Philosophical MUSINGS ON PWYW

There used to be a hep cafe near where I lived. Although, in all honesty, it was less of a cafe and more of a place where people came to hang out, meet new people and discuss ideas. Among its regulars, it was the hub of cultural activities - poetry jam sessions, movie nights, book readings, gay pride events. It didn't serve much food - Tea and maybe some Momos.

There was no specified price to the items you bought. You could pay whatever you wanted. The cafe was surviving solely on the generosity of its patrons. Sadly, it shut down. It needed to raise a certain amount of money to pay the annual rent, but it could not.

The point of this story is that PWYW is a romantic idea which should work perfectly in an ideal world where we pay for a certain experience in proportion to the amount of value we stand to gain from it.

An Ideal Transaction: Amount we are ready to pay for an experience/commodity ∝ Value we gain from it

Unfortunately, that is not always the case. We often pay more for a disproportionately low value experience and become miserly for high value products. But, why do we do this when clearly it's a suboptimal strategy to live a high quality life?

The answer I believe is our unconscious biases:

1. Overvaluing a tangible commodity for its superficial nature - Think expensive clothing, eating out at that new fancy restaurant, or the shiny new gadget. I do not mean to discount the immediate value of any of those things. Nor do I mean to suggest that we buy only cheap stuff. Heck, I love a nice fancy meal once in a while myself. But, like on a hedonic treadmill, the more we engage in them, the lesser pleasure we derive each time. So having coffee in a good cafe once a fortnight gives more value than a daily visit.

Furthermore, the value given by products of this nature is often fleeting. Often, our perceived expected value of the experience is less than the actual value. (Example: The movie 'Deadpool'. I am going to go out on a limb and say that I derived more pleasure from the expectation of the awesomeness of the movie than the final product itself).

Expected Value (EV) > Actual Value (AV)

This is in part due to the subtle FOMO (fear of missing out) induced by peer pressure we face when everyone around is talking about it. The perceived value automatically becomes much higher than the AV.

2. Undervaluing an intangible benefit/experience - Think a good book, a music album which you'd play over and over again, software, a functional yet expensive piece of household accessory that is going to make your life exponentially better (an ergonomic chair, a standing desk, etc.) We forget that, in the long run, the value we get from these things is so much more than the cost we put into it. The over and over usage of their functionalities pays itself off and then some. In these cases:

EV < AV

I speculate that the reason we harbor biases against paying for such cases could be due to our latent (or in some cases, pronounced) desire to feel validated for our choices. We don't get that validation from buying an original copy of a software or a better chair for our back or buying an album. No one commends an item for its functional superiority, it is quite often the decorative qualities that attract attention. In fact, you could even be ridiculed for overspending or paying for something that could be pirated for free. But, if we recognize that this particular item is going to inspire us to be a better version of ourselves, the issue of cost would become much smaller.

Secondly, maybe the constant desire of novelty via external stimuli causes us to spend our budgets on EV>AV cases. So, we still torrent stuff which we could have acquired in an overarching package (e.g. at Netflix, Apple Music, Kindle Unlimited), costing less than one decent meal in a restaurant. But, we fail to understand that this is an insatiable desire - there will always be a new pub to try.

Coming back to PWYW, there are some positives of the concept. The freedom to choose how much you think something is worth makes your product accessible to so many more people. Think all those bands whose music we pirated and would now happily pay for one of their concerts. The question then becomes, how to make a living out of it.

With PWYW, there are always 3 categories of people:

Free loaders / hoarders - It is a gross generalization on my part, but most of these folks who don't pay are much less likely to actually consume your art. At my last company, Musicfellas, there were customers who downloaded only the albums which were PWYW for 0 bucks. I seriously doubt if any of them ever got played.

- It is a gross generalization on my part, but most of these folks who don't pay are much less likely to actually consume your art. At my last company, Musicfellas, there were customers who downloaded only the albums which were PWYW for 0 bucks. I seriously doubt if any of them ever got played. The Nice Guys - They are driven by a righteous sense of how an interaction with an artist in the modern world should look like. They pay an average amount and feel content with supporting the artists. You could expect them to listen/read/watch your work with a decent level of interest.

- They are driven by a righteous sense of how an interaction with an artist in the modern world should look like. They pay an average amount and feel content with supporting the artists. You could expect them to listen/read/watch your work with a decent level of interest. The 1000 True Fans - Below is a quote straight from the article linked here. These are the people who will be the highest payers and your most generous patrons. They will write back to you giving detailed, insightful feedback on your work.

A True Fan is defined as someone who will purchase anything and everything you produce. They will drive 200 miles to see you sing. They will buy the super deluxe re-issued hi-res box set of your stuff even though they have the low-res version. They have a Google Alert set for your name. They bookmark the eBay page where your out-of-print editions show up. They come to your openings. They have you sign their copies. They buy the t-shirt, and the mug, and the hat. They can’t wait till you issue your next work. They are true fans.

So, the answer to making a living out of PWYW format could be to build and engage with this community of 1000 true fans. I would love to hear success stories around you which hold true to this rule.