One of the issues we’ve had about Chris Anderson’s discussion about the ‘free economy’ is that we wondered whether there really were enough advertising dollars to go around to support it. Ah-ha, Chris Anderson says – not so fast! Ad-supported free is not the same as Real Free! He explains a little more in a recent blog post:
There are at least three classes of free:
The first is the use of “free” as a marketing gimmick: “buy one, get one free”… The second form of free is the “three-party market”, which is to say the world of advertising-supported free media. That’s most radio and broadcast television, most web media, and the proliferation of free print publications…
Finally, there is what I call “real free”. Products and services that don’t cost most consumers anything at all, either in cash or ad clutter. (Most of this is online, where the marginal costs are near zero). This includes companies that use the “freemium” model (where a minority of paying customers support a majority of non-paying customers, as in Flickr and Flickr Pro or the growing world of online games), all those companies that are in the pre-revenue part of their evolution, and the entire “gift economy”, from Wikipedia to the blogosphere. This last category is impossible to properly quantify, especially since much of it has no dollar figure attached at all.