Since Radiohead's pay-what-you-want release of "In Rainbows" in 2007, allowing fans to name their price has been an increasingly popular tactic and one occasionally - and unrealistically - trumpeted as the future of music distribution.

Some restaurants took to the pay-what-you-want model, too. Now a café in St. Louis run by Panera Bread is asking customers to "take what you need, leave your fair share" in lockboxes, reports The New York Times. But as Times points out, some that experimented with the pay-what-you-want model are either out of business or back to charging fixed rates.

The phone at the Java Street Cafe in Kettering, Ohio, which last year embraced the pay-what-you-want strategy, has been disconnected, and it appears to have closed.

And Tierra Sana in Queens folded - though it offered customers a pay-what-you-want option only one day a week.

The Terra Bite Lounge, a cafe in Kirkland, Wash., operated as a pay-what-you-want restaurant for a year or so. But Ervin Peretz, its owner and a lead technical designer at Google, said the cafe now charges for its meals. He said he dropped the model in part because of issues particular to its location - it is in a neighborhood popular with teenagers.

Founded in 2003, One World Everybody Eats in Salt Lake City is one of the oldest pay-what-you-want restaurants, and like Mr. Peretz, its operators have found the concept a bit challenging. It is now owned by a nonprofit group and suggests customers pay a small amount, say, $4 for a meat or fish entree.

"I used to let people put their money in a basket and make their own change, but then I went to a lockbox," said Denise Cerreta, the cafe's founder. "You learn how to cut down on the people who will take advantage of the concept."


Fortunately for artists and labels, digital music comes with a near-zero cost of reproduction. That means digital music freeloaders aren't taking away a unit that could have been purchased by another customers. A restaurant has finite supply and definite costs, so a freeloader takes food that may have otherwise been eaten by a paying customer.

But Cerreta's lesson could be good advice for artists and labels. Some people may give generously when able to name their price. Others will be more stingy. The best model is one that embraces both groups of people.

Some restaurants allow non-payers to sign up and volunteer their time - basically pay for the food by donating their labor. The same approach can be taken with digital music. Already, services exist to offer a free track in exchange for a tweet or spreading the word to friends through email.

Questions? Comments? Let us know: @billboardbiz

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