Chris Anderson has been in town this week to promote his new book Free: The Future of a Radical Price. I was in the audience at the ICA this lunchtime with my old pal Ged Carroll (@r_c) to hear him speak.

Anderson denied that his spat with Malcolm Gladwell in response to a dodgy review in The New Yorker on Monday and conducted via the blogosphere was a PR exercise, (both work for Conde Nast) but there’s no doubt that the attention will help drive book sales.

Anderson was keen to get one thing straight from the outset: free isn’t an economic model without money. Instead it describes a transactional relationship where some element is free.

Anderson said that the internet has driven distribution costs down and continues to do so as the cost of storage, processing power and bandwidth halves every 12 months or so. He said that this had led to the freemium model whereby content producers or product developers give away an element of their product for free and charge for a premium version.

He contrasted this with the pre-internet version of free where products are packaged as part of a marketing offer such as buy one get one free (BOGOF), or given away as free gifts.

That there are two distinct models for free and that the internet is a driver for the freemium business model there can be no doubt, but I don’t believe that freemium is as original as Anderson claims.

It’s a technique favoured by drug dealers who hook in victims with cheap deals, the airline industry which discounts flights and then charges premium prices for additional services and retailers who give away samples.

Freemium is a means of promotional marketing designed to stimulate a customer to take action towards a buying decision dressed up as a new economic model. Anderson’s namesake Hans Christian Anderson would call it the Emperor’s new clothes.