Flipping abundance and scarcity
I think it's dangerous and often fatal to put free on top of an existing business model. Things fall apart.
People look at the free revolution and say, "oh, that could never work. If I gave x, y or z away for free, I'd fail." They're right. They will fail… If they keep the model the same and just give away stuff for free.
The way you win is by reinventing the model itself. So, for example, lululemon doing giant free yoga classes in New York. The more people come, the more clothes they'll sell… it'll become a movement. Or Crossfit, publishing their insane work outs online. The more people do them, the better the scarce part (private coaching, etc.) does.
We spent a generation believing certain parts of our business needed to be scarce and that advertising and other interruption should be abundant. Part of the pitch of free is that when advertising goes away, you need to make something else abundant in order to gain attention. Then, and only then, will you be able to sell something that's naturally scarce.
This is an uncomfortable flip to make, because the stuff you've been charging for feels like it should be charged for, and the new scarcity is often difficult to find. But, especially in the digital world, this is happening, and faster than ever.