World Of Goo Tries A Donation Model, Publishes Results

from the people-don't-pay-based-on-value dept

We've mentioned the video game World of Goo a couple times in the past. First, when its creators got upset about silly regional restrictions that were put on the sale of the game, and later when they noted that releasing a game without DRM showed no change in the piracy rate. Yes, the game was widely shared, but at no different a rate than when they'd offered games with DRM. Recently, they decided to try a name your own price experiment to see what would happen. While I'm still not enamored by such pure "give it away and pray" type models, we do keep hearing success stories of people who have used them, combined with a strong and loyal fanbase.

Now they've released some preliminary data, showing that they got about 57,000 new sales, with an average price of about $2 (so, over $100,000 sales in a week -- though, that's the gross number, the net is less, due to Paypal transaction fees). They also added a survey, and found a key point:

Few people chose their price based on the perceived value of the game. How much the person feels they can afford seems to play a much larger role in the decision than how much the game is worth.

This is another good point that highlights the separation between price and value -- which too many falsely assume are the same thing. There were also a significant number of people who said they paid because they liked the "pay what you want model, and wanted to support it." So they were paying to support the model, rather than the game itself, which is interesting. I wonder if that component would fade over time as these sorts of models become more popular.

Either way, another case study in business model experimentation.

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Taxi Owner Copies Innovative Business Model Of Free Shuttles He Just Forced To Shut Down

from the regulatory-capture dept

Earlier this year, we wrote about how some of the taxi companies in Tampa, Florida were upset about free competition. Some smart business folks had setup local transportation options, that subsisted on advertising and tips, rather than fares, and thus were able to avoid having to buy a (sold out) taxi cab license. But, of course, the existing cabbies freaked out and complained, and convinced the city council to declare that the free cabs had to buy licenses as well... while conveniently noting that none are available. Basically, the cab drivers got the city council to drive this competition out of town.

But, now there's a bit of a twist. A bunch of folks have sent in the news that one of the guys who pushed the city council the hardest has now suddenly set up his own free shuttle offering in place of the competition that was run out of town. He makes no qualms about the fact that he's copying the idea of the shuttles he just knocked out of business, saying they had a good idea -- he just didn't like the fact that they didn't have to buy a taxi license. Neat trick, huh? Get the government to drive your competitors out of town, and then copy their best ideas.

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Another Band Tries Pay What You Want Concerts

from the with-incentives dept

Pete alerts us to the news that the band Lotus is trying out a pay what you want tour. They apparently worked out a deal with Ticketweb to basically let people pick prices anywhere from $1 to $20 (no $0 option). They've also tried to put an incentive in place to pay more: if you spend more than $15, you get free downloads from the band. It's another interesting model, though I'm not sure it makes as much sense as some other models. Again, concert tickets are a scarce good, and doing pay what you want on a scarce good is a lot riskier. Still, it's yet another experiment that'll be interesting to follow. I think I like K-OS's experiment with letting people pay what they want on the way out of a concert better. Still, experiments are good, so it's nice to see another one.

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Popular Video Game Series Tries Pay What You Want

from the experiment-away dept

If you follow the market for management "sim" sports games -- which are more about managing a sports team than about the action of playing -- Championship Manager is a name you'll likely recognize. It's a well-known football (soccer) sim, that is currently owned by Eidos (it's moved around a bit). So it's a bit surprising (but fascinating) to learn (via reader mikez) that the folks behind it are running a "pay what you want" experiment with the game. You can't get it totally for free. There's a £2.50 transaction fee, no matter what price, but from there you can pay anything from £0.01 and up. They're only running it for a limited time (until September 10th -- the day before the game is actually released). While I'm not always a huge fan of the "name your own price" deals, it's still fascinating to see a big video game company try it out.

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Taxi Driver Does Pay What You Want... And It Works

from the funny-that... dept

We recently wrote about successful taxi cab operators offering free service in Tampa, Florida (pissing off existing cab companies), and it appears that the idea is spreading somewhat. Matt Cruse alerts us to a story in Essex, Vermont, involving a guy offering "pay what you want" taxi rides, and finding that people are always willing to pay a reasonable rate. Now, I'll admit that I'm not a huge fan of "pay what you want" models, which seem more like give it away and pray, rather than having a real business model worked out (which makes me wonder if it's sustainable long term). But, in the meantime, it's certainly yet another example that "free," can be a useful tool as a part of a business model.

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Bands Take Pay What You Want To Merch... And It Works Great

from the business-models-that-work dept

While at the Leadership Music Digital Summit last week, I got into a fantastic conversation with Dave Allen, perhaps most well known for being in the hugely influential band Gang of Four. In fact, the reason I missed the panel discussion about ISPs teaming up with the RIAA was because the conversation with Dave was so fascinating. I hope to talk to him some more in the future as well, but he's a musician (who now helps other musicians) who really seems to understand the new business models that are out there.

Part of what we talked about concerned an experiment, where he convinced a few bands to stop offering set pricing on all of their merch, and instead, told them to ask each buyer what they wanted to pay. The bands that have tried this found that this made fans much happier. Many fans paid more than list price (even when told the "recommended price") because they really wanted to support the band. Other fans, who wouldn't have been able to afford the merch at the list price, came away much happier because they were able to afford stuff. Those fans become committed lifelong fans who are much more willing to spend more money in the future as well.

A few more bands have been taking Dave up on the challenge to try this model, and Ben Taylor (son of James Taylor and Carly Simon) recently tested it out and found that he made a lot more money doing things that way.

We took in well over $1000 in CD sales, double what we would on an average night. We normally sell 3 Full Lengths at $15 each and an EP at $5.

We sold a total of 84 CD’s averaging almost $12 per CD!

Last night we were in Jackson Hole, the trend continued, proving another good night. Where we sold 48 CD’s and averaged almost $11 a CD.

We are moving more product than we normally would and in average making more than what our CD were to sell on iTunes or a record store.

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Can 'Pay What You Want' Work Outside Of The Music Industry?

from the who's-next dept

Last year, Radiohead garnered incredible attention by offering its album for free and asking fans to pay what they want. Contrary to the guffaws of many, the experiment turned out to be a smart decision which was quickly copied by other musicians. Now, we're starting to see other industries try the "pay what you want" model.

First, Good Magazine began allowing their subscribers to pay any value more than a dollar. Now, the Free Culture 2008 conference, headlined by Stanford's Larry Lessig, John Lilly of Mozilla and Pam Samuelson of Berkeley Law, is using the model. The organizers have implemented a "pay what you want" model for registration and, contrary to the myths of traditional economics, people aren't choosing to pay $0.00. In fact, with more than 200 registered attendees, the average price paid has been more than $20. As more and more examples of this style pop up, it becomes more and more obvious that new, hybrid business models will become widespread and sustainable.

Kevin Donovan is an expert at the Insight Community. To get insight and analysis from Kevin Donovan and other experts on challenges your company faces, click here.

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Less Well Known Musicians Embracing 'Pay What You Want'

from the small-musicians,-big-musicians-alike dept

It still amuses me how often when we talk about specific music business models, defenders of the old system rush in to explain why any particular example is an exception. For years, we showed examples of less well known musicians embracing these kinds of new business models, critics would complain that they might work for unknown musicians who have "nothing to lose" and need attention more than anything else, but it would never ever work for a big star who has too much to lose. Then, of course, we talked about big time musicians like Radiohead and Nine Inch Nails embracing these kinds of models, and the critics said "well, sure, it works for them with their well recognized name, but it would never work for unknown artists." Hell, someone said that just yesterday in response to a post here, leading another commenter to jokingly (I hope) coin the phrase "Masnick's Law", which is loosely defined as

"in any conversation about musicians doing something different to achieve fame and/or fortune someone will inevitably attempt to make the argument that 'it only worked for them because they are big/small and it will never work for someone who is the opposite,' no matter how much evidence to the contrary might be readily available."

I might expand on that definition a bit to have it go beyond just big/small. People will keep looking for excuses why each example is an exception, (big/small just being an easy such reason) to the point that they'll eventually miss the fact that all of those exceptions are the rule.

Anyway, based on all of this, it will be interesting to see how Girl Talk's new album does. Girl Talk is a one man DJ once mentioned (positively) in Congress as an example of why traditional copyright laws might not make sense anymore. With the release of his latest album, he's decided to use a Radiohead-style model, with a few improvements. That is, rather than just a pure "give it away and pray," he's giving people an additional reason to buy -- though I think he could still put together a better model. His is set up so you can pay what you want (including nothing at all) and get 320 kbps MP3 files, but if you pay over $5, he offers FLAC files as well, and at $10 you'll also get a copy of the physical CD when it comes out. If you pay $0, he does ask that you fill out a little survey explaining why. There still are some problems with this model (it's still a little too much like a give it away and pray model), but overall, it's quite similar to Radiohead's experiment.

Now, of course, all the folks who insisted that Radiohead's model would never work for a relatively obscure musician are supposed to now insist that this model won't work at all for Girl Talk, right? But what happens if Girl Talk is actually happy with the results, whether in direct payment amounts or in the fact that it gets him more publicity? Will they finally admit that the model isn't just an exception?

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