OER are not really free
Open Educational resources are free because they are available under free licenses and they allow anyone to use and modify them for free. They can be free in terms of cost for the end user though it doesn’t mean they are always totally gratis. But we have to distinguish costs of investments, production, distribution and costs for end users. For individual users like students and teachers OERs should have no monetary costs (if available online) or as little as just print.
There are no educational resources that cost nothing. There is always the cost or production, distribution or adoption, they need financial or human resources to be created. The difference is in where and how do we distribute OERs more efficiently and lower the costs for each group of users.
Open Educational Resources do that by lowering costs of copyrights (if needed, they are paid only once), cost of updates (they can be made by anyone, anytime and without copyrights barriers), costs of distribution (encouraging online publications and supporting competitive and cheap print and production).
There are also many different models of production of educational resources. For textbooks that should be created and reviewed by professional authors they can by funded in many ways. From national funding (like in Poland Digital School program), private funding (like Saylor.org Foundation) or even commercially funded by selling services around open content (like Boundless.com). Many traditional publishers are shifting from selling content to selling services build upon freely available resources. Of course it is hard to say that OER are free of production costs and that there are already ideal new business models for its sustainability. But it’s part of a much bigger picture of change in whole education and use of educational resources caused by new technologies and internet.
Want to know more:
David Wiley, On the Sustainability of Open Educational Resource Initiatives in Higher Education, OECD,