How giving your stuff away for free can make you money

jazz by jenny downing
One Working Musician Explains How Pay What You Want Works For Him
[Via Techdirt]

We’re going to try something a bit new here at Techdirt. Usually, we post stories based on some news event or stories elsewhere, but since we talk so often about various business models, and often try to highlight business model experiments that work, I wanted to start a regular series of “case studies,” on content creators doing interesting things. Sometimes it will include success stories. Sometimes, perhaps, failure stories. Sometimes we won’t even know yet. But the goal is to call out examples of the interesting things that have been done, and to dig into them a bit, and hope that we can all learn from them and maybe see if others are inspired by them. We’re looking for content creators (not just musicians, by the way) who might be interested in sharing info with us as a part of this series, so if you are doing something interesting, or know of someone else who is, hit us up at the feedback link above.

The first one in this series of posts is about jazz musician Jason Parker, who also blogs at the site OneWorkingMusician.com, where he details his various experiments with making a living as, yes, a working musician.

Back when Radiohead did their pay what you want offering a few years ago, one of the widespread critiques of the idea was that it would only work if you already had a huge following. We’ve seen, of course, that isn’t true. Last year, we wrote about a few experiments with bands trying pay what you want CDs at shows and having some success with it. This doesn’t mean, of course, that if you just toss up some music and say “pay what you want,” it will work. But if you really do cultivate a fanbase, and offer them a way to support you, it’s often quite amazing what they will do… and that’s exactly what Jason discovered.

It started with a “weekend experiment,” late last year, where Parker reduced the required price of the download of his albums, to $0 from $5, and tweeted to his followers that they could pay whatever they wanted for it. He had considered setting a minimum of $1, but decided to see what happened if he went totally free. And the results were quite impressive:

Sunday night at midnight I checked my Bandcamp.com stats and was amazed. The three Jason Parker Quartet CD’s, “No More, No Less”, “Live @ JazzTV”, and “The Jason Parker Quartet” had been downloaded 128 times! That’s more downloads than I’ve received in the last few months combined. Most days I was lucky if a track or two were downloaded, let alone full albums.

And what’s even more impressive to me is that many of the people who downloaded the CD’s actually paid for them, even though they didn’t have to! In fact, I made more money from sales this weekend than in any other three-day period since the days right after the release of our latest CD, “No More, No Less”. All while giving them away for free!

After the weekend, he raised the prices back up to $5… but after thinking through it some more, and seeing these and other results, he’s now permanently set the price at “pay what you want,” with $0 being a perfectly acceptable price. I asked Jason how it’s going, and he says that before, when he had the price at $5, he would sell maybe 3 per month. However, these days, with the price set at $0, he’s averaging 8 sales per week with an average price of $8.50. Yes, his sales have increased from one every ten days or so, to more than one per day, and the amount people pay has gone up. The CDs, by themselves, are obviously not a huge moneymaker, but still, the revenue has gone from about $15/month to around $300/month. By giving it away for free and letting people pay what they want. Not bad.

[More]

He did a couple of other experiments with pay what you want. at concerts he was selling more CDs for more money than when he priced them himself. A very novel but successful model.

People will support others in the community when given the opportunity, particularly if they feel you are providing something of value. In this case, by letting people decide for themselves how much his music is worth, he is making more sales at a higher average price than what he had previously been asking for. It is a digital ‘pass the hat’ exercise that can be highly leveraged because of the size of the Web. You may only be able to reach a handful in person but can reach hundreds online.

So, life may not be fair but sometimes it is just.



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One thought on “How giving your stuff away for free can make you money

  1. It seems to me that this was the way that Harvard Business School originally started their case history studies. By using models of businesses that succeeded and having their students study them, they taught what worked and what didn’t. Nowadays, of course, it is all taught about theoretical businesses and only on paper does it succeed or not. That explains a lot, doesn’t it?

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