Freakonomics Does 'Pay What You Want' Screening

from the reasons-to-buy? dept

Fri, Sep 17th 2010 6:04am — Mike Masnick

Last month, we talked about how the new Freakonomics movie was going to flip the traditional windowing methodology, and get released online before it was in theaters. At the time, Stephen Dubner warned that there was also going to be another "wrinkle" in how they released the movie. I'm not sure if this is it, but it's been announced that there is going to be a special "pay what you want" screening in select cities (Los Angeles, San Francisco, Washington D.C., Chicago, Boston, Dallas, Philadelphia, Denver, and Seattle). Free isn't an option, however. The prices range from $0.01 to $100, and you also have to answer some survey questions. I'm always a little hesitant to buy into straight "pay what you want" deals, because I don't think they represent much -- and I worry that people read too much into the results of any particular experiment, especially when little is done to give people a real reason to buy on top of the content. So, to some extent, I worry how Levitt and Dubner might interpret any results from this experiment.

Filed Under: economics, freakonomics, movie, pay what you want

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Call me Al, 17 Sep 2010 @ 6:23am

I always find your concern about "pay what you want" quite interesting. It obviously won't work for everyone but if an artist, or author or filmmaker, can leverage their fanbase and make it work for them then that is what is important. It doesn't need to be a model for everyone to copy and imitate, just to be a model which works for that person at that time.
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- PaulT (profile), 17 Sep 2010 @ 6:33am
  
  Re:
  "at that time" being the operative term, I think. One-off experiments like this work largely due to the novelty factor, which makes them extremely unsuited to being long-term business models - hence the concern.
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- coldbrew, 17 Sep 2010 @ 8:56am
  
  Re: "one-offs"
  To add to what PaulIT wrote, you have to understand that when these "pay what you want" scenarios are discussed on TD, there are inevitable comments from what appear to be old-school media types that like to point out that these are one-offs. Old media seems to be desperate to find that singular business model they can count on to provide profits comparable to what they enjoyed prior to the digital revolution. The prospect of having to choose a different tactic per situation doesn't sit well.
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- Mike Masnick (profile), 17 Sep 2010 @ 9:26am
  
  Re:
  I always find your concern about "pay what you want" quite interesting. It obviously won't work for everyone but if an artist, or author or filmmaker, can leverage their fanbase and make it work for them then that is what is important. It doesn't need to be a model for everyone to copy and imitate, just to be a model which works for that person at that time.
  
  I agree that it *can* work, and that it's an interesting model to watch. But my real worry with it is that many people think that if you just put things out there with "pay what you want" that the people will come and pay. It leaves out the real *reason to buy*. People will support pay what you want if the content creator has really made an effort to connect with fans, and set things up so that there's value in belonging or in patronage. Just doing pay what you want alone tends not to be enough -- and then people whine that it doesn't work. So I'd rather people really think through the whole model, rather than just the simplistic "pay what you want" aspect of it.
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Don, 17 Sep 2010 @ 6:30am

IDK
I read a portion of the book and I think Steven Levitt is smart enough to interpret the results in an objective and interesting way.
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Cowardly Annon, 17 Sep 2010 @ 6:38am

Well that really depends on when you pay.

I would think the best way to do it is have everyone entering the theater pay 1c. After the movie, depending on their satisfaction level, they are given the option to pay more.

I can't say that I would pay $10 up front for a movie that may indeed suck if I had the option to pay less.

Maybe that's just me though. *shrugs*
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keith (profile), 17 Sep 2010 @ 6:42am

I wonder what the implications are of them setting a 'floor' of $0.01, and a brief survey. Simply by stating a minimum offering could skew the results because it gives people the mental-out.

How might it turn out differently if it was a true donate system? Or perhaps allow entrance and exit free, but offer a tiered gift based upon your donation level at the exit?

Lots of not-for-profit agencies have 'levels' of Donor giving (0-$50, $51-$200, $201-$1000, etc) ... and these levels impart increasing levels of benefit to the donor.

It goes back to a common theme discussed here on techdirt ... give the customer a reason to buy!
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Anonymous Coward, 17 Sep 2010 @ 6:46am

I read BOTH books cover to cover, and I assure you, this guy doesn't need our help with interpreting data.
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Dark Helmet (profile), 17 Sep 2010 @ 6:49am

Chicago screening
I'm going to go to this for sure. If any other Chicago Techdirters are going, you'll see me there in my DMCA tshirt.

Mike, that 2nd link in the article doesn't appear to be valid. I need to know what theatre it's in so I know where to get drunk before the movie....
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- Dark Helmet (profile), 17 Sep 2010 @ 7:37am
  
  Re: Chicago screening
  NVM, took the survey and found the theatre. Hell, it's right down the street from Duffy's Tavern on Diversey, and the Wiener Circle is a couple blocks down Clark for after movie hot dogs and insults.
  
  Techdirt Chicago screening party, anyone?
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  - Mike Masnick (profile), 17 Sep 2010 @ 9:28am
    
    Re: Re: Chicago screening
    Techdirt Chicago screening party, anyone?
    
    Heh. I might actually be in Chicago that day... not sure yet
    
    (typing this from Midway on my way out of town...)
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    - Dark Helmet (profile), 17 Sep 2010 @ 9:50am
      
      Re: Re: Re: Chicago screening
      Yech, Midway? Are all the Sox fans hanging themselves from the jetway?
      
      Well, I'm definitely going, and Duffy's IS right down the street. If you end up in town, feel free to let me know.
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Nina Paley (profile), 17 Sep 2010 @ 6:51am

Pay before or after?
If they have people pay what they want upon exiting the theater, this could be a very useful experiment.

Better yet, have people pay for admission at some screenings, and pay upon exiting at others. Then compare. Ooh I hope they do that!
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- Mike Masnick (profile), 17 Sep 2010 @ 9:29am
  
  Re: Pay before or after?
  Better yet, have people pay for admission at some screenings, and pay upon exiting at others. Then compare. Ooh I hope they do that!
  
  Yeah... actually, that would be very interesting.
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Steven (profile), 17 Sep 2010 @ 6:52am

The exchange is not money
I really suspect the exchange here is not movie for money, it's select movie screening for information. I really think the survey is the key here. I'm a bit surprised Mike didn't go there. He always talks about how focusing on the money can make you miss other value trades.

But mainly I suspect these guys know what they are doing.
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Anonymous Coward, 17 Sep 2010 @ 8:13am

"I'm always a little hesitant to buy into straight "pay what you want" deals, because I don't think they represent much -- and I worry that people read too much into the results of any particular experiment, especially when little is done to give people a real reason to buy on top of the content."

So if they try to sell coffee mugs and T-Shirts, (which is the only answer I have ever heard you give on how others with content only products like music and movies can make money) they should make millions.
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- Dark Helmet (profile), 17 Sep 2010 @ 8:16am
  
  Re:
  "So if they try to sell coffee mugs and T-Shirts, (which is the only answer I have ever heard you give on how others with content only products like music and movies can make money) they should make millions."
  
  Since when were music and movies content only products?
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- coldbrew, 17 Sep 2010 @ 9:01am
  
  Re: Spaceballs
  "Spaceballs - the T-shirt, Spaceballs - the Coloring Book, Spaceballs - the Lunch box, Spaceballs - the Breakfast Cereal, Spaceballs - the Flame Thrower. ..."
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  - Dark Helmet (profile), 17 Sep 2010 @ 9:08am
    
    Re: Re: Spaceballs
    Moich-an-dizing, moich-an-dizing!
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- Mike Masnick (profile), 17 Sep 2010 @ 9:31am
  
  Re:
  So if they try to sell coffee mugs and T-Shirts, (which is the only answer I have ever heard you give on how others with content only products like music and movies can make money) they should make millions.
  
  Huh? I've never said that coffee mugs and t-shirts is the solution. I don't think those are very good deals actually.
  
  Anyway, when dealing with movies, a big part of the industry has always been based on selling scarcities: seats. That hasn't changed.
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- nasch (profile), 17 Sep 2010 @ 11:23am
  
  Re:
  To help you out for the future, this particular troll response can be shortened to:
  
  Looooooooooooootttttttttttttsssssss of t-shirts.
  
  Should save you some typing.
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Murdock (profile), 17 Sep 2010 @ 9:08am

Pay after is what I want..
1. 2nd link is bad, the URL is:
http://www.avclub.com/articles/pay-what-you-want-to-see-freakonomics-the-movie%2C45265/

2. I'd love to pay after I've seen the movie, think of that as straight up mass ratings. No more "This movie earned top dollar this weekend, so it's the best" It would be "This move has the highest average price paid after screening it really IS the best"
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Prashanth (profile), 17 Sep 2010 @ 10:41am

$0.01 or Free?
In my mind, this won't work out quite the way many people here might predict, because changing the price from $0 to $0.01 automatically turns away a lot of potential buyers. If the minimum price is zero, people can try it out risk-free and then decide to pay for it, but if the minimum price is $0.01, there's already a (maybe it's just psychological) barrier to entry. Do keep this in mind.
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Jay (profile), 17 Sep 2010 @ 12:15pm

More to this?
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Jay (profile), 17 Sep 2010 @ 12:16pm

More to this?
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- Jay (profile), 17 Sep 2010 @ 12:19pm
  
  Re: More to this?
  Damn enter button... Anyway, I was thinking that there is more to this.
  
  First, you have more money for the popcorn and drinks, and it would be great if there is actual data showing that lowering licensing fees = more money for movie theaters individually.
  
  It'll be interesting to see what comes up, and I will most definitely go to the Dallas show because I want to see this live "Bagel experiment" as it progresses.
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mojo, 17 Sep 2010 @ 12:18pm

"Pay what you want" is of arguably more value of the payment is given AFTER the event, since, in theory, the amount people pay will be directly proportional to how much they enjoyed the product.

I think it's safe to say that a good movie that the audience really enjoying is going to generate a lot more revenue than a lukewarm turkey.

THAT is a message i'd like to see fall on the doorstep of the world's content creators - generate a good product and you'll make more money.

Asking me to pay "what I like" before I see the movie is too arbitrary - it gives me no basis on which to decide how much to donate.

If I pay before the film, I might toss in $5. If I loved the movie and they put a hat in front of me AFTERWARDS, i'm likely to throw in a $20 and say "keep the change, it was great!"
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- Patrik, 17 Sep 2010 @ 2:13pm
  
  Re:
  That's a noble sentiment, but I just don't think it's feasible as a business strategy. A LOT of people aren't going to pay after seeing it, no matter how much they loved it. Maybe it's not deliberate either: some spots will inevitably be taken up by people who don't have any money to spend. Though, some will rather spend their money on something that can't be had for free (or a penny, in this case)
  
  As a guy in a band that often has to pass a bucket around to earn a buck, I know this from experience.
  
  But as was mentioned earlier, I suspect that the movie theater will see a bump in concession sales, which is good since that's where they make their money. The only reason these movie theaters are able to show the film for free is because the filmmakers aren't charging them a huge fee for the reels, I presume. It's an interesting strategy for the Freakonomics film, because otherwise I'd be unsure of it being released in theaters at all.
  
  Still, I think it's silly for people to say that they shouldn't have to pay for a film that they've sat through in its entirety just because they didn't like it. That's like people who eat an entire meal at a restaurant but don't want to pay because something was "wrong" with the food. Though nothing so wrong with it that they couldn't eat it apparently. And anyone who's spent time in the food industry knows that people try this sort of thing *all* the time. So you'll forgive me if I scoff at the idea that people will be so moved that they'll just decide to start giving away money for something that's already over.
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Mojo, 18 Sep 2010 @ 4:08am

Ok, I forgive your cynisism.

That's why it's an experiment - we're not sure of the outcome.

I would like to see both models tried - asking for "pay what you want" before and after the movie and see what the results are.

I do think it's far too cynical to assume that an appreciable number of people will balk at the idea of paying anything because they simply don't have to.

I think if you tell people in advance that you'd like them to pay after they've seen it, and pay an amount proportional to how much they enjoyed it, most people will feel a sense of responsibility and follow through.

And I do believe people will absolutely pay more for something they enjoyed - I see it as a natural instinct. Especially if people understand the concept "hey, if you liked this movie and want to see the film maker continue to make movies, it's only going to happen if he makes money..."
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The Mad Hatter (profile), 18 Sep 2010 @ 8:19pm

You've got to be kidding
Well I wasn't at all impressed by the book, so I'm not willing to pay anything to see this. Which just means that I wouldn't go, even if it was free.

Free isn't worth it, if you don't like the product.
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Richard Reisman (profile), 19 Sep 2010 @ 4:04pm

A radical enhancement of PWYW, with consequences for unfairmess
Freakonomists will be interested to consider a new variation on PWYW that has potential to change the game in pricing, especially for digital media.

FairPay (Fair PWYW) is a radically new pricing process that builds on the flexibility and participation that PWYW offers to buyers, but motivates them to pay fairly. It works where there is an ongoing relationship of continuing sales, and tracks how fairly buyers pay. If they pay fairly, the seller continues to extend more FairPay offers to them. If they do not pay fairly, they lose the privilege of continuing to buy on a FairPay basis, and must pay a conventional set price for future purchases. Unlike PWYW, FairPay is a two-way dialog that creates consequences for not paying fairly.

Because of this feedback cycle, this FairPay process may not work so well for single sales, like one movie or one album or one book, but can be very powerful for an ongoing series of sales. For example:
--An ongoing service of movie previews much like the Freakonomics movie offer...
--Individual songs from a collection of albums, offered in series, one at a time, or in small bundles...
--Individual items from a catalog of book chapters, articles, podcasts, or videos...

The process begins with one of a few low-value items, to test how the buyer sets prices. If the prices are reasonable, a few more items are offered. As the buyer builds a reputation for pricing fairly, more FairPay credit is extended (but never so much that there is too much risk that the buyer is done and will pay nothing for a valuable bundle). So perhaps it might better be called Pay-What-You-Think-Fair, because that is the result.

Details are at teleshuttle.com/FairPay.
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- nasch (profile), 19 Sep 2010 @ 4:36pm
  
  Re: A radical enhancement of PWYW, with consequences for unfairmess
  Sounds more like "Pay-What-I-Think-Fair", where "I" is the seller. Is there any reputation system for sellers, so that I could see what percentage of sales they considered "reasonable"? It would be helpful to see which sellers are more likely to accept my price. Sounds like your system is all about trying to get buyers to pay more. You need to give value to the *buyers* or the system isn't going to take off.
  
  Not that it isn't obvious, but you should disclose your relationship with the company/program when you're shilling like this.
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jogreen68 (profile), 12 Dec 2010 @ 11:42pm

PWYW
It doesn't matter what the results are, it is simply very clever marketing. Sure they will look at the results objectively, however the value is in the viral nature of such a decision. There will be much talk of this online which will increase their audience considerably simply through word of mouth online whilst also giving them a stake in the ground for their next book/venture.
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