Finally here’s a resume about our “Pick a price”-offer.
A little history: In November we’ve offered nine CDs from our catalog. Everybody (within Germany) could choose one of those CDs, which we sent to him/her without charging anything, not even the costs for shipping. Along with the CD, we’ve send a letter that described the expenses involved in making such a record and asked people to pay whatever they feel is appropriate (here is the original post).
The offer caused quite a rush and after a few days we stopped it because we already had about 500 orders, which was a lot to cope with for just the two of us.
The reactions were overwhelmingly positive. A couple of blogs wrote about it, some magazines mentioned it and we were asked to give some radio interviews.
But even more important: we’ve got a lot of encouraging emails from people who ordered a CD.
The next day after we’ve sent out the CDs, the first payments started pouring in and we were thrilled. But now, three month after we’ve sent out the CDs, we are a little bit disheartened.
Actually we didn’t have any concrete expectations when we’ve started this. We didn’t define any target figures and we didn’t have any other specific goals. It was an experiment done out of curiosity. So we don’t think of it in terms of success or failure. Still the results allow some conclusions, which aren’t that optimistic.
As of today:
481 CDs were sent out (4 packages came back because they were undeliverable)
127 people paid, which means:
26.62 % chose to pay
The average price paid of those 127 people was:
8.87 Euro for full-length albums
7.95 Euro for the five track EP from Amanda Rogers
While those averages maybe don’t look that bad, this number definitely does:
That’s the average for all those 481 CDs we shipped, after substracting the shipping costs. Seventy-four Cents.
So maybe people didn’t like the CDs, some might think. Perhaps 3/4 didn’t pay, because they think the record sucks. That would explain the low conversion rate.
But following the sendout of the CDs, we did a little survey, where we asked how much everybody liked the CD they’ve got (we’ve used German school grades for the rating, 1 to 6, with 1 being best):
19.40% rated it with 1, 44.78% with 2 (the avarage rating was a 2.39), meaning that 64% rated the album good or very good. Still a lot of those people decided not to pay for the CD at all.
And this is basically the reason that leaves us with mixed feelings. It was great to gain that much attention and interest (about half of the people who ordered a CD had never heard of our label or artists before), we were amazed about the positive reactions and we are glad to hear that most people liked our releases.
But on the other hand we are sad and discouraged about the result. Of course we are aware of the fact that paying for music is not en vogue at the moment. And if we had offered MP3s, we would have considered 26% paying customers a decent result. But we’ve sent out a physical product.
From the mails and comments we’ve got, we had the impression that much more people will pay. It doesn’t come to a surprise to us, that there is a discrepancy between what people say and what they actually do (especially if their own money is involved). But still the result is a little bit disappointing.
We’re not yet sure what consequences we’ll draw from this experience. But for sure it’ll have an effect on future decisions. We definitely learned a lesson.
February 11th, 2008