The Economics of Free

Trying out the Zemanta reBlog plug-in to share an interesting conversation happening over at Union Square Ventures about the economics of Free:

Free is not a pricing strategy, a marketing strategy, or the inevitable consequence of a market with low variable costs. It’s a symptom of a much more fundamental economic shift. Until we agree on what resources are scarce and have a framework for how they will be allocated in the future we are not just talking past each other, we are talking about the wrong things

Services are not offered for free at all. There is an exchange of value between users, the creators of the raw material - data, content, and meta-data, and the network where that data is converted into insight. This exchange is still governed by the basic laws of economics but the currency is not dollars, it’s attention. avc.com, A VC, Aug 2009
For me, time and attention is the by far the biggest scarcity. I constantly give up sleep to consume more, which means I'm paying a price in health and also making choices on how to pay out the scarcest resource. But how is our time and attention to be converted into value for the content producer? Something I'm thinking a lot about because I'm someone who's constantly looking for "free" alternatives, and working in a business (advertising) that is increasingly underwriting content production.