Jun 102013
 

As part of our launch of Fate Core and Fate Accelerated, we’ve made the PDFs available on a pay what you like basis. This includes choosing to pay nothing.

We’ve worked with DriveThruRPG to make pay what you like — called “pay what you want”, or “PWYW”, on that site — an option for our PDFs there, as we know a ton of gamers prefer to get their PDFs through DriveThru. (You need to click through to the individual products to see that they’re PWYW — right now they display a price when shown in list format. Those prices seem to exert a strong psychological effect on what folks then choose to pay, it turns out, but that’s a topic for another time.)

In rolling this out for our stuff, they decided to roll out the beta of the code for all of their publishers. A few other publishers have gotten on board (tho that’s not easily searchable — yet). With only a few days of data, folks are already trying to draw some conclusions about Pay What You Want and whether it works for them as publishers, as purchasers.

So, in light of that, here’s what I have to say about PWYW that I think are important to keep in mind.

Pay What You Want is a marketing strategy, not a sales strategy, similar to (and in fact containing) “free”.

Simple principle: PWYW is not functionally different from a free PDF and an associated “tip jar” button. (That’s how we’ve implemented it on FateRPG.com in fact.) Psychologically for the purchaser it may be a little different — I think there might be a slightly higher chance of someone leaving a “tip” when you say something is PWYW instead of saying it’s Free, Tips Optional. But that is ultimately a side-effect.

As a marketing strategy, audience is the goal of Pay What You Want, not sales dollars.

You do this because you want more folks, even the folks who couldn’t or wouldn’t normally afford the item at the price you’d set for it, to acquire your work, engage with it, become aware of it. That “better chance of a payment” side-effect can pay dividends to this goal, of course: if folks are paying even a little for a “free” item, there’s a greater incentive to regard the item as having value, which can increase engagement. Engagement drives to the heart of the marketing strategy, of course, so that’s a positive feedback loop in the mix.

To pursue the sales motive in a Pay What You Want context, the audience you build should get sold follow-on materials which are not PWYW, eventually, if not immediately.

If you’re not planning on creating and selling additional things based on or tying into your PWYW product, it’s not so hot as a strategy for sales. (It might be fantastic as a strategy for certain ideological stances about games and access to games, so take note: I’m only talking about its efficacy as a sales strategy.)

Maybe you’re a musician, and you’re putting your PWYW album out there; this should have positive effects like stimulating sales of your back catalog, goosing ticket sales for your upcoming concert tour, and so on.

For Fate Core, it’s a bit of a no-brainer for us: we’ve got the Fate System Toolkit, Fate Worlds, the Atomic Robo RPG and a bunch of other things in the pipeline for the next two years at least. Most (perhaps all) of those aren’t gonna go out there as PWYW products in digital. On top of that, there’s the physical products as well. PWYW — especially the free aspect of it — provides a low cost try before you buy option for the purchaser who eventually intends to buy the paper version of the game.

To the extent you might evaluate sales performance for a Pay What You Want product, it’s largely a function of your existing audience going into its release.

While you will be growing your audience somewhat through a PWYW strategy — just as you would with a free product — the extent to which folks will show up and pay for your work under this paradigm doesn’t much change from the chance they’ll show up and pay a fixed price for it. It does improve some, inasmuch as you’re removing a fixed-price-based barrier to their willingness to purchase. But if you have a small audience to start, you will likely simply only see small revenue on your PWYW item unless some external factor — a huge, “everyone must get this and you should all really pay $X for it!” review from a trusted source, for example — changes the equation.

For Fate, we’ve been building an audience for a decade. Our fans are pretty damned dedicated, and the audience has grown to a very respectable size. The Fate Core Kickstarter is one way we’ve managed to tap into that. Our PWYW release of Fate Core and Fate Accelerated is another way. Over on DriveThruRPG, Core and FAE both went up on the 5th of this month. We’re 5 days later and we’ve grossed $2000 between the two of them (before DriveThru’s cut). Core itself has seen just shy of 300 paying customers, averaging a little more than $5 per purchase. These are folks paying $5 because they want to, not because they have to. Pretty incredible, and definitely something we’ll use to improve the Fate Core line.

But it is, again, a side effect. The number of actual downloads on DriveThru is more like double the number of paying folks. We already expanded our audience considerably through the Kickstarter, and on an ongoing basis, Fate Core out in the wild like this will keep that expansion going. And to the extent folks want to see that expansion turn into more well-funded things from Evil Hat, they can vote for that with their dollars, to the extent they feel they should.

It’s a good thing.

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  • Stephen Miller

    I find the PWYW method of sales interesting. I have to agree with you that if you do not plan on selling additional material for a product, PWYW may not be what you want to use.

    My real question is: what if I get some PWYW product, pay $0 for it, read/play it, decide that I like it, and want to now pay for it. Do I just buy it again, this time paying for it? Go to one of the alternate sales sites and buy it there? Just contact the publisher and offer them money?

    • fredhicks

      None of the places I’ve linked to here will prevent you from making another purchase of the same product later on. So, that way! Or the tip jar button on faterpg.com. Etc.

  • jivjov

    Stephen: DriveThru lets you go back and re-buy the product, so if you get something free and end up loving it, just go back and buy it again, this time for how much you think its worth.

  • Cpt. Sqweky

    Well, that makes me feel better, actually. I’d heard about the PWYW thing, but hadn’t gotten it because I’m basically broke and would have felt like I was taking advantage of of the situation by not paying for it.

    • http://visinsita.wordpress.com/ Gwathdring

      Yeah, don’t feel bad! If someone makes their product PWYW, they understand (or at least it should be plain enough to them that it’s not your obligation to realize they don’t understand) that customers can and will pay little or nothing for a PWYW product. You as a customer shouldn’t have to agonize over whether or not someone making something PWYW understands the full implications of that–you might as well worry as to whether you’re ripping off the local bakery when you buy a loaf of Sourdough; afterall, how can you be sure they’re setting a fair price? What do you know about pricing bread? (if you know a lot about pricing bread, substitute a similar but more appropriate analogy).

      I don’t think a customer should ever feel *bad* paying the price they are offered in case of ambiguous value where they are not at clear advantage. Sure, if you know that you have access to information the seller wouldn’t (you’re personally a diamond expert) and you realize the appraisal they paid for was a poor appraisal and the gem is actually worth MORE (even after factoring in your profit margin on the purchase) … you know, maybe you could offer them more for it. Then it becomes more of a moral conundrum.

      But that’s not what’s happening here. Someone is estimating the value of an ambiguously valued commodity, and is setting a price which they offer to you generally through impersonal means. It is not your responsibility to know the exact mathematics of either the product’s actual value or the retailer’s expectations of value. That’s a very subjective issue to begin with and it’s an unreasonable thing to expect of customers. One can hardly expect customers to pay what they value the product at unless they set that value as the minimum buy-in. The checkout counter/page shouldn’t be a test of moral fiber or of appraising skill. It should be a place where the customer forks over an agreed-upon amount of money.

      So go for it.

      The same goes with sales/discounts , for the most part. With some exceptions, those sales are a price being presented to you knowingly. Take it.

      If you then want to give more money to the creators or sellers? Do it! Donate, buy their other games at full price, buy multiple copies of the game and give them away to friends … but DO give those copies away. Don’t just hoard them out of a feeling of responsability to a price–you’re not helping the company by doing that, they see the same dollar amount into their accounts either way (except in some very special circumstances, I guess). This is all especially true of digital products! It doesn’t cost much to hand over a PDF. There are bandwidth considerations and royalties through third-party sellers. But the overheads on physical products are WAY higher. It’s not necessarily free to give away digital products … but it can be pretty darn close especially for a company that already has that infrastructure in place for non-free things. That’s not do say the product doesn’t have production costs! It certainly does. Indeed, that PDF rulebook has the same production costs as the physical book right up until the printing, shipping and warehousing–it has art, writing, layout, editing. The works.

      This makes, if I may tangent, digital sales an inherently thorny issue. Clearly I deserve just compensation (cost + reasonable profits) for my work if people want to enjoy my work; we’re all (well, some of us) pretty comfortable with that logic. But with digital products … each individual product costs very little. It’s not like physical goods where you can breakdown the cost of printing and shipping into individual book-sized chunks very easily as a baseline price; that doesn’t cover your production costs, of course–but it gives you a baseline “fair” price. Sure, it might STILL be a fair price FAR above that baseline. But you can at least call that baseline + reasonable profits a fair starting place. Where’s a fair starting place for a .PDF? As a starting point you’ve got … maybe some bandwidth costs? Sure, you’ve got production–art, writing, layout, work-hours, etc. But, see, there’s that ambiguity in the baseline price of digital goods.

      BOTH physical goods have a following ambiguity: once we set baseline … we need to cover those further-back production costs–but how much we charge per product to do that changes based on how much product we move. So you have to guess how much product you’ll move. Simple, familiar. With digital products, though, this means both components of your price (baseline + profit and estimated avg cost + profit) are ambiguous. You have nothing to go on but some fuzzy math! No wonder so many digital products start out being priced exactly the same as the physical products and work backward from there through sales! Well, there are several reasons for that, but it’s not exactly surprising so many sellers find that a safe and comforting option.

  • SteveWieck

    Great post Fred, Thanks.

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  • vickeya

    Thanks for the article. I’ve been wondering how it has been working for established publishers. Your breakdown of how it is going so far for Evil Hat is really helpful. Thank you for being willing to share figures. That’s much easier for me to relate to than abstract references and general speculation.

    I’m been working on coming up with a marketing strategy for my own company and your take on the PWYW model coincides with my early impressions. It also is helping me to figure out how best I might use the model myself.

    Have a great day!

    Vickey

  • Tom

    re: Stephen Miller – depends on what ecommerce platform the use. I use Gumroad which allows people to pay what they want later, at any point after they download, even if they grab it for free. I’ve had dozens of people pay me more later, up to $50 or $100 for digital goods that they loved…PWYW is incredible.

    Fred – love your thoughts on this. I’m writing a book on PWYW – how it works, how to apply it to your business (physical or digital) your writing, and your art. I believe it actually CAN work as a sales strategy. Some famous examples: Maria Popova of brain pickings, Amanda Palmer, Radiohead, Stephen King (made half a million using PWYW for a novel serialization…that never even finished! talk about a rip off, but still…)

    I say CAN work because, obviously, there are many ways it cannot. But I think if you apply a specific blueprint, there are ways to make it a sales strategy. Louis CK, whild not PWYW, is essentially PWYW because it’s either fork over $5 or download his stuff for free…but the relationships he’s built (like you’ve built) inspire his audience to pay the money – and HAPPILY.

    Fred – I’d LOVE to pick your brain about this. Any chance you’d be interested in doing an interview with me? Written or via phone/skype/audio?

    Let me know!!

    - Tom

    • fredhicks

      All your examples of it working as a sales strategy involve folks who already have an existing, sizable audience. That’s why PWYW does work for Evil Hat as a sales strategy too, but if we’re looking for what PWYW does in general, it’s more of a marketing strategy, getting folks who haven’t heard of you to give your work a shot. That’s where I’m coming from. :)

      Interviews are possible, but difficult to schedule due to… uh, life. :) The Contact Me link is up at the top of the page!

    • Tom

      Fred – shot you a message via Contact Me :)

      Hope to hear from you!

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