The Economics of Free

The internet is creating a problem for many industries who rely on paid content for their users.  The music industry as Anderson says is “stumbling to free to slow its decline”.  The internet has made it hard for businesses to function the same way they were before, pushing them to create a new business model.

            Anderson talks about different ways for businesses to get money. Advertising in more creative ways like he describes Obama advertised inside of a video game.  We get ads in real time through video games.  Another option for companies is to create a freemium with an upgrade option.  These are the things that you would be able to access as a free customer, but if you pay you won’t have advertisements and gain other cool features.  Stemming from this idea is the idea of subscriptions. Anderson uses a great example with Disney.  Kids are going to want to upgrade and get these cool features in the next game they are addicted to and parents are going to give in eventually so that their kids stop whining about it.

            Selling merchandise is another way of getting money especially if you are releasing free content.  In the case of the music industry, people are downloading music illegally, but they can’t download a limited edition hat.  Concert sales become the most lucrative for artists today because of the decline in people buying music.  Though this isn’t necessarily a bad thing.  If your content was free than your popularity would grow just as in the case of Mac Miller who’s music is on Youtube.