It’s harder to encourage people to pay for digital goods than physical. Studies have proven that we place greater value on things that we can touch and feel.
We pay a high price for the devices that hold the software. An iPhone can cost up to a £1,000. A MacBook more. But the social app, the music, the software, not so much.
We’re outraged when Instagram and Facebook increase the volume of ads in our Newsfeed. That’s despite the fact that we’ve paid nothing for the pleasure of using either platform. The ads are no different to those aired on TV. We accept the ads for the free TV shows, or even the shows we paid for on cable. But then, TV always had ads. It was invented for ads.
Successful social media platforms never start with ads. They get us hooked, build their user base, then start introducing the ads. They outrage the user who doesn’t feel Facebook have the right to mess with their Newsfeed. But, instead if they told us we’d need to pay £1 per month to use the channel, many users would refuse to pay or be equally outraged.
We used to buy music
Before digital music, we paid £10 for an album. There were pirate copies, in video as well, but most people went to the record store and bought music.
We were happy to pay for music when it came in a format we could touch, feel and put on our shelf. Then, digital music arrived, first in the form of file swap websites like Napster, then in the form of streaming. Now, we pay nothing. You can listen to Spotify for free and take the ads, or pay £10 per month, and listen to all the music you like. Musicians receive very little from the service.
When Radiohead ran an experiment on a new album in 2007, they offered the digital copy before it was available as a hard copy. The user could pay as much or as little as they liked. The average download sale ended up being $2.26, with 62% of downloaders choosing to pay nothing.
This phenomenon isn’t exclusive to music or video. It’s happening with every information asset. Users and customers expect you to offer your products for free. Sure, there are exceptions. You can’t legally watch Game of Thrones for free. But, if you aren’t backed by $100 millions like GoT, your best option of growing your business or art is to offer it for free.
We pay more for experiences than ever
This all comes with a caveat. You don’t offer everything for free. There are some things that we all still want, and we’ll happily pay for. In fact, the ‘experience’ economy is booming. Each year, we spend more on experiences than the last. Weddings, office parties, festivals, baby showers, holidays, speaking events, etc. We’ll pay big for experiences that mean something to us, or reinforce the perception and social status we aspire to.
So no, I won’t pay for your latest album, but if I fall in love with your music, I will become one of your 1,000 fans. I will start buying every t-shirt and piece of merchandise on offer. I will go to see you play at multiple venues. I’ll pay extra for VIP tickets. I’ll buy every book you write and I’ll pay more for exclusive, special edition content.
This applies to every information industry. Some industries, like music, are aware of it, others less so. If you’re a law firm and you’re already famous to the audience you serve, you can disregard all of the above. If you’re not yet famous, not yet pulling in the kinds of fees and clients you dream of, then you do need to start following the Spotify model.
The opportunity is to become famous
If you were a musician during the early days of Spotify and embraced the coming change, your chances of going big were much bigger than they are today. Ed Sheehan credits much of his success to Spotify. Yes, he made next to nothing on the music, but he reached far more people than he would have done through selling albums the traditional way. He sold out Wembley on the back of the free music people were streaming through Spotify.
Not everyone was as successful as Ed Sheehan. But, in the early days, if you embraced the concept of free streaming, the competition was relatively small compared to today. Now, it’s a given that you’ll be on Spotify amongst the millions of other artists. Simply giving your stuff away for free won’t get you found like it might have done 15 years ago.
Lawyers, dentists, accountants, quantity surveyors, architects and any other profession selling information and expertise. You have the opportunity now to become famous in your field if you embrace the Spotify model. You’ve probably heard of content marketing. When companies start blogging or bringing content marketers into the business, they usually miss the point.
Your product is now your marketing
This isn’t about producing empty or self-promotional articles. This is about giving away nearly everything you know, for free. All of that knowledge, it’s no longer your product. Stop thinking of it like it is. Your product is the experience. It’s the one to one. It’s the focus on a specific business or person.
The real opportunity for you now is to embrace the Spotify model. It’s coming to your industry, and if you wait until it’s already here, you’ve missed your shot.