Thursday, December 29, 2005

Self-Determined Pricing

I've been meaning to speak about patronage, the arts, living-wages, support and the almighty dollar for quite a while now on this blog - I just haven't had the time to sit down and really work the mess out. And then Jane Siberry comes along with the notion of self-determined pricing, the statistices of which are very surprising.

A month after launching the idea:

20% of customers had downloaded music as "a gift from Jane"
45% Paid by determining price
35% will pay later

of the 45% who set their own price:

9% paid less than the suggested price
81% paid the suggested price
9% paid more than the suggested price

And the average price per track was $1.27 - that's 27 cents more than the iTunes music store cost per track.

Jane explains the idea here:

"You decide what feels right to your gut. If you download for free, perhaps you'll buy an extra CD at an indie band's concert. Or if you don't go with your gut feeling, you might sleep poorly, wake up grumpy, put your shoes on backwards and fall over. Whatever. You'll know what to do...

FOUR choices on pop-down 'buy' button
  1. free (gift from Jane)
  2. self-determined (pay now)
  3. self-determined (pay later so you are truly educated in your decision)
  4. standard (today's going rate is about .99)
STATISTICS BAR: You can see what the paying trends are.
GIFTS: You can still send mp3 gifts to friends with any payment choice.

EDUCATED DECISIONS
1/ COST OF DOWNLOADING:
online credit card authorization (about .45/order (not per song); credit card merchants (visa, amex, mc) cost from 1-3% per order; balance goes to artist
  • if your order costs $0 (free) these costs are bypassed.
2/ COST of CDs:
  • about $2.50 to manufacture. This doesn't include training as a musician (ok, so my parents didn't charge me rent for lying on my bed playing guitar), studio time, etc."

What a bold move. There's something right and true and good and exciting going on here.

Thanks to Beyond Magazine's Blog for the story.

More links about Siberry's move.

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