Pay what you want

Today on NPR, Morning Edition had a story about indie band Radiohead, who are releasing their latest album on the Internet on a pay-what-you-want basis. Given that everyone is questioning the viability of the old model for music creation, will this be the new paradigm?

The New York Times says “maybe“:

Early reaction suggested that listeners would pay, but less than they would for a CD in stores. The blog carried a poll in which the plurality of voters — almost 40 percent — said they would pay from $2.05 to $10.12. …

Whether Radiohead’s move will lead to a shift for the industry is far from clear. In taking over more of its own sales, the band risks losing what connection it has with the mass market and turning into a niche operation.

Freakonomics author Stephen J. Dubner says, “why not?”

But perhaps the big labels should try an honor-system scheme, just as an experiment if nothing else. Perhaps there are certain configurations that would work well — allowing only three downloads per user at below-market price before locking you out, e.g., or perhaps rewarding the higher-paying customers with bonus material.

Marginal Revolution says “nope.” And Mankiw says, “who knows!”