Book Reviews: 'Free' by Chris Anderson; 'Cheap' by Ellen Ruppel Shell

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By Rob Pegoraro
Sunday, July 26, 2009


The Future of a Radical Price

By Chris Anderson

Hyperion. 274 pp. $26.99


The High Cost of Discount Culture

By Ellen Ruppel Shell

Penguin. 320 pp. $25.95

Odds are, you reached this review in one of two ways: by paying for a copy of today's print edition or by downloading it to a computer for free. It's the same text either way. So if you shelled out cash for a paper copy, do you feel you overpaid? If the story on your screen cost you nothing, do you worry that you should have paid something?

Your gut response may determine whether you agree with Chris Anderson, editor of Wired magazine, or Ellen Ruppel Shell, a Boston University professor. In "Free," Anderson suggests that consumers could find many things selling for less, or even for nothing, if companies only used the right business model. In "Cheap," Shell contends that the wrong model -- a transnational capitalism that often puts producers and consumers thousands of miles apart -- suckers us into paying unsustainably low prices, which in turn depresses our own wages.

Anderson can't resist indulging in some of his magazine's the-Internet-is-changing-everything exuberance when arguing that dropping the upfront price of an item to zero can make a company more money in the long run. But he presents solid evidence for that view. He begins with such historical examples as the 19th-century saloons that offered free lunches to anybody who bought a drink. The Internet era has simply made "freeconomics" easier. Computer processing power and memory have become ever cheaper, and start-ups can get going by leasing a share of third-party server facilities instead of deploying their own. These incremental advances can combine to make a product too cheap to meter or sell on an individual basis. (This segment represents the book's weakest portion, but not because of its logic: Charlottesville blogger Waldo Jaquith found that much of it, plus a few sentences elsewhere in the book, matched passages in Wikipedia and other sources. Anderson confessed to the mistake, blaming it on last-minute revisions, and pledged to fix it in digital editions of the book; a copy posted to Google Books has citations or revisions in these cases.)

So if the average consumer no longer pays, who does? "Free" outlines how a company can shuffle an item's cost from everyday customers to other parties such as advertisers or pickier users willing to pay for a premium version. These aren't hypothetical examples: Anderson demonstrates how such firms as a San Francisco developer of health-care software, a Pasadena, Calif., online stock broker and the developers of a popular role-playing game have profited from these strategies.

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