Interesting Kevin Kelly take on the recent WIRED title story...
http://www.kk.org/thetechnium/archives/2008/01/better_than_fre.php
Another take...
http://www.techdirt.com/articles/20061026/102329.shtml
Original article
http://www.wired.com/techbiz/it/magazine/16-03/ff_free?currentPage=all
PS: Speaking of Abundance. Interesting book on three major trends ((Abundance, Asia, Automation)), although the term "Abundance" was used in a slightly different context and with less emphasis on digital vs real goods...
http://www.amazon.com/gp/product/1594481717/ref=cm_rdp_product/102-4020406-0906530
]]>Interesting summary from Wired...
The huge psychological gap between "almost zero" and "zero" is why micropayments failed. It's why Google doesn't show up on your credit card. It's why modern Web companies don't charge their users anything. And it's why Yahoo gives away disk drive space. The question of infinite storage was not if but when. The winners made their stuff free first.
Traditionalists wring their hands about the "vaporization of value" and "demonetization" of entire industries. The success of craigslist's free listings, for instance, has hurt the newspaper classified ad business. But that lost newspaper revenue is certainly not ending up in the craigslist coffers. In 2006, the site earned an estimated $40 million from the few things it charges for. That's about 12 percent of the $326 million by which classified ad revenue declined that year.
But free is not quite as simple — or as stupid — as it sounds. Just because products are free doesn't mean that someone, somewhere, isn't making huge gobs of money. Google is the prime example of this. The monetary benefits of craigslist are enormous as well, but they're distributed among its tens of thousands of users rather than funneled straight to Craig Newmark Inc. To follow the money, you have to shift from a basic view of a market as a matching of two parties — buyers and sellers — to a broader sense of an ecosystem with many parties, only some of which exchange cash.
The most common of the economies built around free is the three-party system. Here a third party pays to participate in a market created by a free exchange between the first two parties. Sound complicated? You're probably experiencing it right now. It's the basis of virtually all media.
In the traditional media model, a publisher provides a product free (or nearly free) to consumers, and advertisers pay to ride along. Radio is "free to air," and so is much of television. Likewise, newspaper and magazine publishers don't charge readers anything close to the actual cost of creating, printing, and distributing their products. They're not selling papers and magazines to readers, they're selling readers to advertisers. It's a three-way market.
Source: http://www.wired.com/techbiz/it/magazine/16-03/ff_free