Tuesday, October 30, 2007
The Price is Right!
Following on the heels of a recent Radiohead promotion where they marketed and sold their new album directly to consumers, AND (this is the key thing here) let the fans pay whatever they wanted for the music, is this article from DM News:
"Paste magazine kicked off a new subscription offer this week, allowing consumers to name their own price for a one-year subscription to the music and entertainment glossy."
I loved the concept for Radiohead. But, I'm not sure it will work for a printed magazine. In the case of music downloads there are no significant fixed production costs. Some initial software/website development costs were incurred, of course, but Radiohead didn't have to spit out and ship something to the fans who ordered the new album.
If I'm reading the article correctly, Paste magazine will be shipping out 11 glossy magazines plus a CD, and subscribers can receive all this for a price-point as low as $1. Significant costs...No ensured revenues.
Of course, if Paste is as successful as Radiohead, (the rumor is that their promotion made them $6 to $8 million), then this is a great gamble. And, Paste magazine seems to be aware of the risks.
"Even if the promotion fails to bring in revenue, the added subscribers will be a boon to the ad-supported magazine. Advertisers and other magazine execs seem intrigued by the name-your-price model, said Jackson (Paste editor-in-chief)."
I'll be watching this promotion closely. And, I'll be looking out for other innovative pricing strategies from other industries. The price could definitely be getting 'righter', at least for us consumers!