Is Pay What You Want a Viable Business Model?

By Jake • December 28th, 2010 • 2 Comments

Interesting to ponder the newish pay what you want model, which is pretty much a remix of shareware.

Pay What You Want — a Sustainable Business Model? – Slashdot

Radiohead tried this same model with their album In Rainbows back in 2007 with mixed results. I’d argue that software and music have much different perceived price points, which dramatically affect the success/failure of the PWYW model.

Still, with tweaks like adding a range of pricing or tiering what you get, could the model see long-term success?


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  • rock

    I love PWYW for mature software. Sunk costs are recovered and the ongoing income covers basic distributing and overhead expenses. However PWYW, like Shareware before it, does not cover ongoing operating costs (or future R&D for that matter) for any but the most wildly successful products (call it the top 5%). IMO, PWYW must be backed up with a paid support model to increase the profitability of operations above 50%.

  • http://theappslab.com Jake

    Agreed, very good points about how to apply the model. I suppose you could roll the two in together, i.e. PWYW first, get a matching level of support. Call it GWYPF, get what you you paid for :)