How Is a Canadian Art-Pop Singer Like a Bagel Salesman?

Much like Paul Feldman, the bagel guy we wrote about in Freakonomics, Jane Siberry has decided to offer her wares to the public via an honor-system payment scheme. She gives her fans four choices:

1. free (gift from Jane)
2. self-determined (pay now)
3. self-determined (pay later so you are truly educated in your decision)
4. standard (today’s going rate is about .99)

Then, cleverly, she posts statistics on payment rates to date:

% Accepting gift from Jane: 17%
% Paid by determining price: 37%
% Paying Later: 46%

Avg Price Per Track: $1.14
% Paid Below Suggested: 8%
% Paid At Suggested: 79%
% Paid Above Suggested: 14%

Even more cleverly, Siberry posts the average payment rate for each song as you pull your payment option from the drop-down menu — another reminder that, Hey, you’re more than welcome to steal this music but here’s how other people have acted in the recent past. Methinks Ms. Siberry grasps the power of incentives quite well. This allows for at least a couple of interesting things to happen: people can decide what to pay after they hear the music, and see how much it’s worth to them (it looks like people generally pay the most per song under this option); and it takes the variable-pricing scheme that economists love and puts it in the hands of the consumer, not the seller.

I think record companies will need a lot more convincing before they’re willing to try this model on a large scale. Presumably, Jane Siberry fans who go to her website to get her music are a deeply self-selecting lot, far more devoted than the average downloader. But as desperate as the record companies are, I wouldn’t be surprised to see more of this in the future. (Perhaps someone’s already doing it — please let us know if you know; and thanks to Gordon Morrison for the Siberry tip.)