The economics of free

I’m a big fan of things that are free. Isn’t everyone?

Chris Anderson, editor and chief of Wired Magazine was on Charlie Rose’s show discussing his book, Long Tail (hat tip to John for the original tip).

Very interesting ideas about the economics of the web, along with his latest cover story from Wired Magazine.

Common Craft also had some interesting thoughts on Anderson’s ideas:

I want to talk a bit about how “Free” has impacted Common Craft…

Being a small company, we need to keep costs down, and the free economy has been a huge help…

  • Bandwidth: We pay zero bandwidth costs to serve our videos online.
  • Web hosting: Our web site is essentially free to us thanks to the fine folks at RainCity Studios.
  • Marketing: We spend little, if anything on traditional marketing.
  • Communication/Collaboration: We’re heavy users of Google’s free business services
  • At the same time, we’ve oriented our business around freeness.

Let’s pretend that we started making videos like RSS in Plain English with the purpose of making money from them directly, perhaps by charging for access. Here’s what wouldn’t have happened:

  • We wouldn’t have put the videos on You Tube, Blip.tv, etc.
  • The videos would have never been spread across the Web via bloggers.
  • We would not have a popular blog or videos with lots of views.
  • There would not be demand for our custom services
  • We would not have worked for Google, H&R Block, Redfin, etc.
  • We wouldn’t have a recognizable brand.
  • We would not be so happy right now

In case you didn’t know, every Charlie Rose interview is also available for free on the Interweb.