Chris Anderson (WIRED) just wrote an extremely interesting article "Free! Why $0.00 is the Future of Business". It's about the history and future of Free products and services. My favorite example from his article is RyanAir, where tickets are almost free and are paid for with a variety of cross subsidies and sales of supplemental products.
See the paper (or presentation) I co-wrote with Thomas Sauter-Servaes from the Technical University Berlin's Railway Department for the US Transportation Research Board Annual Meeting (2007) about possibilities for using similar low cost airline strategies in the passenger railway industry. The photo is from France's iDTGV service - they rent videos and game to passengers.
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