long-tail-fans
Can you find yourself in the picture?

At Indie-digest I found an interesting figure, that tries to map “The Long Tail” theory into a producer – customer relationship. It’s primarily aimed at musicians, but works for other areas of creative stuff as well. Just look at it. It’s really interesting to find yourself in the figure in relation to some of your favorite artists.

More about pricing…

Not the same, but close connected to it is a research-study from the Max-Planck-Institute about optional pricing. Their result is short: people online not only buy at the lowest price they can get. They are willing to pay much more – if the setting is right and they got the feeling, that they made a deal that is “fair” to them as well as the artists and other people involved.

magnatune-logo

The researchers inspected Magnatune between 2003 and 2005. This online-music-shop got a special pricing system, where the customer chooses the final price. Magnatune only sets the range of the price between 5 and 18 dollar and they suggest to pay 8 dollar. By surprise the average price was about 8,20 dollar. That’s 64 percent over the minimum price and even 20 cent more than the suggested price.

Key successes for the optional higher prices were the following:

  • Transparent revenue share: 50 percent for Magnatune – 50 percent for the artist at every buy.
  • Buyers convenience: Consumers could stream all content and were not limited to short audio-snippets. This heightened the feeling of having a “fair deal” for the customer.
  • Good paying customers were having the feeling of supporting a “good thing”.
  • Anonymous buyers almost always just payed the minimum price.
  • Experimentation of the preselected price-range should have a huge effect on the customers price-choice.

So, can buying stuff be rewarding for the customer? At really seems so. The unlike the theory of the “sell more for less” having a higher price can be a good fit under certain circumstances.

PS: I also wrote more about it at Gulli.com.

Research and Theory - Date published: August 13, 2009 | 0 Comments

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