Pricing of my content subscriptions - what do you think?

[JimOfferman]

I am in the process of adding subscriber-only content to my website. Aside from all the technical wizardry needed, I also need to set prices for my subscriptions. After a lot of number crunching, I've decided to offer three subscription/sponsorship levels:

• Bronze - €20 (approx. $31) per year
• Silver - €50 (approx. $78) per year
• Gold - €100 (approx. $155) per year

All three levels will offer access to the same content and all subscribers will receive a free CD version of every new album I release for as long as they are subscribed to the service. The main purpose of the higher levels is to offer people some choice in how big a sponsor of my music they want to be. The higher levels will come with some additional perks, ranging from fluff (a gold or silver medal next to your name when you make a comment on my blog, for bragging rights) to the concrete (discounted or free concert tickets).

What do you think of these prices? Just right? Too high? Too low? Why?

[Brutha]

I don't know whether giving multiple choices is a good idea. It increases the mental effort that someone has to make to decide to sign up for your service (the damn paradox of choice).

[OnionJack]

Originally Posted by Brutha

I don't know whether giving multiple choices is a good idea. It increases the mental effort that someone has to make to decide to sign up for your service (the damn paradox of choice).

One way around this is if you have bronze = your base member price. After they have signed-up they have the option to upgrade to silver/gold.

And as long as you have real and perceived value to offer your customers. I believe different tiers is a great way to target them.

[JimOfferman]

Originally Posted by Brutha

I don't know whether giving multiple choices is a good idea. It increases the mental effort that someone has to make to decide to sign up for your service (the damn paradox of choice).

Yes, choice will be an undue burden for some, but on the whole I think people prefer to have options. I can minimize this risk with a carefully designed signup form that defaults to bronze - so you don't have to make a choice.

I'm not concerned with the two additional bullet points on my subscription costs/benefits page (if 7 bullets are too much for you, 5 won't be much better...)

All these subscriptions have to 'compete' with the free content on my website anyway. I fully expect that the people who sign up for this service do so because they have a real interest in what the service provides. I don't expect to catch the occasional straggler with money to spare and no interest in my music what so ever - that's not what the service is for.

[Brutha]

but on the whole I think people prefer to have options.

People nearly always choice to have more choices but that doesn't mean that they don't get into choice paralaxis and don't make any choice but stay with the default (your free music).

Making a choices is hard mental work.

Lets say, I would be interested in your music. I listen to a few of your songs and like them and want more.
I go to your website and I can't decide whether the bronze or silver membership would be better.
If I can't decide I won't buy.

[JimOfferman]

Originally Posted by Brutha

People nearly always choice to have more choices but that doesn't mean that they don't get into choice paralaxis and don't make any choice but stay with the default (your free music).

Making a choices is hard mental work.

Lets say, I would be interested in your music. I listen to a few of your songs and like them and want more.
I go to your website and I can't decide whether the bronze or silver membership would be better.
If I can't decide I won't buy.

Yes, that could very well happen. But then again, you might also decide to purchase the gold membership, because you are feeling generous. Perhaps with 3 options a smaller number of people will buy a subscription, but those people combined produce a bigger income...

I think that the big question here is "do I want to give this guy any money at all?" Once you make it past that call, I do not believe that having 1 or 3 subscription options to choose from is going to be a deal breaker.

At any rate, I intend to launch with those three options. Time will tell. I can always remove the silver and gold options if it turns out that nobody is buying anything.

I was actually more concerned with the price levels. What do you think of those?

[Asmoday]

Just to throw in some advice on pricing -- its better to see consumer reaction then set price accordingly, setting price first is like putting the cart before the horse.

Great way to do this -- get your tech skills up and put up a sign-up page, set the price, and "allow" people to sign up. When they click to sign up, put up a page that says you're still working on this, please check back, or whatever.

This allows you to do two things:

1) Raise the price until subscriptions per week drop sharply (that's your ceiling, and try to isolate-out other factors that might be causing it to drop), giving you a hip-shot sort of optimum.

2) As long as you don't collect billing info, this practice is fine. But, if you collect billing info then don't deliver anything, that's illegal. Obviously, they're trying to stem fraud.

I've done this before, and it works much better than when I tried to guestimate what a subscription was worth to people. It also stopped me from wasting time a couple times, doing all the work to create a subscription that people just weren't interested in.

Good luck!

[Brutha]

I was actually more concerned with the price levels. What do you think of those?

Can you explain for what kind of person Bronze would be the right product, for what type silver would be the right one and for whom gold?

If you can't convey that when you want to sell your product, prices are more or less arbitary numbers.

[JimOfferman]

Originally Posted by Brutha

Can you explain for what kind of person Bronze would be the right product, for what type silver would be the right one and for whom gold?

The free option is for the casual fan and the occasional straggler - all the folk who would never spend a dime on my music anyway. Or maybe they'll buy a CD or a t-shirt, but no more. There are limits, you know.

Bronze would be for kind of people who would buy my new CD the day it comes out, but wouldn't necessarily go to all my concerts. They are fans of the music, but not obsessively so.

Silver would be for the die-hard fans. They care not only about my music, but also about me as a person. They have the t-shirt, own the poster and have the DVD on pre-order. My mom would probably fall into this category of people.

Gold is for the most rabid of fans. The kind that would pay a fee ten times as large, if they could. The folk that would stand a day in the rain to get that last ticket to a sold out concert. The people who are bigger fans of me than I am myself. The only reason my mom isn't in here is because she knows she'll get the tickets anyway...

I think that's about right

[Brutha]

Gold is for the most rabid of fans. The kind that would pay a fee ten times as large, if they could. The folk that would stand a day in the rain to get that last ticket to a sold out concert. The people who are bigger fans of me than I am myself. The only reason my mom isn't in here is because she knows she'll get the tickets anyway...

How much money do those people spend on music in total per year on average?

[JimOfferman]

Originally Posted by Brutha

How much money do those people spend on music in total per year on average?

I don't know... a lot. I thought I was insane for spending €100 on a Madonna concert (and I'm not even a fan of hers), but in the stadium I met people who bought tickets for all three shows she gave in The Netherlands and were going to see her in, I think, Paris two times more. At any rate, this kind of fan has no qualms about spending €100 or more on their favorite artist(s).

[Brutha]

I don't know... a lot.

Without knowing it is very difficult to say whether that price is to low, exactly right or to high.
If you want to sell something to those people, you have to know a bit about them. What would they want to have in a product like your Gold subscription? And what are they willing to pay.

If you have some of those fans talk to them.

[Asmoday]

I'd say its better to offer it and see what they actually *do*.

Its like this one time I went it to do a product testing down at the mall. It was for this little home electrolysis machine, they demonstrated it and all that. Then they sit ya down and ask all these questions, one of which is "would you pay five dollars? ten? 15?", and so on. I said I'd pay 39.99.

Truth is, if I was in the store, and it was sitting on the shelf for 39.99 -- I'd prolly pass it up. Is it worth that? Yeah. Is it worth more than other things I could get for 39.99? Nope.

People say "yes" because they're telling you what they think something is worth, objectively, not what they would actually pay -- they can't really answer that until they're in the situation.

Social school of psychology -- simulate the situation, observe the behavior, and predict from that.

Allthough, just as a hip-shot, I think you'll do better with just one price. I really do. On a shelf, options help you swing from the competition in a crowded market. On the web, options have tended to work against me.

[JimOfferman]

Originally Posted by Brutha

If you have some of those fans talk to them.

I already did that. I posted here to get some feedback from non-fans

Really, I'm not asking you to help me work out the optimum price for my services, but rather just asking for your opinion on the prices I've set.

Originally Posted by Asmoday

Although, just as a hip-shot, I think you'll do better with just one price. I really do. On a shelf, options help you swing from the competition in a crowded market. On the web, options have tended to work against me.

I don't think that one price will do me better. In the end, all these 'products' are ways for fans to support my career. Some fans want to be big supporters, most will want to make only a small contribution - price differentiation makes that possible.

[Blue Wolf]

Just my 2 cents worth - I would go for it with your price setting. Plus, I would add a 4th tier option (one time donation-variable price).

There are a few studies on choice and happiness - people like choices (a few) and are overwhelmee with many. Believe it or not, these articles are peer reviewed in the scientific literature -- I'm too lazy to go look them up right now and give the references but I'm going to bet that you are intuitively aware of the research or have already read this if you came up with such a plan, Jim.

With not only music fans, but the ability to reach people all over the internet -- I am sure someone somewhere will pay even the highest cost. I'd say keep up with the blog approach to let them have an insight to your music. You may want to offer something even more (a contest - let someone write music with you, propose a topic for a song, interview?) - although that may be selling yourself out or letting the customer in a bit too much. Also going to assume that you are giving the link to your website to not just fans but everyone you know (friends, colleagues, family, etc.).

I would have the variable price option because I am willing to bet you may have young fans or fans without a lot of money - a college student, someone still in school, etc. That person may really enjoy the music, be happy throwing in $5 - but even the lowest subscription would be a hardship.

I'd put links to your website, etc, on myspace, facebook, etc - let younger fans be aware of your projects and seriously, I would bet a few people would throw some money towards the project. I've seen other people successful with small projects like this.

Good luck.

PS: I may be on the way to getting myself banned now -- but I would try posting a question like this in a larger community. Every tried metafilter? Google this. May be a better place to post and get a lot of diverse responses to your question.

[JimOfferman]

Thanks Blue Wolf! Those are excellent suggestions.

[uberinquisitive]

Thought you might be interested in this blog post by Seth Godin:

Music Lessons

[Brutha]

I am sure someone somewhere will pay even the highest cost.

That still isn't worth it when you lose more on reduced number of people who buy the low price option.

[JimOfferman]

Originally Posted by Brutha

That still isn't worth it when you lose more on reduced number of people who buy the low price option.

You seem to be convinced that the mere existence of the higher priced options will have this effect. Why?

I'm sure that some people who would buy the lowest price option if it were the only option will not buy when there are three options to choose from, but I fail to see why this would be the majority of potential buyers.

Originally Posted by uberinquisitive

Thought you might be interested in this blog post by Seth Godin:

Thanks! I'm subscribed to his blog, but hadn't read this one yet. I like #13

[uberinquisitive]

Originally Posted by Asmoday

I'd say its better to offer it and see what they actually *do*.

Jim, you just have to try it out and see.

For all I know - your fans are more affluent and eager to support independent musicians, and therefore the subscription thing may be a runaway success.

Please go with your gut feeling. I think we may be more helpful in tweaking the idea once it's up.

Oh - and idea to add more value to your subscription site: it would be AWESOME if you ran a contest and wrote a song for the winner. Can you imagine the thrill of being immortalized in a song? Plus, the winner would send the song to everyone they know.

I would get a subscription just for the chance!