Am somewhat amazed by the backlash against Chris Anderson’s new Wired piece, “Free! Why $0.00 Is the Future of Business“. Charges that he wrote a “communist manifesto” were probably the harshest ones, but many people I’ve been talking with, both in person and virtually, share somewhat of that same opinion: “something is wrong if you have to give away your value” and “we can’t all make money by grabbing mass numbers of eyeballs in order to deliver advertising to them.”

They’re missing his point and he missed one I think he shouldn’t have.

Anderson’s “it’s the falling costs, stupid” premise can be summed up in this paragraph taken, ironically, from his article in the Economist magazine:

The dominant business model on the internet today is making money by giving things away. Much of that is merely the traditional media model of using free content to build audiences and selling access to them to advertisers. But an increasing amount of it falls into the free-sample model: because it is so cheap to offer digital services online, it doesn’t matter if 99% of your customers are using the free version of your services so long as 1% are paying for the “premium version”. After all, 1% of a big number can also be a big number.

Free is a major shift and a huge trend, especially with any sort of online service. If you thoroughly read Anderson’s article in Wired you may or may not buy into the argument he makes, and may even accept his premise that free is driven primarily by the fall in producer costs as the costs associated with delivering them continue to drop online.

But wait just a minute.

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