Chris Anderson is the editor of WIRED magazine and responsible for the influential book THE LONG TAIL. He has recently published a book called FREE.

In a nutshell this is what Anderson says: in the online and digital world free is like a force of gravity. The costs of production, data storage, processing speed and (most importantly) distribution continue to plummet. Therefore, the pressure increases for products easily distributed on line – games, music, films, newspapers etc – to become free. Piracy helps speed this process up, but isn’t the cause of it. The bytes are busting out and we can’t stop them.

Out of this we see the rise in importance of two other economies: the ‘reputation economy’ and the ‘attention economy’. These are in addition to the already dominant ‘money economy’. In the world of open source software, wikipedia, blogs etc thousands are beavering away in front of their screens. They are apparently working not for money, but to enhance their reputation and/or create something that captures attention.

These other non-monetary economies are a bit like a clumsy take on Bourdieu’s ‘cultural capital’ Can we call it ‘digital capital’? Or how about ‘friend capital’?

Dunno, and either way this is all very well. But what us get rich quick readers want to know how to make some dough out of it all.

Well there is the obvious. We can try using advertising to pay for content. But that only works if enough people are looking at your content. And you need a lot of them.

Or there is the less obvious ‘freemium’ model.

Basically how this works is you make something free and then charge for superior versions of the same thing. These subsidise the free giveaway. And because you are making something free you are potentially reaching a much wider audience.

Seeing as we are about music the example (that everyone uses) is Radiohead. They gave away their album In Rainbows (well you could pay if you wanted) but charged heaps for vinyl, fancy box sets etc. Plus, they made more money from more people coming to their gigs, because more people had heard the free album.

So the theory is that by giving something away free, you enlarge your audience. Hopefully then a small portion of that audience will be prepared to stump up for all the extras.

OK, so we’re all a bit tired of hearing about Radiohead, and we all know they were a massive band to start with. The example illustrates a point but ultimately is redundant. 99.999% of us aren’t Radiohead.

So, the more relevant question to all us small timers is this: what does this all mean for the emerging band or niche artist or small record label? We still have costs and overheads to cover right? How do we actually survive when everything is plummeting toward an inevitable zero? To free or not to free, that’s what we’re all asking?

Well this is the bit where I get a bit stuck.

While I think the book is compelling and useful, sometimes it seems a bit out of touch with the practical realities. It tends to focus on the ease/freeness of distribution, but not the time and money to actually produce something (an album, a film etc). Who pays for that? If I didn’t know Anderson was in the magazine business, and I know they’ve also had a tough time of it, I’d say it was a bit ivory tower. But I guess I can’t say that.

Also, with the ‘freemium’ model, how does a new player get the critical mass of freebies to cash in on the extras?

Still, it has got me thinking, and that’s not a bad thing. He is right about the inevitability of free, but I’m still thinking about the solutions to economic survival.

If anyone wants to offer some free advice on all this - go ahead.