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Sunday, September 27, 2009

Free from any Source

Finally getting to Free: Future of a Radical Price, by Chris Anderson. I did not get it during the free download period, but it was just as free from the library. An easy and thin read, covers many useful examples, good read.
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1 comment:

Mark Montgomery said...

Haven't read it, but am very familiar with the philosophy, which is at its core a purest communist philosophy that some predators in capitalism have done well leveraging.

From an economist perspective, freeism is the result of enormous over investment in the medium that began in about 1997, took a minor break after the bubble burst-- we are only now seeing the beginning signs of a true market correction relative to actual performance of hundreds of billions invested badly.

The interesting aspect from a social perspective, and market in private equity, is that the political ideology of CA in particular aligned with the strategic economic development tactics of price war and scale.

The trouble with price wars is that there are almost always bigger sharks in the water -- CA started the VC wars, but wasn't positioned well for a long fight. Asia is.

If you look at the actual liquid investment required of such models prior to break even, most of them are just amazing. While I understand the strategy all too well from the elephant perspective, several of which have senior people who are friends, it's the most destructive predatory pricing practice perhaps in all of human history, and has been fueled to date by far too much investment, some of which I fear may have deeper and more dangerous intent than simply conquering a market.

Very dangerous territory -- customers would be better off with paying jobs-- so would their vendors be IMO.

Just for fun compare the world's ad budget to the Gross revs of industries most likely to be replaced by freeism on the Web-- actually well under way -- I did this a few years ago by estimates -- it was alarming. This medium isn't TV - it can replace far more industries, with much more functionality, and with global displacement. To me the debate is based on ideology and ignorance of economics (exception being those with strategic interests of course), but is nonetheless popular. So was 120% mortgage financing with no income verification.... Similarly, this phenom has been driven by massive subsidies from every type of organization. It isn't sustainable in current form. Few apparently see the ramifications. .02- MM

4:11 PM

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