Scarcity and making money in the economy of FREE

Supply and demand...remember that?

High demand with low supply = high prices.

But what about when the supply is infinite?

In the FREE economy, infinite will be free. Things that are scarce will have a fee.

If you charge for something that's infinite you'll have a difficult time competing against your competition who's offering it for free.

An MP3 of a song is infinite...so it will be free.
Attending a concert to see a live performance is scarce...so it has a fee.

Sometimes you get to decide how scarce something is. By creating scarcity you can increase the value.

Showing up somewhere in the google search results is infinite, so it's free.
Showing up as one of three sponsored spots in google search results for a popular search term is very scarce (and in high demand), so it's very expensive.

Those who master scarce and infinite will be the winners in the economy of FREE.

Matt points us to this post by Mike Masnick from 2007 with a much more in depth discussion of these ideas.

Comments

[jordan shoes]

Consult with an attorney about how much time may remain.

[Joseph Sherman]

This places the focus on the experience. Why will people pay $5 or $500 to attend a concert when the MP3 of the same music is free? People are willing to pay extraordinary amounts of money and incur the elements because they are creating an experience with the tribe.

[Matt Malenczak]

Jon,

Ben Casnocha blogged about this today as well - but he actually cited the source (Mike Masnick):

http://www.techdirt.com/articles/20070503/012939.shtml

There's quite a bit more info in the real article than your paraphrased post, and you shouldn't deny your readers the additional content