Beware: Free comes with a price

There has been some healthy debate surrounding Chris Anderson’s latest book, Free. I’d like to join in and give the world a definitive answer regarding technology’s ultimate impact on the pricing of intellectual property but I left my crystal ball at the track. A not-so-subtle fact lost in this debate is that price is not the same thing as cost.

Every consumer decision - even those without a price attached - comes with a cost. Sometimes it’s time loss. Sometimes it’s a drop in status. Sometimes it’s a lack of convenience.  Sometimes, in the case of most free online services and applications, the cost is allowing yourself to be exposed to ads. Or having to deal with a lack-luster user experience, having to waste time digging for what you’re looking for. (Yeah, I’m talking to you, YouTube.)

There are thousands of free products and services available to the American consumer right now. Many won’t survive despite the to-good-to-be-true price.

Pricing models are important. But giving your product away doesn’t guarantee success. What’s more important is making sure the value of your product exceeds the costs to consumers (both monetary and otherwise).

Sometimes free costs too much.