Charge a “rental” fee for shelf space. Due to the store‘s popularity, companies give SampleLab products for free and even pay $2,000 to stock one item for two weeks. SampleLab can carry 90 products at once. Charge for feedback. By offering extra free goods, SampleLab turns most of its members into a focus group. Teens fill out product-specific surveys online, on paper, or via keitai (cell phone). Companies pay $4,000 for the data. If 20 percent of its clients pay for the feedback, SampleLab earns a little less than half the monthly revenue it does renting shelf space.
So charging a price, any price, creates a mental barrier that most people won‘t bother crossing. free, in contrast, speeds right past that decision, increasing the number of people who will try something. What free grants, in exchange for forsaking direct revenues, is the potential of mass sampling. After examining mental transaction costs, Clay Shirky, a writer and NYU lecturer, concluded that content creators would be wise to give up on dreams of charging for their offerings: For a creator more interested in attention than income, free makes sense. In a regime where most of the participants are charging, freeing your content gives you a competitive advantage. And, as the drunks say, you can‘t fall off the floor. Anyone offering content free gains an advantage that can‘t be beaten, only matched, because the competitive answer to free—―I‘ll pay you to read my weblog!‖—is unsupportable over the long haul. free content is thus what biologists call an evolutionarily stable strategy. It is a strategy that works well when no one else is using it—it‘s good to be the only person offering free content. It‘s also a strategy that continues to work if everyone is using it, because in such an environment, anyone who begins charging for their work will be at a disadvantage. In a world of free content, even the moderate hassle of micropayments greatly damages user preference, and increases their willingness to accept free material as a substitute. So on a psychological basis (and all economics is rooted in psychology)eve•€ial, if there‘s a way to take the whole ―is it worth it?‖ question off the table, it pays to do so. Note that there are other mental transaction costs to free—from worrying if it‘s really free to weighing nonmonetary costs such as considering the environmental impact of a free newspaper or just fearing that you‘ll look like a cheapskate. (One friend tells me the giveaway furniture he puts outside his house is only taken at night.) But those costs aside, taking money out of the equation can greatly increase participation.