The Role Of ‘Perceived Value’ in music is Small

The Role Of ‘Perceived Value’ In Music Is Small And Fading Fast

The basic premise is that the power of “perceived value” can make charging for music a better proposition than giving it away for free, based largely on a comment from an indie artist. (Quote follows in the article)

My partner tells a similar story of his father attempting to sell an older car and offering it at a very low price, with no takers. A week later he doubled the price, and sold it almost immediately.

Similarly, we had a series of training videos in Australia that we ultimately doubled the price of, and sold more.

When people perceive something as being free, they do not value it. Even if they go and acquire it for free, the fact that it has a value assigned makes them want it more!

There is actually some truth to this idea, but only under specific circumstances and with a whole lot of caveats. Perceived value is a real thing, and it can be pretty powerful—but there are significant limitations on how it can be applied to an infinite good like digital content. A good (non-musical) example is self-published Kindle novels: for an author just starting out, it’s actually probably a good idea to charge $0.99 instead of making it free, because of the way Amazon separates the lists of free and paid books. Of course, as authors like Joe Konrath have discovered, books at $0.99 make a lot more money than books at $2.99—so the limitations of perceived value come into force quite quickly. In app stores, paid apps may once have held some clout over free ones—but now many of the top grossing apps are free and ad-supported, and the perceived value of a price tag to download has all but disappeared.

I posted that paragraph because, like all these new approaches, it’s not a “one size fits all” approach. Yes, that’s more complex, but for those who do the work of building a fan base there are rewards.

Beyond that, and perhaps most importantly, there is nothing that says you can’t charge for your music and also give it away for free. Or, at the very least, charge for it but accept (or better yet embrace) piracy. When payment becomes optional for fans and prospective fans, then they see it as an affirmative choice to support the artist, and many will make that choice. Dan Bull sold enough copies of his Sharing is Caring single to hit the pop charts, and a lot of the attention came not from the fact that he was charging money, but from the fact that he was also giving it away for free (as he does with all of his music).

Remember too, Nine Inch Nails who made more money with a “pay what you want” model than ever from a record company, and they retained ownership and ultimately ‘normal’ distribution channels.