February 12, 2007
Pay as much as you want?
I stumbled on a couple of online businesses that are trying a variant on shareware pricing for content and services: "pay as much as you want".
The first is Magnatune, which sells music from selected independent artists. You can stream for free (similar to various Internet "radio" stations). If you want to download a "CD" of music from an artist, Magnatune suggests a price (typically about $8), but you can pay as little as $5 or as much as $18 (they don't seem to allow you to pay more). In a USA Today story, the CEO claims that the average price paid is $8.93, not the minimum $5 allowed.
The second is LibraryThing. If you don't know it, LibraryThing is a favorite in some SI circles: it's an online book social network / book cataloguing service. You enter books you own (with the ability to keyword search a dozen or more online catalogues, like Amazon's, and the University of Michigan Library's, to get all of the bibliographic information), tag them, share or not with others, browse through others' collections via tags, etc. LibraryThing announced on Saturday that it was intrigued by Magnatune's idea, LibraryThing charges $10 for one year, or $25 lifetime, but now "suggests" those amounts but lets you choose from a range ($19 to $55 for lifetime accounts).
Shareware is somewhat different: you get to use the shareware with or without restrictions (e.g., some functions are crippled) without paying anything, then if you want to pay (usually for an unrestricted version), the price is usually fixed. Freeware is a bit closer: lots of freeware "suggests" a donation. However, with Magnatune and LibraryThing you have to pay something to get the goods or services, but the amount is (within bounds), up to the buyer.
An interesting experiment in altruism / guilty consciences (or perhaps peer pressure or peer regard? Magnatune and LibraryThing know who you are!).