“Monetizing the long tail: Voluntary Economics”
- economists like to say that people act in their own self-interest.
- the ‘divide 10 dollars’ game.
Unfortunately, we aren’t all like this guy!
What is it? Shopping example. Hint that if it would work, it would be very eficient.
Lots of places
People are basically decent
Paul Feldman, Freakonomics bagle guy
Photo credit Stephanie Asher: http://www.ﬂickr.com/photos/stephanieasher/305177480/
Peer production and donations. time = money.
Penguin FLOSS Linux
wikipedia, value being created, voluntarily
money is necessary at least for maintaining the site
cleaning up on donations
Radiohead was one of the ﬁrst major bands to break away from their label and oer up their
album on a voluntary basis.
Music is becoming a commodity/gift and no longer the primary source of revenue. Prince is
giving away his CDs to people visiting his concerts.
Classical orchestras are oering free downloads to get young people interested in classical
RIAA / MPAA
Taris on empty CDs, DVDs
Do not pay artists
Usually nearly 0% of the money got by these associations ends up with the original artists
Concert tickets are very expensive, and there’s a black market. Clearly room for improvement
here - clearly people are willing to pay hundreds of dollars, so why isn’t it going to the artist?
Web comics - they need some voluntary economics, as ads don’t work.
Becoming more and more popular.
Terra Bite, Kirkland: http://seattletimes.nwsource.com/html/businesstechnology/2003558690_terrabite06e.html
same for: Der Wiener Deewan: quot;All you can eat - pay as you wishquot;
Real life tipping
Small change tips. Busking.
Even freelancers who let their contractors pay at will.
Pentascope and the likes
Not many people will know this.
picture Alper Çugun (www.alper.nl)
In 2000, King picked up The Plant again and started to publish it as an electronic serial. The ﬁrst part (matching the 1982 story) was put on his own web site for anyone to
download. He also said that he wanted everyone that downloaded the story to pay him $1 either before or after reading it.
The idea was that if enough people paid up, more parts would be published in the same way. The limit was set at 75% of payers versus downloaders. The rate of paying
customers decreased over time, but at least the ﬁrst parts were over the set limit. As of mid-2001, six parts have been published (making up the ﬁrst somewhat self-contained
part of the novel). King has said that there will be more, but that some other projects will be ﬁnished ﬁrst.
New Principles for a
Talk about price discrimination - what is the principle behind:
- why ryanair tickets get more expensive over time.
- why most premium brands have a cheaper cousin.
The previous new economy (bubble 1.0) would use the principles of the real world economy.
Price Discrimination almost impossible on the web where you can ﬁnd everything. (sites with
NEXT for price discrimination.
is voluntary economics becoming an increasingly more important principle of economic
organization? Price Discrimination works spectacularly well for voluntary economies.
Subjectivity of Value (third world countries, poor v. rich people) + the notion that most things
on the web have an eective replication cost of 0 means any money anyone would give is
this makes it futile to come up with a ﬁxed price for any given good
also dependent on local economic factors and digital divide (legal windows for 3 bucks)
Use the ‘long tail’ of your client base - there are a few folks who -really- like your product.
abundance of information
it’s no use demanding payment upfront for musicians, newspapers, or even freelance
professionals. there are some many available that you need to lure people in in another way.
Fame and fortune
No, that’s not quite right, its...
Fame before fortune
.. which is why micropayments don’t work. Fame = attention, and attention is very valuable.
It’s relatively easy to monetize it, especially with voluntary economies.
Ask someone to obey a law which does not seem apparent - how do you get people to pay
for a free thing? What have the previous examples taught us - what are the triggers we can
distill from them?
Human face (fruitbox vs. same thing in sainsburys). Humans hardwired to be kind to
Peer Pressure. Bagel guy. Public donations. Tips (‘social laws’). Community (star trek
enterprise continuation fund. Serenity buy-2-DVDs-plan).
Rewards. Stephen King (plant).
Get people emotionally involved. Make them want to support you. Radiohead nailed this one.
Is voluntary economies a side-eect of a good economy, e.g. is it a Luxury good?
Is it necessary for a general amount of wealth to be present for people to make voluntary
Possibly not. Voluntary economies are more eficient. Then again, on the surface it sure
seems like it. Restaurants still get tipped in lean times. Open question.
cool short story about how voluntary economies can be really powerful:
also read up on Wikipedia lemma on Maneki Neko (http://en.wikipedia.org/wiki/
Maneki_Neko): “A raised right paw supposedly attracts money, while a raised left paw attracts customers.”
Image: random google image search, needs a better attributed one.