To put it another way, is it really so rare for a product to be freely distributed or even free of charge? If we look closely, we can identify certain business models that are based on offering a product free of charge to customers.
Free products
In Spain, we have television channels such as Antena 3, Cuatro, Telecinco and La Sexta that offer free television to viewers. Of course, the business of these stations is to sell advertising, that is, to act as intermediaries between companies that want to publicise their product and their potential customers (for example, viewers will see advertising placed before, during and after the broadcasting of a football match).
In general, any company whose business is to act as an intermediary between other companies and their customers must decide what pricing policy to adopt, and perhaps the best option is to dismiss the possibility of making money with some of these customers.
If a television wants to earn revenue from advertising, it needs to guarantee its paying customers (the companies that place advertisements during broadcasts) the largest possible number of viewers, and the best way to do this is to allow the latter to receive the television signal for free.
Similarly, if Adobe wants to attract customers for its PDF file creation product, Adobe Acrobat Professional, it makes sense to offer the simplified version of this software, Adobe Acrobat Reader, for free. This way, Adobe can guarantee its paying customers that other users can actually read the documents that they create.
Likewise, Amazon, besides being a book shop that sells on-line, has transformed its website into a platform that connects its customers with second-hand book shops offering used books at a discount. When we check the availability of a title, we see Amazon's offer together with that of the other bookshops. In this case, Amazon offers its customers the possibility of viewing the series of available books for free and instead charges the bookshops for its intermediation service. Given the reasons for adopting this pricing policy discussed earlier, it is convenient that Amazon earns money from the sales of the other book shops because it might otherwise be tempted to offer a biased service (ensuring the sale of its own books over those of its rivals listed on the website).
Alternatively, a company can offer customers a product for free, but link it to another product, which is the one it wants to sell. An example of this follows:
Recommended reading
You can read the full article published in El País, 15 July 2007 "Prince vuelve a enfurecer a la industria musical".
"Anyone who has purchased the British weekly Mail on Sunday this morning has taken home a free copy of Prince's new work, Planet Earth. In all, 2.9 million copies have been sold."
[...]
Planet Earth will also be distributed free of charge to those attending any of the 21 concerts that the Minneapolis musician is putting on at London's O2 Arena from 1 August to 21 September."
El País, 15 July 2007.
As we can see, in the first case, it is quite possibly the newspaper that has bought the right to give away copies with its publication (a way to promote the newspaper), while in the second case, the artist foregoes the possibility of making money with the distribution of copies of the CD (contrary to the efforts of music labels and record shops who want to hold on to their business model at all costs) to focus on making money from his concerts. (Another story, this time in the New York Times, says that the musician is putting on exclusive concerts at small venues for which tickets, with meal included, are being sold for $3,000 (12 July 2007, "Star Turns, Close Enough to Touch").
Recommended reading
You can read the full article published in El País on 12 July 2007 "Star Turns, Close Enough to Touch".