Trent Reznor and Another Way of Thinking About Pay-What-You-Want

If there’s an equivalent in the music tech world to the Oprah Book Club Seal of Magnificence, it would have to be an endorsement from Trent Reznor. Woop:

Bandcamp: This looks excellent to me. I have not used it but it appears to be great. This would cover your digital distribution of files and the collecting / amassing of your database.” link

But a little later in the post, he says:

“Pay-what-you-want model: I hate this concept…Asking people what they think music is worth devalues music…This is your art! This is your life! It has a value and you the artist are not putting that power in the hands of the audience – doing so creates a dangerous perception issue…Don’t be misled by Radiohead’s In Rainbows stunt. That works one time for one band once – and you are not Radiohead.”

When Trent says “pay-what-you-want” here, I believe what he’s more specifically referring to is “pay-what-you-want where the minimum is zero.” Whether such a model devalues music is an interesting question, but the point we want to make is that there’s another form of pay-what-you-want, and it does more or less the exact opposite of devaluing music.

On Bandcamp, you can set up your tunes to be pay-what-you-want, but with a minimum price of your choosing. This model allows the artist to set the price they believe represents the fair value of their work, and it gives fans who feel the value is even higher the opportunity to say so. And it completely works. For one of the best-selling albums on Bandcamp, nearly half (47%) of fans have paid more than its minimum price, raising the average price paid to nearly 1.5 times the minimum. For one track by another artist, a fan paid six hundred dollars when the minimum price was just $1 (thanks mom!).

So why does this approach work so well? Our guess is that whereas a set price does nothing to engage a fan, pay-what-you-want-with-a-non-zero-minimum invites fans to ask themselves a question. And that question goes something like “OK, given what he put into it, Trent has decided that this is worth at least $8, but is it worth even more than that to me?” On paper, you might think this would turn some off, but for plenty of people, the answer to the question turns out to be a resounding “Yes.”

The actual point of this post is to say HOLY CRAP TRENT REZNOR THINKS BANDCAMP LOOKS EXCELLENT. Thank you.

9 thoughts on “Trent Reznor and Another Way of Thinking About Pay-What-You-Want

  1. just one thing: please, give us ‘for most of the albums on bandcamp’ and not ‘one of the best-selling albums’. best-selling albums are not most of the albums. what i want to say is, that top of the money/popularity cake is not what should be setting the trend. ever.

    1. > best-selling albums are not most of the albums

      True. If you look at all pay-what-you-want, non-zero minimum sales across Bandcamp, the percentage paying more than the minimum is even higher: 50% rather than 47%. 🙂

  2. That’s interesting.

    I don’t necessarly think that giving “zero” as starting option for the “name your price” payment means devaluating my music. We are talking here of a different perspective by which digital music should run across the internet.
    But if you’re telling me that from a statistical point of view, starting with a “low” amount helps even more i will think about it! It maybe helps me and it won’t in substance change my approach in distributing high-quality files over the net.

    Thank you!

    Fabrizio

  3. I read it on the forum and I thought “Hey, I’m on Bandcamp – So I’m cool!”

    Trent and I rarely disagree. He’s got a point, but I said it first!

  4. I too was super happy about this entire post on nin.com. I am sort of torn about his idea about pay what you want because, essentially, people do that anyway. He said it himself, if they don’t want to pay something, they’re not going to. That fans are buying things on bandcamp.com means these people are the people that WANT to support the artist. Are these artists also tracking how many people are seeding their album on mininova.org? So… I think there are two sides to that so maybe pay-what-you-want doesn’t really apply when you’re talking about people that have already been filtered through the pay or no-pay doorway.

    But I guess that’s what Ethan brings up.

    As a side note- are there any plans for those statistics to be more transparent for other artists to learn from the success of others? Or is that a load of work with a nominal amount of people who’d use it?

  5. Congrats on the Reznor approval.

    It is very hard to establish fundamental principles other than the crudest observations – charge what the market will bear or – you get what you pay for.

    In the realm of international business transnational corporations are pressuring governments to establish free trade.

    Many NGOs are advocating fair trade treaties instead since fair trade implies that all parties benefit from the transaction. (I don’t have a reference but I think Adam Smith actually wrote about this)

    So rather than calling it “pay what you want” we could use the old pass the hat phrase “pay what you can”.

    This simplifies the relationship between economics and artistic merit since the selling price is dependent on the resource of the client.

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