I finished reading Chris Anderson’s Free on Scribd for free. I thought his book was good and I am now more convinced than ever that a lot of things are going to continue becoming free. Even before I read Free I have supported the idea that certain things that we used to pay for should now be free. In fact, free might be the only price the market will bear.

I have no intention of reviewing the book. I thought it was good. That’s all.

I do want to talk about my thoughts of the price of $0. There is probably no greater incentive in all of marketing than free. How do you beat free? I guess you could pay people to take your products but, that seems highly unsustainable and perhaps stupid.

My perspective on free is one based on economics and not trends or fads or what seems popular. A price is only as good as what the market is willing to pay. I can try to sell a house for $1 million dollars but, if there are no buyers willing to pay, I will never see the $1 million dollars.

I could sit on it and wait and hope for someone to buy my house for the price I set. There are costs associated with waiting. At what point does it become counter-productive for me to continue waiting? Certainly, if I go bankrupt trying to service the payments, bills, or taxes on the house, I should have probably lowered the price.

Now, if I ran a business with a product that less and less people are willing to pay for, when should I stop trying to fight the forces of economics and find a new business model? I could try and hang on to the past and blame it on “thieves” or “pirates” stealing my product and eventually go out of business. The reality is that not enough people feel your product is worth the price you want to sell it at.

The market likes your product and will be more than happy to use it if it was at a price they feel it is worth–that price happens to be $0.

No one can run a business solely on giving things away. Businesses need to make money. The question is how do you make money if the market value of your product is $0?

The catch with all this is that no one has a concrete answer and it varies by industry and product. I work in the video game industry and it is different than the music industry or the movie industry. We are all considered entertainment but, what works for music might not work for games.

I feel it is just a matter of time before people feel that the market value of games should be $0. Right now, people still pay for big titles and games on mobile devices. When is that going to stop? There is a whole market of online games that are completely free and monetizing these games have become more and more difficult for smaller companies.

The one law of business that people tend to forget is that the consumer is the one in control. This law gets distorted with government intervention but, the main idea is still the same. Businesses exist to serve the customers. We cannot demand customers to do what we want, they are our masters. Those who don’t serve the market disappear unless a rich uncle keeps them around.