The Future Of The Music/Software Business Is Now

I just got my e-mail from Radiohead with the magic link to download their new album, In Rainbows. I chose to pay £4.00 for the digital download. Of course, I could have paid less, or even nothing as the album has instantly appeared on all the popular P2P networks, but about $9 seemed like a bargain. And this is the important part, I felt good giving my money to the band. That good feeling was partially because I wanted to support this kind of business model, but mostly because I like the band and want to support them in making more music. I finally have a direct channel to the musicians and I can rest assured that my money is going directly to the band (minus the credit card fee, of course), rather than being used to subsidize lavish lifestyles for label bosses.

This development is very exciting to me personally. As many of you know, I’ve been working for the last few months on a project called djedna, which is a music distribution, e-commerce, and marketing engine/framework for independent artists and labels (as well as the home user who may want to access their personal music collection from any browser in the world). One of the payment options I had been planning on implementing was “donations,” where the artist could set a minimum price (usually, just enough to cover the credit card transaction fee) and allow the fan to decide how much to pay. Well, Radiohead has provided justification for that feature!

I will be releasing djedna as open-source (meaning anyone can download it and use it for free — thus the informal tag line of “Software For The Rock Star’s Geek Friend”) when it gets a little further along. Currently, the code base is a little messy and I’d be embarrassed to show it to the world, but it’s getting closer by the day. If you’d like to see my own installation (minus all of the cool features, like e-commerce, since it contains my own purchased CD collection rather than original music), check out DJ Edna @ Gumption. For those that are curious, I wrote it in Python using the un-freaking-believably-cool-and-fun web-framework, Django.

I’d like to determine if the same business model can work for open-source software. Yes, this model, known in the software biz as Shareware, has been around for a while now, with inconsistent results. But I figure if I’m “selling” this software to musicians and labels that are using this same business model, they may more inclined to pay something for it, even if they don’t have to.

I believe that the main reason this “pay what you feel it’s worth” model has been slow to take off is that historically (i.e. pre-internet) there have been very few (if any) products where the distribution costs approach zero, making this payment model possible without “giving away the farm.” We, as consumers, just aren’t that familiar with the option to pay. However, I also believe that we’re adaptable (especially the generations growing up with the internet) and before long we won’t associate “set your own price” with “free.” That is, we’ll all soon learn how to quickly judge what these products are worth to us, without the “one size fits all” price set by the producer. We’ll use all kinds of information to come up with the “value” (Robert Pirsig might call this the Quality with a capital Q) of a product, and most of that information will be the kind we rarely think about today when buying, say, a jar of peanut butter:

• “Do I want to support the people/company that is producing this product?”
• “Do I want to see more of this kind of product?”
• “How does the Quality of this product compare to the Quality and price of other similar products I’ve already purchased?”
• “How much can I afford for this product right now? If not very much, will I pay more in the future if I have more?”
• “Do I want to pay a little extra to make up for those that can’t pay very much?”

Once we start learning to judge the value of a product ourselves, rather than just relying on the price the producer has come up with based only on their own concerns, I believe that this “pay what you think it’s worth” model will become more successful and popular. After all, the Quality and value of a product depends not only on the producer’s opinion, but on each individual consumer’s opinion, which is conditional on their own personal circumstances. The digital revolution has finally made this previously “impossible to implement” business model feasible.

And just remember, it was a rock band from England that brought this consumerist realization to the masses. Rock and roll revolution indeed!