Saturday, January 05, 2008
Thinking Strategically About Open Pricing
Trent Reznor's experiment with open pricing gets mixed results, blah blah blah, or so the discussion across the blogosphere goes.
Actually - no.
1) Reznor's experiment wasn't about open pricing. He fixed a $5 price. The point of open pricing, of course, is to price discriminate, and let people pay different prices according to value.
2) Before we go off on rants about how open pricing can't work, we'd be well advised to question the (wrong) assumption that open pricing = $billions.
Not every experiment with open pricing will be a "success". Why? For the very simple reason that the music in question might suck.
See the point? A successful open pricing experiment might yield little value if the music sucks. That, too, is efficiency - which, rather than cashflow, is the economic and strategic hypothesis these experiments are testing.
Yeah, I bought it. It just sucked. Whereas the Radiohead album is an instant classic.
Too many variables were changed to get any sort of real information from this test. Personally I'm a Saul Williams fan who never heard about the new album (and likely wouldn't have if there wasn't so much internet buzz about the results).
This isn't about open pricing, digital distribution, independent marketing, or hi-fi vs low-fi production...it is about a struggling industry throwing darts in a dark room, praying that something will stick.
isn't just about sucking or not.
music can be fantastically *good* and still not be popular enough to earn much money.