You probably remember that Chris Anderson launched his Long Tail book idea with a feature article in Wired magazine a few years ago. He's at it again with this article called Free! Why $0.00 is the Future of Business. As is the case with everything Chris writes, it's well worth reading. It's also a nice teaser for his next book, simply titled FREE and due out next year. (See the pattern?... ;->)
The article lays out several options on how to leverage "free" in a product mix. Here's my favorite excerpt:
People think demand is elastic and that volume falls in a straight line as price rises, but the truth is that zero is one market and any other price is another. In many cases, that's the difference between a great market and none at all.
How true. I can think of plenty of times where I started to sign up for an online service because it seemed free but then I either had to commit a very tiny amount or give my credit card number for charges after the "free" period. I typically abandon the sign-up process at that point, so yes, there's a huge difference between zero and any other price.
I'm curious to see how Anderson's publisher (Hyperion) is going to leverage the obvious angle of "free" for this next book. At the very least I would think they'd take a page out of the Oprah/Orman book and have a limited time free e-book promotion.