Posted by: buzzmckenna | July 3, 2008

Prepare to enter the land of the free, as long as people buy it

  • The Age
  • Peter Munro
  • June 22, 2008
  • Page 1 of 6

IT’S the business paradox of the noughties: the more you give away, the more money you can make. For consumers, it delivers the ultimate reward: something for nothing.

The revolutionary trend has been branded “freeconomics”, and last week the music industry became the latest to join in with the delayed launch of Qtrax, the first 100% free and legal music download service for users in the US.

It adds to a growing stock of products and services being given away. Newspapers, telephones, flights, drinks and divorces are on offer free of charge. Games, bicycles, books and cars, WiFi, financial help and travel guides are also priced to go at absolutely nothing. No matter what you are looking for, there are few limits to what is being “freed”. Increasingly, money will become no object at all, changing the way we live, do business and play.

The revolutionary idea of freeconomics holds that freewheeling will soon become the norm rather than an anomaly. The idea comes from Chris Anderson, editor-in-chief of Wired magazine, who argues it will become the dominant business model of the future. And businesses that don’t follow suit won’t survive the digital age. “The moment a company’s primary expenses become things based in silicon, free becomes not just an option but the inevitable destination,” he has said.

For consumers, it could mean mothballing your wallet as more and more goods and services are given away. For businesses, the challenge will be finding new ways to make money from nothing. Free photocopies with printed advertisements on the backs of pages; free books to promote paid author speaking tours and licensing rights; free electric cars in exchange for signing up to a power contract.

On Qtrax, millions of songs from artists such as Radiohead and Amy Winehouse can now be downloaded legally for nothing online, with the unprecedented backing of major labels Universal Music Group and EMI. It’s a bold strike from the music industry, which will recoup revenue from advertising, to cash in on what is being called the free economy of the future. Continued…

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