Pay What You Think It’s Worth (or Free Market Economics).

Over on my Other Blog I’m and musician so, since I’ve been harping on for a while about alternative business models for musicians and how the biggest challenge for an amateur musician is not piracy but publicity, I’ve now decided to put my money where my mouth is and try one of these alternative models for myself.

For a long time the gatekeepers of content have tried to force the prices of digital content to match that of physical copies but it just doesn’t make sense. So what is the correct price for a download? Well, I guess it’s what the market decides is the right price. You’re the market, this is a chance to help decide.

So as of today all our music downloads are available on a Pay What You Think It’s Worth* basis (including “Free”) from our Bandcamp site**.

Personally I’d rather that more people heard and enjoyed our music than that we extract every penny from anyone who might like it. So please feel free to pass this on to anyone who you think might enjoy it (in fact, please please do that!) or anyone who writes / talks about music and the music business and might be interested in the experiment.

I put “Free” in inverted commas because if you go for Free then I’m going to ask you for an e-mail address and add you to my distribution list. You can opt out at any time and I don’t e-mail much stuff out anyway, I reckon that’s a fair trade.

N.B. the physical cds remain at fixed prices I’m afraid, because they cost a fixed amount to produce and I have costs to recover. If you download the stuff and then decide that you’d like one of the CDs (plenty of EPs left, a couple of handfuls of the Album) then I will happily knock off anything you decided to pay for the download.

Similarly if you’ve previously paid the full rate for the download and are now feeling ripped off (I really, really hope there aren’t many people in this category!) then drop me a line and we’ll see what we can sort out. I mean this, I’d hate for someone to be sitting there thinking that I’ve pulled a fast one on them.

* there is no good acronym for this.

** I’m working on setting up the same mechanism on other platforms.

 

A manifesto for the content industry 4 – You can compete with Free

You can compete with free. Seriously, there are plenty of working business models out there, study them. You are better placed than anyone to make this work, failure to do so is not about not being able to compete with free, it’s a failure of your business acumen.

“You can’t compete with Free” is one of the most frequently quoted arguments that you’ll find on blog comments and discussion boards when discussing how to make money in an environment where digital copies are abundant and easily available for those who are willing to do a quick bit of looking.

It also frequently occurs in conjunction with someone complaining that they tried making their content available for free and didn’t make any money / didn’t see any increased traffic / didn’t immediately become rich and famous.

So let’s make one thing completely clear: ‘Give it away and hope’ is not a business model.

We’re going to come to adding value in section 5 and that will, hopefully, begin to set out how you might devise a working business model. This section links very closely to that and is about working out how you identify potential opportunities to compete.

Content basically comes in two flavours: legal and illegal. Essentially there is stuff that the owner of the material has put out into the world to be shared and that which has been shared without the permission or the rights holder. This then, is your first mechanism for competition. There are a lot of people who don’t like feeling like they’re breaking the law, even when they’re doing as eminently reasonable as copying the contents of a cd to an MP3 player. Give people a legal option, some folks will happily pay a fee to know that they are doing “the right thing”.

Content could be described in two other flavours: permanent and temporary. There’s the temporary stuff that sits on youtube / spotify etc that you can only access when you’re connected to the web, and there’s the permanent stuff that you download to your repository of choice (hard-drive, phone, MP3 player, kindle). Again, some people will happily pay a fee to own* a copy that they can play at any time or in any location.

Or you could split content into two camps another way: easy to access and difficult to access. For quite a while this has been the bane of the legacy industry’s life. Getting access to legal content was a complete pain whereas illegal content could be obtained with a search and a click of the download button. Then came I-tunes, suddenly here was a lot of content, easily available, reasonably(ish) priced and not bundled into unappealing packages. Unsurprisingly i-tunes has sold quite a bit of content. Amazon now offer a one-click alternative (assuming you’re signed in) that is as easy to use (if not easier) than the illegal alternatives, this also is doing quite nicely.

Funnily enough there are lots of other ways you can split the content on the web; trusted and risky is another way. If I buy something from Amazon, I-tunes or direct from an artist’s website there’s very little chance that I’m being sold malware or a virus masquerading as content. If I torrent something illegally I have no such feeling of comfort.

Here’s another way you can split it: that which rewards the creator and that which doesn’t. A lot of people will happily pay to support an artist they like, many will seek out the best way to support those artists from the available mechanisms. This might mean buying a CD at a live show rather than via a retailer, or just going to the show instead of buying the CD. One group have even discovered that since publishing a breakdown of how much they earn via different means they have not only increased their entire take but the sales have shifted to the items that they make the most return on. The swing side of this is that you are a rights holder who doesn’t pass on much money to the content creator you might find that this actively works against you.

Restricted and Un-restricted might be another way of looking at it. Once I’ve bought some content I want to be able to do what I choose with it, when I like and on the device that I prefer. Putting DRM on something is a sure-fire way to make your product less attractive than an illegal alternative. Perversely there are those in the industry who still view this as a “feature”.

There are almost certainly other ways you can cut it and other incentives that can be provided to persuade people to consider paying for content that is also available for free. I’m not for a minute suggesting that all of these will work for everyone or even that any of these will work for most people, but one thing I can guarantee is that you if you’re not making your paid-for content as easy to get hold of as free content then you will be losing sales.

* This becomes very important later on (see section 12 when it comes), have a look at the increasing number of cases of artists suing their labels over I-tunes royalties in the meantime.