YakShaving

This semester, I’m fortunate to be working on the business model for the electronic learning record with an esteemed colleague at the Institute of Design.

The Electronic Learning Record, for the uninitiated, is a project sponsored by the John D and Catherine T MacArthur Foundation. We’re trying to develop means by which students (and “non-students”) can go about

We put together a number of different business models that we thought were relevant, including “give-it-away-now” (thanks for that, Kiedis) software and charge for the hardware models, a la iPod.

There’s one recent addition that wasn’t on my radar before, and it hadn’t even occurred to me after the Radiohead CD came out earlier last month. Maybe people will pay whatever they’re willing to pay, and content providers (or people who store the record) will extract how much revenue they can from these payments.

On balance, most people ended up paying nothing for the Radiohead album. From an article about the subject:
“Among U.S. residents, about 40 percent who downloaded the album paid to do so. Their average payment was $8.05″.

Well, the whole pay-what-you-want thing sounds great (another magazine is trying it out), and I’m sure builds rapport with your global audience for a music producer. It generates goodwill–and to the first band that did it (Radiohead), lots of buzz, even if the CD itself is a loss-leader. Over time, I imagine if other bands imitated the same model, people would get used to the massive selection and it’d be just like pre-biz-mod Napster again. Hellooooo 1999 & wanton music piracy.

Maybe an interesting riff off the Pay-What-You-Want model might be “Pay-What-You-Can”. In a systems class this semester, we’re addressing the skyrocketing costs of care in the US Health system. Pay-What-You-Can might be a decent way to implement Healthcare FICO scores, as mentioned by Dr. Shreeve in his blog.

Bringing it back to the Electronic Learning Record, charging parents in well-to-do suburban areas more for added functionality (multimedia?), or maybe just to generate more free revenue to offer ELRs for students in lower-income families seems like a reasonable approach. I guess we’ll just have to prototype it to see.