, that would open up your business to new opportunities?
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