Pay-per-Use

An addendum to the last post. Suppose you actually offer a product or a service...downloadable images, songs, videos, etc. You can ask your audience to pay what they believe to be a fair price for your goods and services. The band Radiohead pioneered this a few years ago by offering their entire album online in exchange for donations to be determined by the downloaders.

This technique evolved in response to the advent of free file sharing and “digital piracy” by services like Napster, Gnutella and Limewire. This is a way to avoid paying huge sums to the middleman (record company and film production company) and instead send your money directly to the artist. While sites like ITunes allow you to download content at a price that fits its relative market value (new as of February ’09), the “pay-per-use” technique allows the audience itself to determine market value. Sure, you’re not Radiohead, but if you have goods and services to offer with a low overhead, this may be a way to avoid giving it away for free.