The article Carly Z wrote about an ebook ‘pay what you want’ study done by ebook retailer Smashwords got me thinking about how those systems work in general. Coincidentally, on the very day I read her article I also listened to the latest Jazz Session with Jason Crane featuring trumpeter Jason Parker. So what is the connection? Read on and find out!

The common thread is ‘Pay what you want’, of course! While listening to the interview I decided I had to buy the new recording about 5 minutes in when he played a recording of a mashup of (Gershwin’s) Summertime and (Wayne Shorter’s song from Miles Davis’ Miles Smiles) Footprints. So I checked my options. I could click through Jason Crane’s site to Amazon and thereby give him a click-through cut of the proceeds … but I wanted digital download, not CD. So I headed to Jason Parker’s site and saw that you could order the CD there, or you could opt to imply download the music for free, or enter your own (>$5) ‘Pay what you want’ price.

Jason is definitely an advocate of the system, saying in a comment here:

I have done this with great success with my own CDs (Jason Parker Quartet) and with CDs/DVDs of a band I manage (The Teaching). I can attest that it works wonders in both of the ways that Derek says it will.

I am having a CD Release Party for my new cd on Oct. 24th and will check in after to let you know specific numbers.

To put that quote into context, here is the original idea from Derek Silver’s Blog:

A band he was managing (Griffin House) was doing the usual thing of selling CDs for $15. They’d mention it once or twice from the stage, and sell about $300 per night on average.

He asked them to try a completely different approach:

1. Say to the audience, “It’s really important to us that you have our CD. We worked so hard on it and are so proud of it, that we want you to have it, no matter what. Pay what you want, but even if you have no money, please take one tonight.”

2. Mention this again before the end of the show, adding, “Please, nobody leave here tonight without getting a copy of our CD. We’ve shared this great show together so it would mean a lot to us if you’d take one.”

It changes the request from a commercial pitch to an emotional connection. (Replace market mindset with social mindset!) Allowing them to get a CD for no money just reinforces that.

Terry said that the band did this for a while, and soon they were selling about $1200 per night on average, even including those people who took it for free! I think the average selling price was about $10.

But the important part came next:

Because every person left each show with a CD, they were more likely to remember who they saw, tell friends about it, listen to it later, and become an even bigger fan afterwards.

Then, when the band came back to a town where they had insisted that everyone take a CD, attendance at those shows doubled! The people that took a CD became long-term fans and brought their friends to future shows.

Jason is no stranger to innovative viral marketing ideas. As part of the launch of his ‘No more, no less’ CD last fall he launched a 100 CD’s Project (an idea he says hot got from ’100 Book Project’ by Christine Mason Miller), in which he placed CD’s in public places with a note and a label (This is a Gift for YOU!) in hopes of spreading his music by giving it to random people to sample and share.

He has also experimented with eliminating the cover charge at a club where he and another band were playing, asking for donations instead. Many folks didn’t pay, or weren’t really there for the music anyway, but there were quite a few folks who willingly paid the $5 cover charge, even though the bands were unannounced and unknown to the patrons coming in.

Parker also ran an experiment and made all of his music downloads free for Black Friday 2009. Then he reflected back on what he learned in a later article:

I also learned that even when given the opportunity to obtain the music for free, there are still people out there willing to pay for it, thereby supporting the artists that created it. This is truly remarkable, and gives me faith that music lovers get that the music they love cannot exist without their support.

After I bought his music digitally I got a nice personal email thanking me for buying the music. That allowed me to follow-up on his message from that blog post, and see what his experience has been like with the ‘Pay What You Want’ system over the last four months since his CD release. Here is what he said:

Overall I have been very pleased with the whole “pay what you want” model. At gigs I have seen a great increase in sales, and I’m averaging about $12 a disc, which is more than the $10 I used to charge. It has gotten more CDs out into the world, raised more money, and has generated lots of good will with my fans. They really respond to it. I have also done a few “pay what you want” gigs and have found that very effective too.

As for online sales, it’s a different story. I am seeing lots and lots of free downloads, a few paid downloads a week and very few CD sales. It seems that most people do not buy physical CDs through Bandcamp. I’m still selling them through Amazon and CD Baby, but I’ve had way more downloads that discs purchased, which is actually a good thing as I see it, since downloads don’t cost me anything.

I will certainly continue to sell my music this way, as it’s been overwhelmingly positive.

So while it is true that the Jason Parker Quartet isn’t beating down the doors of the ‘Billboard Hot 100′ in terms of sales, he has found a method that rewards him and his musicians for their work, while also letting the audience feel that they are invested in the music and the process. I hope this sort of thing continues to spread and that more and more business-side folks realize that by setting up a cooperative relationship with their customers they get not just sales and loyalty, but potentially even more financial rewards than they would ever expect.

So what do you think? How do you see this type of system within other contexts?

Source: Jason Parker Music