I recently read (and recommend) the book Free: The Future of a Radical Price by Chris Anderson. If nothing more, reading the book will allow you to argue for-or-against what it says rather than argue for-or-against what it doesn’t say, but what you think it says.
While the book’s title includes the word “future,” much of the book is about the past — and about the history of the use of “free” in marketing. The first chapter, for example, includes a re-telling of the history of Jello and the role of a custom published* “how-to” book (a Jello recipe book) to popularize the product. By publishing and distributing free the book to millions of homes nationwide, Jello’s producers created demand for the product, or, as they say in the marketing biz “pull.”
More importantly, the book provides someone who enjoys pretending to be an economist (say, me, for example) with enough knowledge about such concepts as “cross subsidies” that they can actually get through an argument that “free” is a marketing concept that is as rational as, say, spending millions of dollars on TV advertising starring chimpanzees or other such logical marketing strategies.
Speaking of segues, I’ve been noticing lately that, even in the context of a big debate over their subscription model, the Wall Street Journal Online is feeding full small business-related new stories (free) to my Google Reader account, while the same stories are locked-down behind the pay-wall of their website (not free, see below).
One of two things could be happening: 1. They haven’t realized what they’re doing, and thus I’ve just blown it for everyone, or 2. They’re running a test related to the new Google Reader “sharing” feature to see if stories with full-feeds are shared more than those with truncated feeds (“headlines only” or “headline and excerpt” only).
*Chris doesn’t use the term “custom publishing” but since that’s a big part of what I do in my day job, I’m calling it by the term we use today.