Yet Another Voluntary Pricing Experiment

Cite this Article
Joshua D. Wright, Yet Another Voluntary Pricing Experiment, Truth on the Market (October 30, 2007),

This time from Paste Magazine (HT: Peter Schwartz via Wired Blog Magazine), and motivated by the Radiohead Experiment, and with an interesting twist:

Subscribers who choose to pay more than the normal $19.95 asking price will have their names printed in an upcoming issue of the magazine, but the entire year-long subscription can in fact be had for $1, as I just confirmed.

Both Paste and Radiohead appear to be making these moves to broaden their consumer base (and as Geoff has pointed out, getting access to valuable customer data), strategies that are at least related to strategies commonly observed from multi-product firms, rather than some more permanent attempts to incorporate voluntary pricing into the business model we’ve seen (e.g., restaurants).  Aaron Schiff has some nice posts up looking at some voluntary pricing download data from a website called Jamendo which makes the data publicly available (the minimum donation is apparently $5). Schiff reports that the average donation is a (surprisingly high in my book and much higher than the reported estimates of Radiohead’s donations) $14.55 and the data are available on his site.