People Are Willing To Pay, Even If You Offer Something For Free
from the some-data dept
Last week, we relaunched our Techdirt Insider Shop with a number of new and different offerings, including (for the first time) the ability to do a "pay what you want" option to get some downloads, starting off with downloads of my book, Approaching Infinity, as well as the research report we came out with earlier this year, The Sky is Rising. We often hear from critics that if people can get something for free, they will, but here's a clear cut case of where that's not true (though we've seen it in many other cases as well.) It's only the early going with our store, but already, we've seen that two thirds of people who got the books decided to pay for it, with the average price being just under $5. Over 20% of orders were for $10 or more. We'll be curious to see what happens over time and if it changes. But, once again, it seems to suggest that, even if you're giving content away for free, if people want to support you, they will.
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Filed Under: connect with fans, downloads, ebooks, pay what you want, reason to buy
Reader Comments
The First Word
“One interesting side effect...
This is fascinating. One of the "side effects" of this post seems to be a lot of new downloads, with a much higher percentage of them being done for "free" than what we saw since the store launched. This isn't a surprise, but neat to observe directly. Since we mentioned in this post that the files are available for free (even though that was already on the store), that seems to have encouraged more people to just go and download them for free. Not a surprise: highlight the "free" aspect and people will gravitate to it. But interesting to see how much it happens.Of course, it has also resulted in more paid downloads, as some of you (thank you!) also decided to give us some money for the effort.
None of this is a bad thing. The paid downloads still increase the revenue on an absolute basis, which we might not have seen otherwise, and the free downloads are still great because the goal here is more about spreading the word.
Either way: please go ahead and download! Feel free to do so for free, or if you'd like to support us and the work that we do, also feel free to toss us whatever you feel is reasonable. We appreciate the support.
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ummmmm, it was free....
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Say you find a virtual item (lets call it a ebook since they are the easiest analogy) and can either purchase it or get it for free. It's really not an essential thing that you need so you cannot justify purchasing it now.. but you would like to peruse it anyway because it has piqued your interest.
What you do is that you obtain the Free version. Whether that is a cut down condensed version (readers digest style), a few chapters (and not just chapter 1 but a random selection incl chapter 1) or a complete version in a basic format (TXT, HTML, or PDF).
You read this.. OMG It's like a new universe of wonder has appeared in your brain.. four things could then occur with three being very ethical
* For condensed/preview (Shareware) version you purchase the full product in a wide range of formats to read anywhere, you also might purchase a full hardcopy to place on a bookshelf and loan out to friends - then the circle starts again with them.
* For free product (Freeware) even though you have the product there is just this niggling feeling in the back of your mind that, hang on I have an ethical duty to acknowledge this work and how much I apreciated it so I'll throw the author some cash based on how much I can both afford and what value I think it is worth. Also I should thena wide range of formats (maybe even hardcopy) and loan out to friends - then the circle starts again with them.
* You cannot afford it, feel bad but send a Postcard/Note of acknowledgement to the author and write/talk about it to all and sundry promoting this amazing product. Best Advertisement Ever! [ie: both profit]
* You are an unethical dick who just wants everything and thinks the world owes them a favour so refuse to do anything unless it's in your best interest. We all know these people, some are politicians, some are just twits. They will always exist but sometimes just maybe they will also tell there friends/acquaintances and they will not be dicks and do the above three.
Interestingly from a direct marketing and sales point of view the people who do both Shareware/Freeware options above are the ones you want to market too in the future. They are the real bread and butter and will also promote your business/products in the future. Keep their details, keep them happy and you will have a steady cash flow by offering 'share/free' products for life.
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Except when it does work even though it can't work!
/shill troll logic
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Bingo
Fans do not appreciate being alienated and held over a barrel. If an artist, author, studio etc behaves like money grabbing elitists, fans adopt a screw-you-then mindset and treat work like a commodity to be obtained at cheapest price. If they feel a connection with the artist and feel like their money is going to a good cause, they'll voluntarily pay up.
Unfortunately dumbass industry shills like Anon (aren't they always!) above don't get that and will soon go way of the dinosaur while innovative value adders will flourish to take their place in the creative market.
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This is about the encouraging shift of a consumer market to a fan market, and that's what most of the successful stunts like most known Radiohead's In Rainbows are about.
The new way for content producers to get paid is by fans who pays for the content, while non-paying consumers are potential fans in waiting.
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Riiight
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Radio is free - yet people choose to pay for Sirius.
But naaa, no one would ever pay for something if there's an alternate for free, lol.
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so you might get "free" tv, but you are paying for it, because you pay more for the products you buy..
no matter what products you buy, it's all advertised. And you pay for that..
if you believe that companies do not pay advertisers to acertise, and recoup that expense by charging a higher sticker price for the product, you do not understand basic economics.
same with google, companies pay google for run adds, those same companies have to increase the price of their product so that they can pay google for the adds.
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Yeah, there's a tiny level of indirect payment that goes from the products you buy that advertise on the channels you watch. People who don't watch those channels also pay. People who don't watch TV also pay. People who watch but don't purchase the products advertised pay nothing.
Let's stop the silly minutae here - if people don't pay for something directly, they will usually consider it free, even if an argument can be made that it's not. The point is that the "free" service providers have found a way to make money, and often predate buying copies, so those who argue against such services being viable are rather clueless.
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Radio is free - yet people choose to pay for Sirius.
But naaa, no one would ever pay for something if there's an alternate for free, lol.
What are you talking about? It's by and large different content entirely. Not the exact same content available free and for sale as is being discussed by everyone but you, apparently.
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One interesting side effect...
Of course, it has also resulted in more paid downloads, as some of you (thank you!) also decided to give us some money for the effort.
None of this is a bad thing. The paid downloads still increase the revenue on an absolute basis, which we might not have seen otherwise, and the free downloads are still great because the goal here is more about spreading the word.
Either way: please go ahead and download! Feel free to do so for free, or if you'd like to support us and the work that we do, also feel free to toss us whatever you feel is reasonable. We appreciate the support.
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Re: One interesting side effect...
I suspect that what you are seeing is the difference between your dedicated fans (some might call them kool-aid drinkers or flunkies) doing what you want them to do (paying you), and then the more general public, who have less attachment. Those who don't care or who are less than attached are less likely to pay money.
You are perhaps confusing what your existing specific fans do with what the general public does.
It's the sort of reason why when discussing business models I often say "it works for them, but might not work in general", as this sort of business model seems to hinge on already having a bit of a fan base to really make it work.
Also, you have to wonder what the long tail effect is. Do you get most of the bigger money sales up front (as the toadies line up to get their swill), and then it fades away to being a download service that you have to maintain?
I am still wondering why you dropped your CwF+RtB tag. Did it wear out? Is it no longer fashionable?
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One prime example is the first Humble indie bundle which made over a million dollars. This was before they had a big fan base.
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You are kidding, right?
That was purely mass market, getting a number of larger (and smaller) indie game players to all point their sales to one place, and give the consumer all of their products for a pay what you want price. It wasn't done "in space". It was done by converting each of their loyal fan bases into each other's paying customer, at least for that moment.
What is interesting is that, after 14 such "bundles", their take per bundle really isn't going up that much anymore. The zero to X sales number has pretty much leveled off.
There will be similar projects where this will work, but it pretty much matches the same pattern. There is a significant base, and they are first in the door waving money and acting all cool, thinking perhaps they are "closer to god" as a result of their purchase. After that, things trail off, and it sort of goes away.
The HIB has worked in part because it's time limited. Shit or get off the pot.
It seems more like his old CwF thing... initial good sales, and then, well, everyone ignored it. Mike stopped updating it - clearly not enough in it.
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Which is it? Was it "mass market" or just a bunch of indie game fans buying each other's stuff? It can't be both. If you want to claim the latter, explain how people who never normally buy indie games are buying them. Explain why you think that a plateau in sales means that it's a failure despite it regularly pulling in millions of dollars for content that's been available for a length of time (both legally and pirated) - you know, the sales your type usual claim don't happen - especially given that the plateau level is significantly higher than the first bundles.
"The HIB has worked in part because it's time limited."
Which neither undermines its concept or its success.
"It seems more like his old CwF thing... initial good sales, and then, well, everyone ignored it."
Like most movies? Like most pop albums? Like almost everything mainstream ever? Are you seriously going to claim that if a product doesn't maintain good sales over a long stretch of time then it must be a failure? Because that applies to at least 95% of your beloved corporate roster.
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Once again, you fail at basic reading. Perhaps living in a country where most people don't speak your one and only language is driving you crazy.
They are indie companies, but each had it's own fan base. Separately they perhaps don't have enough to reach a sort of critical mass. But putting all of these companies together to promote basically combines their fan and user bases, which leads to critical mass.
"Like most movies?"
Yup, it's why most people don't go to movies on the second week, they don't buy DVDs, they don't rent, they don't pirate, they don't use netflix.
Are you through being a moron yet Paul?
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Weird, because I had never played a single game by a single one of the companies participating in Humble Bundle before I discovered it. Neither had most of the other people I know who purchased it.
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Weird that you don't understand marketing, do you?
Do you think it would be ONLY people who knew about the companies? Do you not think that this sort of think leads to "people talking about it"? Do you not think that this move created buzz, that got it talked about outside of the intial group? You know... WORD OF MOUTH?
I sort of know when you and Paul get like this, it's because I score a very valid point, and you hate to accept it.
You can join Paul in the "not yet stopped being a moron" class.
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Weird, that sounds like this:
"getting a number of larger (and smaller) indie game players to all point their sales to one place, and give the consumer all of their products for a pay what you want price."
You're not admitting you're full of shit, are you?
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But, they're still indie companies. Which, despite your rampant xenophobia, means they're still indie. Unless your definition of mainstream is "lots of indie companies", which really doesn't make any sense in the universe most sane people live n.
"Yup, it's why most people don't go to movies on the second week, they don't buy DVDs, they don't rent, they don't pirate, they don't use netflix."
You really don't understand the very clear words I typed, do you?
"Are you through being a moron yet Paul?"
You clearly don't understand English, so you're one to talk I suppose.
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Re: One interesting side effect...
Sadly, it doesn't seem to work with Step2 does it?
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Also, recognize that, as with SOPA, when you are so fucking sure of yourself, chances are, you're completely clueless about what's really going on. Speaking authoritatively about that which you are ignorant does not look good on you. You might want to stop, though I know you won't.
Do go ahead though. It's amusing to watch you flounder around cluelessly in the dark.
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Stating facts is not floundering cluelessly?
Mike, how desperate are you to deny reality? I mean, we can see it with our own two eyes. Why are you denying it?
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Fact: I commented on your post.
Conclusion: Soy milk is killing Earth.
RAWRRRrr how can you call me clueless when I HAD A FACTS!?!
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Conclusion: Soy milk is killing Earth. "
What the fuck is that stuff? Are you such a child that you cannot go and look and see reality?
Fucking moron. You can join Paul and Marcus.
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Odd that at any given time there are hundreds of people logged on Techdirt yet since the inception, fewer than a dozen (other than those TD and Cato staffers detailed to life support) have bothered to comment on your "exceptionally successful, and rather high profile effort with a well known partner".
Perhaps you view this as success. But it looks like just another Step2 flop to me.
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Earlier remarks about comments stand. You have about a dozen non-management commenters participating in the discussion of the 113 concepts. And of the 150+ comments 53 are yours, 46 belong to Harper from Cato with several from Marcus a a couple from Ho.
Is that the accuracy you were looking for?
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Keep going. That you don't seem to understand the project is only the source of much laughter here.
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you do understand Masnick that you are trying to "cash in" on ideals, not many groups can do that, usually Churches are able to monetise ideals.. but usually their ideals reflect the majority of the population..
I dont think many (if any) really know what your ideals are.. even less are willing to support it, contribute to it, and especially pay for it.
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I wouldn't be surprised if these shills think the number of comments equals the number of readers on your articles heh.
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Crowdsourcing of ideas requires participation, not silent observation. What's the point in having a "conversation" if just a handful of usual suspects like you turn up to actually say something? It's different from your usual Techdirt blog post. That's why we "shills" try to measure its success by looking at comments and ideas exchanged. And we don't see any. It looks every bit a colossal flop by any yardstick, except Mike's. No one seems to be interested in it. No one seems keen to contribute. How it's dubbed a success is beyond me.
Perhaps Mike should stick to what he's good at--running a blog. He seems unable to get anyone with any skin in the game to be the change he wants to see in the world. Hell, he couldn't even convince Rob Reid to give away his book for free.
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Furthermore, why would you be stupid enough to believe people should trust your comments or information?
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very interesting statistics though..
it is clear to well everyone that Step2 is NOT a hotbed of innovation or idea.
what is unaccurate about the post, and how do you explain how he is floundering ?
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a reasoned and logical analysis, and im am equally sure, you have noticed that effect yourself, your fanbois will pay their money, "to be closer to god", but the majority of people are far more decerning.
for some people "free" is still to much to pay, at some point you have to deliver value..
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Framing the pay
However, the default selection was $5, and selecting the free option meant actively clicking the other button... which makes people feel a little bad not paying at least something when the default option is $5. Subtle, but clever.
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I have most of their songs, and while I can listen to them for free on youtube, and have downloaded most of their free mp3s, I've probably thrown more money at them than I have any artist in a long time. I proudly wear my founders shirt because I think they're awesome and I want to encourage them to continue.
The pay what you want idea works, if you can get people invested in the idea of ownership.
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Download doesn't mean I would buy something in first place.
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if not,, why not ?
or does production costs make that impossible for you ??
if that is the case how can you justify copying works of other people who have born that same cost?
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you must therefore understand to make a song, or a movie mean paying money, money you have to recoup, if you cannot recoup it you dont make the movie..
you expect to be paid for the expense, who do you think it ok for others to have to pay that expense themselves ?
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funny, that what I keep telling the freeloaders
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"For free" earns us more money
Strangest thing is that getting people to accept the free food is really difficult. They usually end up giving us a donation, and that donation is usually more that if we charged for the food.
We have now had to start giving the money away to local charities.
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as profit on book 'sales' or more correctly as donations and if so, are you are regered charity ?
if not, what you are doing is in fact alliciting donations for a product that you also offer for free.
so the money you recived is donated money, not profit from book sales.
you will probably find that is an illegal method of elliciting money's.
so if your 'sale' price is zero, then at $5 your markup is infinate !!! so good title..
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It's funny how the trolls round here are stopping any pretense at the higher moral ground and are just resorting to baseless personal attacks. Unless of course, dickhead above me has any proof that Mike is breaking any law?
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apart from that, I dont care, masnick will never make any real money..
he cant even hold down a 'normal' job..
I dont have to get involved, I just have to bring it to the taxation offices attention..
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Go on then, that would achieve more than anything you ever typed here - assuming you're not simply lying about him again. Do you have any evidence for your claims of wrongdoing? Probably not, but that's never stopped you.
"apart from that, I dont care, masnick will never make any real money"
Yes, we can tell you don't care from the way you obsessively attack him.
"he cant even hold down a 'normal' job.. "
Define "normal". What's your occupation, I'm sure we can compare and contrast Mike's career with yours? I'm sure he'll be found lacking compared to the glorious achievements you would demonstrate if only you'd identify yourself. Go ahead, astound us.
"I dont have to get involved, I just have to bring it to the taxation offices attention.."
...and when it turns out you're just lying again and Mike's endeavours continue uninterrupted?
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Not quite.
Mike sues the bastard for defamation, thereby making money the "normal" all-american way. Litigation.
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As far as him holding a "real job" I don't think there's an argument to be made that he is not successful. While I disagree with him on virtually everything, there's no denying that he is very smart and extremely committed. He has made himself a prominent (albeit shrill and misguided) voice in an extremely important debate. And he's able to earn a living along the way. Normal jobs are fast evaporating as the norm. So my counsel would be to continue to represent your side of the debate and forget about trying to embroil him in a tax scandal that doesn't exist and would be of little interest to the IRS anyway. JMHO.
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as profit on book 'sales' or more correctly as donations and if so, are you are regered charity ?
if not, what you are doing is in fact alliciting donations for a product that you also offer for free.
so the money you recived is donated money, not profit from book sales.
you will probably find that is an illegal method of elliciting money's.
so if your 'sale' price is zero, then at $5 your markup is infinate !!! so good title.."
It is wonderful that you are trying so hard to engage with people trollish AC.
There are however just a few little errors you need to correct.
Firstly, in terms of the written work itself.
"how are you going to justify those payments to the taxation office Mr Masnick ??"
Every sentence should start with a capital letter, and if the sentence is intended to be a question, you should use one question mark to indicate that.
In written English, duplicating, tripling or quadrupling punctuation marks does not indicate increased intensity it simply suggests stupidity on the part of the writer.
"as profit on book 'sales' or more correctly as donations and if so, are you are regered charity ? "
Start every sentence with a capital letter, 'regered' does not mean anything, you may have mean 'registered' but a reader could only guess at that, it is up to you to ensure that what you write is what you mean to write. Good work on limiting yourself to one question mark. Good boy.
"if not, what you are doing is in fact alliciting donations for a product that you also offer for free. "
Start every sentence with a capital letter, 'alliciting' is not a word in English, you may have meant 'eliciting' but you actually meant 'soliciting'. Try using a dictionary for the harder words, both for confirmation of spelling and meaning.
"so the money you recived is donated money, not profit from book sales. "
Start every sentence with a capital letter. 'recived' is not a word, you probably meant 'received'
"you will probably find that is an illegal method of elliciting money's. "
Start every sentence with a capital letter. 'elliciting' is incorrect spelling for 'eliciting' and soliciting would still have been the better word to use in context. 'money's' should be 'monies'. Please do try a little harder with these things.
"so if your 'sale' price is zero, then at $5 your markup is infinate !!! so good title.."
Oh dear!
On the plus side, your little joke is quite funny, he has a book for sale called 'Approaching Infinity' and you incorporated it's title into your comment.
But back to basics.
Start every sentence with a capital, it really is important,
also 'infinate' is not a word, 'infinite' is what you should have written and unfortunately it does rather disrupt the attempted humour if you get that wrong.
'!!!', does not add emphasis, all it does is add credence to the concept that you may be less clever than you wish to appear to be, the same applies to '..'
Please do not take these corrections as being a discouragement of any kind, simply correct your errors and once we have you writing with clarity, I can pass you on this course and you can get to work on comprehension and logic, areas that we cannot even attempt until you have the basics right.
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this just shows even an idiot can be a grammer nazi, even one that is incapable of responding to the actual argument..
I did ask rather SIMPLE questions, but even simple questions are beyond you..
it's called deflection, and trying to hide behind the truth..
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Onlive is the ultimate drm. 0 piracy, and you pay for what you use.
See? It can exist in today's world. Unfortunately just not with books, music or movies.
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