Street Performer Explains His Experience Connecting With Fans, Giving Them A Reason To Buy

from the experiments-in-progress dept

Onyx Ashanti, a street musician ("busker") who has apparently been reading Techdirt for some time, has been trying to put some of what we discuss here into practice, looking for better ways to connect with fans, while also providing them something worthwhile to buy (noting that "tips" aren't a very good business). He recently alerted us to a blog post he wrote detailing the results of some of the experiments, which appear to be ongoing. He's tried a few different things, even trying to set up a WiFi connection where he's performing to let people download music (didn't work, as it was too confusing) or giving them flyers with a code to download (again, not very effective). He did realize that performing directly on the street enabled him to connect and build up a mailing list, but what could he give as the "reason to buy." He settled on a CD, but with cool (homemade) origami packaging. But he still wasn't sure on the pricing. He tried $10 -- which was decent. He then dropped the price to $5, which actually caused him to sell fewer CDs. But then he tried the model Dave Allen has suggested for merch: pay what you want, and found it worked wonders. He ended up making a lot more more money, though it helped that he explained the whole thing clearly on a sign. Allen, too, has mentioned that it all depends in how you explain the offering.

I've said before that I'm not necessarily a fan of "pay what you want" pricing schemes, but I'm beginning to think there may be areas where they do make sense. The success stories of bands using it for merch over and over again are making me wonder what factors make "pay what you want" work. Any thoughts?

Either way, I'll be curious to find out more from Onyx as he continues to experiment.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
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    AJ, Aug 19th, 2009 @ 7:39am

    Yeah But

    This only works for the little guys..... or was that the big guys....damn, what day is it.....

     

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    Anonymous Coward, Aug 19th, 2009 @ 7:45am

    It will only work for street performers, but never for avenue performers!

     

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    The Infamous Joe (profile), Aug 19th, 2009 @ 7:49am

    Masnick's Law, revisted.

    This will only work for people with talent.

     

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  4.  
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    sycarion, Aug 19th, 2009 @ 8:17am

    Pay what you want

    It seems that if the pool of perspective buyers have differs ideas to what a CD is worth, then a pay what you want seems to work best.

    For a street performer, I may think a CD is worth $5 because I saw him perform and want his music. $5 is fair price because there is no middleman. Someone else may think it is worth $10 because that's how much they pay for a good CD. A CD for $5 is interpreted as a poor quality CD (recording or music-wise)

    In other words, because perceived value is variable, price point is variable.

     

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  5.  
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    Eric Samson (profile), Aug 19th, 2009 @ 8:23am

    I think it works out because people WANT to buy, because they want to SUPPORT the artist.

    Psychologically, when you want to help someone out, you balance your cost with the reward to the other person. (This is why you won't jump in a huge waterfall to try and save someone from drowning if you risk killing yourself, but you will jump in a pool if it means you'll perhaps ruin your clothes but saving someone's life.)

    Also, we've been trained to think CDs are a certain price (between $10 and $15, mostly).

    If I really want to help someone, I'll try to gauge what I can afford to give, while keeping in mind what the item is worth. If I can only afford giving $2 but I'm getting a CD in return, I'll probably pass, because I'd feel bad about getting a $2 CD. On the other hand, if I have $20 and I really, really like what the guy is doing, then, sure, because I'm not just paying for the CD, I'm paying to help the guy out and have him make more music.

    He's not just giving RtB, he's also playing the "support the artist" vein, so he's in fact selling merch AND getting a tip. "Name your own price" means "You KNOW how much a CD is worth. You're welcome to give me more, though."

     

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  6.  
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    duane (profile), Aug 19th, 2009 @ 8:30am

    Re:

    I think you are spot on. This isn't just a pure pricing scheme at work, there is an emotional factor working too and that is perfectly OK. It might mean that it won't scale up very well, but at other levels, perhaps other methods & incentives would work.

     

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  7.  
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    Kevin Stapp (profile), Aug 19th, 2009 @ 8:35am

    Re: Masnick's Law, revisted.

    Bingo. If you have talent you will have fans. Cultivate your fans (known everywhere else as customers) and you will get paid.

     

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  8.  
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    Matt S (profile), Aug 19th, 2009 @ 8:36am

    Re: Masnick's Law, revisted.

    Hahaha, exactly!

     

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    dilbert rocks, Aug 19th, 2009 @ 8:40am

    Re:

    DING! We have a winner.

    The real trick of "name your price" is that people will often overpay for a product, for various reasons. One of the best would be they only have a $20 bill, and they are too shy to ask for change and have to announce their actual price. Effectively, people are guilted into paying at least the price of the CD, and many are lured or lulled, depending on how you look at it, into paying way over the value.

    One question I don't have the answer to here: As a busker, is the CD all his own songs, or covers of other artist's material? Is he paying proceeds to those artists? I am curious what the implications would be there for "name your price" if you have a fixed amount you have to pay out on every CD.

     

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  10.  
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    AC, Aug 19th, 2009 @ 8:49am

    Re:

    On scalability, a larger act could say "Pay what you want; x% of proceeds go to charity/organization y." I could totally see that happening.

     

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  11.  
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    Marcus Carab (profile), Aug 19th, 2009 @ 8:55am

    Re:

    Ha, genius! Thumbs up, AC! (not something we get to say very often around the TechDirt comments)

     

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    Anonymous Coward, Aug 19th, 2009 @ 8:56am

    Always wonderful hearing about someone experimenting. I wonder how the haters will attack this.

     

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    difranco, Aug 19th, 2009 @ 9:12am

    pay what you want does work

    Actually, Pay what you want works well not with just artists but laborers as well. In the christian communities of people I interface with, they labor and expect to be paid at the end of the day in cash or check do not negotiate a price up front.

    Rather when the day's work is complete, the laborers simply ask for an offering from the person that requested the work of what they felt the value of the labor was worth.

    These christian laborers say that they actually make more money this way rather than using a contracting method as people will often pay more for their work when they are obligated to set the value themselves.

     

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    Chargone (profile), Aug 19th, 2009 @ 9:20am

    Re: pay what you want does work

    "it'll never work for..."
    hehe. this one works due to lack of corporate overlords, so there actually IS a unit 'it'll never work for'. I'm just not sure what the word for that is.

     

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    CommonSense (profile), Aug 19th, 2009 @ 9:20am

    Re: Masnick's Law, revisted.

    Isn't that exactly what we want????? Only talented musicians earn money, not the no talent hacks with marketability that big name labels force onto us. If this is really what it takes to improve the quality of music, it's a win-win situation....people pay for good music, and you have to be a good musician to get paid.

     

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    diabolic (profile), Aug 19th, 2009 @ 9:40am

    I'm all for this kind of experimenting and its interesting to watch it evolve. But if he sells 5 CDs on tuesday and 11 CDs on wednesday and that is a one time experiement, can you really say that the model 'works'?

     

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  17.  
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    The Infamous Joe (profile), Aug 19th, 2009 @ 9:41am

    Re: Re: Masnick's Law, revisted.

    I tapped the side of my nose and pointed at you.

     

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  18.  
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    Experience, Aug 19th, 2009 @ 9:47am

    Everything old is new again

    This works in the ideal and in practice as long as moral forces are at work. It falls apart when someone gets greedy (good thing that seldom happens).

     

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  19.  
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    Eric Samson (profile), Aug 19th, 2009 @ 9:52am

    Re: Re:

    Bingo.

    The problem with dilbertrocks's idea that this specific model is guilt-driven (therefore that it works well for in-person transactions, but not so much online, where you ALWAYS have change) is debunked by many online experiments (Radiohead being one of them). You don't give $20 because of the guilt-cost of getting change for your $20, becaue online, you can just as easily give $9,42 than $20, and people STILL overpay.

    I put forward the idea that people who WANT to pay, want to do so to SUPPORT the artist, not just to get the plastic thingamajig in return. This is why people WILL pay for intangible goods online, if only to get that warm, fuzzy, helper-of-the-arts feeling.

    Name-your-own-price therefore also puts a "how-much-do-you-love-me" premium on the goods themselves, whether physical or digital. The same thing happens in sports: someone who loves Ferrari will pay indecent amounts of money for a Ferrari polo / baseball hat, because it shows their affection for the brand, and their support for the company (and, presumably, their sporting endeavours). They're basically saying "We know a polo is worth $15, but we're ready to pay ten times that amount because we love you".

    (Has anyone explored the idea of comparing the music-trinkets business with any other derivatives-based market, like sports?)

     

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  20.  
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    Anonymous Coward, Aug 19th, 2009 @ 10:27am

    Re: Re: Re:

    Great comment Eric Samson. I completely concur that it's a love/support thing.

    The opposite feeling is another encourager of piracy. If you feel like you are sticking it to a bunch of corporate suits who are exploiting the end consumer and the artist while they get rich for doing next to nothing, you don't mind pirating.

    Going back to Mike's connection idea, the artist says, here I want you to enjoy the music, even if I don't profit from it. The fan feels that, connects and says, I want you to profit.

    It is about support/love and it is about connecting. Pay what you want might be the quickest way to connect with a fan.

     

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  21.  
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    Fiercedeity (profile), Aug 19th, 2009 @ 10:28am

    Re: Everything old is new again

    Yes. Even though this method is clearly working for this musician, detractors well simply say, "Sure, he's making money, but he should be making more."

     

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  22.  
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    Anonymous Coward, Aug 19th, 2009 @ 11:11am

    Re: Masnick's Law, revisted.

    >>This will only work for people with talent.

    Hence, the recording industry's opposition. The recording industry's methodology is to take a photogenic person with good stage presence and have them play the music their focus groups tell them will make money. Talent is secondary, especially with tools like autotune.

     

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  23.  
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    Different Mike, Aug 19th, 2009 @ 11:39am

    Hmm, no shills today

    Wow, nearly every comment has been well thought out and in support of this idea. There must be a Shill convention today, so they are all to busy to post.

     

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  24.  
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    Does it matter?, Aug 19th, 2009 @ 12:01pm

    Re: Hmm, no shills today

    Actually no, I think it is because this is one of the rare stories where Mike didn't overblow it and attempt to (in vague words) make it sound like a replacement for any part of the music business.

    The story is lacking in detail (like how long he tried each idea out, did he try different ideas on the same day each week, etc). It does lend some interesting insight into people's mentalities. It also suggests that some people are still willing to pay for music (and that the "give a performance, sell the CD" traditional model for music is still very much in vogue).

     

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  25.  
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    Lang, Aug 19th, 2009 @ 12:51pm

    Re: Re: Re:

    So it all comes back to value, which makes complete sense economically. The value of something isn't just monetary (i.e. how much a person is willing to pay for it) but also emotional (i.e. how much that person cares about the product, the maker of the product, the memories attached to the product, etc).

    Another point I'd like to bring up is that by telling someone that they can pay what they want for a product, instead of feeling forced to pay (which, from my own personal experience, can make a person very leery about whether the value of that product is worth its price), that person probably feels that any kind of payment will be welcome, which helps in making them feel more generous with their "donation."

     

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  26.  
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    Anonymous Coward, Aug 19th, 2009 @ 12:52pm

    Isn't this why you pay accountants?

    I've said before that I'm not necessarily a fan of "pay what you want" pricing schemes
    I'm a techie and not working in Sales nor do I know anything about it, but if I'm not mistaking isn't this why cooperations have accountants? To calculate this stuff? If we ask x we sell y and make profit z
    but if we ask x+1 we sell y-1 but profit z+1, etc, etc
    However the price is already set by the general public* as we can see here.

    So instead of singing up with the big four, who pay a lot of money (from the performer's pockets) to accountants, just use the "Pay what you want" + RTB!

    *General public doesn't mean '1 price fits all', everybody has a different price point.

     

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  27.  
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    Anonymous Coward, Aug 19th, 2009 @ 1:19pm

    I think the difference here is what the audience focuses on as the point to the performance.

    A set price makes the whole performance seem like a marketing ploy (which it technically is, but we're talking about customer mentality). It makes the musician appear like "I'm just doing this so you buy my CDs".

    Meanwhile, a pay-what-you-want price seems much more offhanded, like an afterthought. The focus is on the performance rather than the product, and in turn the audience gives money because they feel it's that much more voluntary.

    It comes down to understanding your audience. People are much more willing to do something if they feel less forced.

     

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  28.  
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    Onyx Ashanti, Aug 19th, 2009 @ 1:50pm

    Re: Re:

    the CD is all improvisations from various performances over the last 2 years. i record each performance and salvage the best bits. cover music is a different game all together. to me, it is more about creating music that resonates now, rather than "re-resonating" music from the past.

    there is a very tangible impulse buy/emotional aspect to the concept in that i find that the more that i resonate with my audience, the more said audience is willing to pay for my discs, on average. so it behoves me to play my muysic to the best of my ability.

    (thanks mike for printing my story)

    onyx

     

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  29.  
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    Derek Kerton (profile), Aug 19th, 2009 @ 2:50pm

    Capturing the Consumer Surplus

    Pay What You Want (PWYW) can often work as a model, and sometimes might even be the best model. Although, I agree with Mike that it comes with its own risks when costs lurk.

    WHY IT WORKS
    The best argument for PWYW is that the busker employs three similar strategies that are good to a business' top line:

    - yield management
    - capture consumer surplus
    - price discrimination.

    Each of these three are good econ and biz buzzwords for much the same idea: getting each customer to pay as much as he is willing to pay (WTP).

    If you set the price at $20/CD, few would pay it so revenues would be low. If you set it at $1, many would pay it, but you may even lose money if your costs are >1. If you set it at $5, you may get many customers, but not get the margins of the $20 price. If you set PWYW, you might get paid $20 from the customers WTP $20, $5 from those willing to pay $5, and hopefully you won't find too many people who think your CD is only worth $1.

    See this chart showing consumer surplus in red:
    http://en.wikipedia.org/wiki/Economic_surplus

    As a busker, you are face to face with your customers, so humans are much less likely to bilk you than some faceless corporation, or some distant internaut. Most people will actually pay you. That's good. Better still, they will pay a price between what they think is fair (at least cost), and biased by the amount THEY think the CD is worth. The fact that their price estimates are anchored* by both the retail price of a CD and their WTP amount works in favor of the busker.

    If you are selling something that is largely an infinitely reproducible good, you're in great shape. It's not like you're going to run out, and if you make money on every unit, volume is your next goal.

    *See here for "anchor point" info:
    http://www.psy.gu.se/download/gpr977.pdf
    http://www.directionservice.org/cadre/spoelstra.cfm

    WHY THERE CAN BE RISKS
    The risk is when a PWYW model is applied to a product with significant costs of production, such as a major concert. There is a possibility that fans will pay nothing. That leaves the artist in the red for all the costs of the event. This may be rare, but it IS a risk.

    Consider the case of a PWYW concert, where the donations were requested upon exit. What if the lead singer has a cold and a lousy voice, the amps blow a fuse, and the power goes out in the first set. This kind of thing can happen. What would people pay?

    Remember Dave Chappelle's free gig in Portland? He kept his costs low and price free, but what *would* people have paid on exit for a show like that. My point is, a terrible show can happen sometimes, and the artist could end up losing money.

    If a busker has a PWYW CD pricing scheme, and the CDs cost $3 each to make (including time, disk, origami, all costs), then there is a risk that the PWYW customers will pay below $3. This situation is particularly bad for the artist, because if there is a high volume of sales, the artist loses MORE!

    Costs (variable costs in particular) are the nemesis of PWYW ideas. If the costs are negligible, then PWYW can't hurt as an experiment.

     

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  30.  
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    Anonymous Coward, Aug 19th, 2009 @ 3:16pm

    Re: Re: Hmm, no shills today

    it came down to a lot of thideas i have been reading here over the last year or so, mixed with examining my own buying habits/patterns. I simply asked myself, "what would i buy, why and for how much?"

    the main strategic thing about the disc is that it is a "key" more so than a product. i created an interactive section on the disc so that when used with a cd-rom drive, there is an html section with liner notes, a bit of editorial, and, most importantly, links to all of my online personnae, including my online discography, which is also freely downloable ( www.onyxashanti.bandcamp.com ) i decided to use this online repository as an RTB and it works. even though, someone can simply download the music online without buying the disc, i have found that people want both.

    as far as costs, my primarly costs are my time investment in disc creation. i wanted something that was visceral and tangible which is why i chose to cut the paper by hand rather than use precut pages ( i also iron each sheet so that i goes thru the printer). i wanted to ceate something that made people ant to listen to it and sit down and enjoy the music, the writing in the sleeve, down to the feel of the paper itself. these things arent expensive in material costs, but they do take time to create.

    i plan to expand on this concept of selling a "key" to my artistic repository, rather than trying to create singular "products" as i am finding that it builds a sense of artistic trust with people that are into what i do. I plan to try this concept with my concert shows soon and see how well it works there too...i will post the results.

     

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  31.  
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    Suzanne Lainson (profile), Aug 20th, 2009 @ 12:26am

    Worked wonders?

    I think it is great that Onyx is sharing his experiences. It's very helpful.

    I read his blog post, read Mike's comments, and read the comments. Did I miss something? I'm having trouble finding an indication of this?

    Quoting Mike:
    "But then he tried the model Dave Allen has suggested for merch: pay what you want, and found it worked wonders. He ended up making a lot more more money, though it helped that he explained the whole thing clearly on a sign."

    Quoting Onyx's blog:

    "the results of the first test; there was less profit per disc. that was to be expected. the session it self was more profitable. the busking session itself was approximately 120% more profitable than average."

    So has only one day been reported upon? And where did the 120% increase come from? More CD sales? More tips?

     

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    mobiGeek (profile), Aug 20th, 2009 @ 8:31am

    Free

    making me wonder what factors make "pay what you want" work. Any thoughts?

    Because everyone wants everything for free?

     

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  33.  
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    bobwyzguy (profile), Aug 20th, 2009 @ 3:02pm

    Perceived value

    In a fixed price model what you have is a certain number of people who thing they bought "a bargain", a certain number who that the proce was "ok" and another group who feel "ripped off" and a fourht group who just walked away without buying anything. The pay what you want fits model perfectly with everyone's perceived value of the product. Basically - everybody gets a deal and gets to feel good about it, even the sociopath who thought free was a fair deal. So there you are -

     

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  34.  
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    bobwyzguy (profile), Aug 20th, 2009 @ 3:03pm

    Re: Perceived value

    Sorry - so excited I forgot to spell check - or even read it first!!

     

    reply to this | link to this | view in thread ]


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