Monday 12 October 2009

‘Freemium’ the future for your business online?



I have just finished reading Chris Anderson’s brilliant new book, “Free: The Future of a Radical Price”. Chris Anderson is the editor of Wired and the author of the 2006 bestseller “The Long Tail”. In Free he outlines how techno­logy has tur­ned “free” from a mar­ke­ting trick into a new eco­no­mic model.

The book examines the economics of ‘free’ and the busi­ness models built around it, contrasting 20th Cen­tury Free (it’s free, but you end up paying for it anyway) with 21st Cen­tury Free (somebody’s paying, but it’s pro­bably not you) and finally introduces “Freemium” (free + premium), which he thinks is the first really new busi­ness model of the web and the future of Free online.

Freemium sees companies gives away 95% of their online ‘stuff’ to customers for free, whilst subsidising this with the 5% of customers willing to pay for a premium version of the product or service.

It’s all really thought provoking right from the start, where Anderson summarises technological trends and the fact that the cost of the building blocks of all electronic activity – storage, processing, and bandwidth – have fallen so far that the actual cost approaches zero.
Free stuff is spreading because of one fundamental difference between the bricks-and-mortar world (which Anderson calls the world of atoms) and the digital world (which he calls the world of bits). In the world of atoms, each item is expensive to produce and distribute; in the world of bits, it costs close to nothing. Generation Y understand this and therefore resent paying for anything that ultimately costs nothing to produce.



One of his strongest arguments is in this digital age there is unstoppable downward pressure on the prices of all things “made of ideas.” A real wake up call for hundreds of industries including music, entertainment, education, photography, journalism, computer software and of course, the encyclopaedia business!

“In the digital realm you can try to keep Free at bay with laws and locks, but eventually the force of economic gravity will win.”




In keeping with the theme ... here's a free download of the book.

Thursday 8 October 2009

How to get more people using stairs...

Superb viral on YouTube.

Advertising agency DDB and Volkswagen teamed up for an experiment they called the 'Fun Theory', in an ambitious attempt to try and change people's behavior in Sweden.

The transformation of subway stairs into a piano increased stair use by 66%.

Perhaps we should set try the same in London to get people using the stairs on the Tube.

Tuesday 6 October 2009

Brilliant summary of social media

If you had any doubts about the importance of social media, just spend the next 5 minutes watching this brilliant video. Definitely one I will be using for the opening of my presentations in the future.