Fundamentally, you can't fool Mother Nature in computers, either - Andy Grove - Only the Paranoid Survive
ACCORDING TO FIGURES released to The Inquirer by Binarynow, the firm offering business software on a pay what you want basis, the model works well.
Using a sales model used by pop legends including Cliff Richard, and a small UK indie group called Radiohead, the firm is letting shoppers pay what they want for a range of software applications, so long as they pay at least $1. Only recently launched, the firm has made some of its early sales figures available to us before the experiment finishes on Monday.
When Radiohead released In Rainbows back in 2007 it initially made it available as a digital download where buyers were encouraged to pay what they wanted. According to an Internet survey conducted by Record of the Day of 3,000 people, about one-third of people who downloaded the album paid nothing, with the average price paid being £4. We can't find Cliff's figures.
The idea kicked off something of a trend. Restaurants have launched with the same pricing concept, some music download and streaming sites have used it too, and Cinergix did the same thing when it launched the latest version of its Creately design tool.
Upon launching it last month, Binarynow said, "This social experiment was originated by Radiohead, followed by many other forward-thinking artists, and perfected this year by 2D BOY and their World of Goo game. Now it is being tested on Windows productivity and Internet security software.There is no catch, no biddings, extra charges or hidden fees. You pick your price and pay what you want, only $1 or more."
This week Premysl Pech, president at Binarynow, said that the majority of purchasers had opted for the cheapest alternative, with 87 per cent of shoppers handing over the minimum payment of $2 required, $1 per application. Just over five per cent paid $10, making the $5 per application option the second most popular option.
The average price paid for Kingsoft Office and Kingsoft Internet Security was $3.32. Just over one per cent paid the full $39.95 price for Kingsoft Office, and he explained that this was the maximum amount received for any order.
One thing is sure, the experiment has driven sales. Premysl said that sales at the firm had increased by 61.76 per cent in comparison with the same period last month, though he admitted that this came with sacrifices.
"We expected that majority of the buyers would pay a minimum" said Premsyl. "I guess it is normal human behavior. Of course we hope that [the percentage] of these buyers who paid minimum would be little bit smaller. From the majority of the orders we did not receive a dime due to processing fees. We see this as our investment in long term relationship with this users."
So there you have it, letting people pay what they want depending on their means works well. Someone should tell Rupert Murdoch. µ
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