for the niche as for the mass." The result, he says, has been the "birth of a wildly diverse new culture and a threat to the institutions of the existing one…." There's only one way you can have unlimited shelf space: if that shelf space costs nothing. And that near-zero or zero cost of digital infrastructure allows us to be indiscriminate in what we use digital distribution for, which has resulted in not only an explosion of variety online, but also new pricing models. No longer is free a marketing gimmick; it has no strings attached. In other words, there really is a free lunch. Let me summarize so far. What Anderson is saying is that:

You can make money giving stuff away. This Free is different from yesterday's free. Free is made possible by the ever dropping price of digital infrastructure. This trend is disruptive, but it's so enabling for creators and consumers that the pain is worth it.
Let's look first at the idea that people are making lots of money charging nothing. That isn't as weird as it sounds, Anderson says. Sure, you give some things away, but at the same time, you sell other stuff. He cites examples like Google, which gives away all sorts of services like Google Docs and Gmail but charges for advertising; the Linux ecosystem, supported by volunteers, which he says is a $30 billion industry; and the coffee shop that sells $3 lattes while giving away wi-fi. Not everything is being given away for nothing, of course, but enough goods and services are now free that we have essentially created an economy as big as a good-sized country around the price of zero. This phenomenon is a new permanent business model based on expending resources on products and services without expectation or receipt of a monetary return. Let me stop here for a moment. None of this stuff comes at no cost, as Anderson implies. Someone somewhere is paying for it. In the case of Google, the advertisers who buy slots next to search engine results or on Web sites are subsidizing the development and maintenance of Google Docs. When you use one of Google's applications, such as Docs, Gmail, or Analytics, you're benefiting from the profit Google makes from selling those ads. As far as Linux is concerned, the people who develop and maintain it are contributing their time-which could be spent actually earning money--to provide something to people who get it free. If you download, install, and use Linux on your computer, you're benefiting from the donation of many people's time. So Linux is paid for by developer time and potentially, their reduced earnings.

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