How come we didn’t have economics teachers like the authors of Freakonomics?
On their blog, they take a look at how Jane Siberry, a Canadian indie vocalist, is using incentives to get people to pay up for free music.
From the site:
Jane Siberry has decided to offer her wares to the public via an honor-system payment scheme. She gives her fans four choices:
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)Then, cleverly, she posts statistics on payment rates to date:
% Accepting gift from Jane: 17%
% Paid by determining price: 37%
% Paying Later:46%Avg Price Per Track: $1.14
% Paid Below Suggested: 8%
% Paid At Suggested: 79%
% Paid Above Suggested: 14%Even more cleverly, Siberry posts the average payment rate for each song as you pull your payment option from the drop-down menu—another reminder that, Hey, you’re more than welcome to steal this music but here’s how other people have acted in the recent past. Methinks Ms. Siberry grasps the power of incentives quite well.
While this may be a good approach for indie artists, it would be hard to argue that this would translate into a good business model for the major record labels.
Rate This Post: 
Bookmarking links:
