The future of a disruptive price

FREE

20th vs 21st century economics

“In a competitive market, price falls to the

marginal cost.”

Lesson: Round Down

Joseph Bertrand, 1883

1963: $1.05 $100

The Fairchild 1211 transistor

1965: $1.05 $1.05 1967: ------ $0.50

RCA tube 1211

Competing with Free: Microsoft

1970s:

Competing with Free

1980s:

Competing with Free

1990s:

Competing with Free

2000s:

If you can’t beat them, join them

1. The best model is a mix of paid and free content. 

2. You can’t charge for exclusives that will just be repeated elsewhere. 

3. Don’t charge for the most popular content on your site. 

4. Content behind a pay wall should appeal to niches. 

5. The narrower the niche, the better.

Newspapers: Not “free vs paid” but ad-driven free vs freemium

Alan Murray, wsj.com

The Laboratory: Games

1) People will pay to save time

2) People will pay to lower risk

3) People will pay for things they

love

4) People will pay for status

5) People will pay if you make

them (once they’re hooked)

Will Obama criminalize FREE?