Paid Is the New Free
"You can make money giving things away," says Chris Anderson, author of the bestseller Free: The Future of a Radical Price (price: $26.99). "There really is a free lunch." But powerful economic trends generate equal forces pushing in the other direction. Google may prosper by giving away services and data. But the technological revolution Anderson celebrates—and the challenging economic environment—are pushing many enterprises to ask customers to shell out for goods and services that used to come gratis. Paid is rapidly becoming the new free.
When he acquired The Wall Street Journal in August 2007, Rupert Murdoch considered liberating the paper's digital journalism, even though 1.06 million people pay to subscribe to WSJ.com. But as the advertising that supports his many media platforms dried up like the Outback in January, the wily media mogul performed a backflip. "We intend to charge for all our news Web sites," he said in August. Customers of airlines—one of the few industries more desperate for revenue than newspapers—have accepted the $15 to $25 surcharges for checking luggage added in the past year with minimal complaints. This summer Ryanair CEO Michael O'Leary floated the idea of charging passengers £1 ($1.50) to use the in-flight loo.
Cultural institutions, hit hard by the recession, have likewise jumped aboard the paid bandwagon. Want to see the lovely wax palm (Ceroxylon quindiuense) in the San Francisco Botanical Garden, or the Whistler prints exhibit at the University of Arizona Museum of Art? Thanks to newly-adopted admission fees, it'll now cost you a few bucks. In July the Fairfax County Parks Authority in Virginia began charging entrance fees to formerly free havens like Lake Accotink.
As the greening of America's auto fleet puts a dent in gasoline purchases—and, hence, gas-tax revenues—authorities are finding other ways to pay for road and bridge construction. Toll roads are under construction in Texas, West Virginia, and North Carolina. More regions are looking into congestion pricing. In August the Rhode Island Turnpike and Bridge Authority doubled the toll on the Claiborne Pell Bridge. And just as drivers will pay more to drive, businesses will pay more to burn fuel. Whether it's through a carbon tax or a cap-and-trade system, economists, politicians, and energy-industry executives agree that Americans will soon pay a price to engage in an activity that has been free since the beginning of time: polluting. This may be the era of the free lunch, as Anderson suggests. But diners may have to pay for the silverware.
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Daniel Gross is one of the most widely read financial and economic writers working today. He is a senior editor at Newsweek, where he writes the "Contrary Indicator" column. He writes the twice-weekly "Moneybox" column for Slate, which also appears on Newsweek.com.
Before joining Newsweek in the spring of 2007, Mr. Gross wrote the "Economic View" column in the New York Times, was a contributing writer to New York, and contributed regularly to magazines such as Fortune and Wired. From 1998-2007, Gross served as the editor of STERNBusiness, a semi-annual academic magazine on economics and management published by the New York University Stern School of Business.
A native of East Lansing, Michigan, Mr. Gross graduated from Cornell University in 1989, with degrees in government and history, and holds an A.M. in American history from Harvard University (1991). He worked as a reporter at The New Republic and Bloomberg News, and has contributed hundreds of features, news articles, book reviews and opinion pieces to over 60 magazines and newspapers. Areas of expertise include: economic and tax policy, the links between business and politics, the rise of the investor class, the culture of Wall Street, and business history.
He is the author of four books: "Forbes Greatest Business Stories of All Time" (Wiley, 1996), which was a New York Times Business bestseller and a finalist for the Financial Times "Lex" award, given to the best business history book of 1996. Translations have been published in Spanish, German, Czech, Polish, Portuguese, Bulgarian, Chinese, Turkish, and Japanese; "Bull Run: Wall Street, the Democrats, and the New Politics of Personal Finance" (PublicAffairs, 2000); "The Generations of Corning: The Life and Times of an American Company," co-authored with Davis Dyer, (Oxford University Press, 20010; and "Pop! Why Bubbles Are Great for the Economy," (HarperCollins, May 2007).
Mr. Gross appears frequently in the media. A regular guest on CNBC, MSNBC, and National Public Radio, he has also appeared on CNN, Fox News Channel, The Newshour with Jim Lehrer, Bloomberg Television, C-SPAN, BBC, and Reuters TV, and on more than 50 radio programs and talk shows.
Mr. Gross lives in Westport, Conn., with his wife and two children.
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