Pay what you think its worth

[Buffy]

This could go in the Computer Science thread because its about "making money off of open source software," but its really an economics discussion and the basic idea came out of the record business.

Some of you may be familiar with the recent news that Radiohead has released its latest album as a download on its website, but has come up with an innovative offer: Pay What You Think Its Worth. You can even choose to pay 0.00, although you still have to pay a quid for the transaction charge!

This has produced lots of skepticism in the record industry (see link above), but in the software business, its generating lots of buzz as discussed in this recent blog in Infoworld:

Originally Posted by Brad Shimmin, Infoworld, 10/9/07

With such happy-happy-joy-joy support for open source infusing the software industry right now, I think the industry and open source is ready, and it's mature enough to move on to a more directly profitable business model. What I'd like to suggest is that the open source industry adopt a new (some may call it old) business model that will garner revenue not just from the enterprise, but also from the average consumer. Call it YEPR, Your Estimated Price is Right open source licensing. Think of it as an individualized equity trade, or fair market value as defined by the individual customer. The idea is a lot like donationware, which Wikipedia defines as:

"A reasonably satisfied user is suggested to compensate the programmer if real value or use is achieved from the program. The compensation amount is left up to the discretion of the user. This amount is based on a value the user estimates they derived from the program."

However you want to classify or name it, what I'm suggesting is a model where users, in order to download open source, must pay for the code itself. The trick is that users can name the price they are willing to pay. If the software is worth nothing to them (nothing to be ashamed of), users can declare a value of $0.00. If it's worth $2,000, then that's what it's worth, and that's what it should cost.

My own experience is that the software market has a dichotomy between individuals/small businesses who can't afford anything and a high-end of corporations that have been taught to pay too much (much to my own benefit), BUT that when prices are driven down to please the low-end, there is no stopping the big guys from complaining that they should not have to pay more "for the same darn bits on the CD."

Lots of issues here: discuss away!

Resolved: most people will pay nothing if they can get away with it.

Will code for Manolos,
Buffy

[Buffy]

So how about going to the grocery store and paying a dollar for a huge cart of stuff.

Would this work?

Filet mignon wants to be free,
Buffy

[InfiniteNow]

Most successful organisms have evolved an inherent tendency to receive maximum benefit for minimum expenditure. I can't see how this would work. Even in a corporate setting, the purchaser would be pressured by their managment to minimize the impact on their bottom line.


I may "think" it's worth more, but that sure doesn't mean I'm going to pay it if I can avoid doing so.


You're out of your mind if you think you're getting more than $5 for that bag. It says Prado.

[freeztar]

This is a good question.

I personally love donationware and use quite a bit of it. If I use the software a lot, then I will donate a small bit to support the dev. It's tricky though. I never know how much to give.

I think donationware, or open source with donations, is a great model for low level devs, but fails outside this tiny market. I don't think Radiohead will see nearly the amount of money they have from other albums, but we'll see. I hope I'm wrong.

The reason I think it works for software is because a lot of devs make freeware to stay competitive and as a way of advertising their pay products. This is a special market scenario that does not translate to other markets. Devs are able to recooperate income from software that would otherwise have been free. As you pointed out Buffy, supermarkets can not do this. Actually, I can't think of one market outside of software that could make this business model work.

[Buffy]

Originally Posted by InfiniteNow

You're out of your mind if you think you're getting more than $5 for that bag. It says Prado.

I actually have quite a few Prado's bought on the streets of Manhattan, but it took lots of haggling to get them down to $5!

Try that haggling at Prada though and you'll get escorted to the door by security.

I don't leave home without my Amex Platinum,
Buffy

[freeztar]

Originally Posted by Buffy

I actually have quite a few Prado's bought on the streets of Manhattan, but it took lots of haggling to get them down to $5!

Try that haggling at Prada though and you'll get escorted to the door by security.

I don't leave home without my Amex Platinum,
Buffy

Not to veer the thread off track more, BUT I was recently discussing purses with my girlfriend. I came to the conclusion that if we took all the money that women spend on purses and shoes, we could feed every person in the world several times over.

[Buffy]

Originally Posted by freeztar

Not to veer the thread off track more, BUT I was recently discussing purses with my girlfriend. I came to the conclusion that if we took all the money that women spend on purses and shoes, we could feed every person in the world several times over.

That's a lie!

However it is true if we didn't buy all those cute purses and shoes that you guys would spend more time watching football instead of us, which would lead to [several important steps omitted due to this being a family forum]...negative population growth! Although I guess that would have the same effect as what you propose, huh...

You'll have to pull that Gucci from my cold, dead hands,
Buffy

[DFINITLYDISTRUBD]

Resolved: most people will pay nothing if they can get away with it. - BUFFY

Yup!!!!
I'ts just nature at work... Put a sign in the window of your car that says "make offer" and just as sure as chocolate is mighty tastie and addictive the offers you recieve will not reflect the actual worth of the vehicle nor will they be anywhere near it.

Take Cello strings for example cheapies cost around $30 USD good ones around $200 -$400. Why the vast difference?? They're made in pretty much the same manner...the only real difference being the material they are made from and the only difference there being a few cents in material cost. Care to guess which are on my cello? (not by choice though...I ain't rich!) As to the why there are those that can AFFORD to buy them...that prefer their better tonality...and generally have the bread to buy celli that excede several thousand dollars. If persons could choose the price on their strings nobody would shell out the big bucks and string manufacturers would have to make and sell more to line their pockets. (SHEESH $400 for animal guts!!!!!!!!)