How Much Does Amanda Palmer Trust Her Fans?

A new TED talk was put out today (though it won’t be today anymore by the time you read this) by Amanda Palmer entitled, “The Art of Asking”, which you can watch here. If the comments on the YouTube page of the talk are to be believed, it truly was an inspiring affair. Professional cynic that I am, the talk didn’t do much to inspire me; at least not in the way that Amanda probably intended it to. Now, for those of who you don’t know her, Amanda is (primarily, I think) famous for her music in The Dresden Dolls. One of the main thrusts of her talk centers around the question she poses towards the end: how do we let people pay for music, rather than how do we get people to pay for music. Part of Amanda’s answer to this question was to allow people to download her music on her website and let them pay whatever price they wanted for the download. So, if someone downloaded Amanda’s music from her site, they had the option of paying $0, $1, $5, $10, $15, $20, or $100 for it. Amanda further suggests that she views this as a sort of “trust” in her fans, presumably because she had given people the option of paying nothing, which is the option most economists would consider the “rational” one. While her talk is delivered with a strong emotional tone and the message is ostensibly positive, Amanda is still a human, so my guess is that there’s more to her trust than meets the eye.

And more than meets the shaved-off eyebrows as well

Admittedly, I don’t know much about Amanda beyond what I just heard. Though I am familiar with her music to some degree, I’ve never followed her personal life at all. Here’s what I do know: a quick browsing of her website shows me that while she will indeed allow people to choose their own price for her music and download it, she doesn’t seem to have that same policy towards shirts, CDs, vinyl, posters, art books, or the shipping and handling required to send any of them out. Something (the tour section of her website) also tells me the venues she plays at – which I’m imagining represent a substantial proportion of her income – don’t allow anyone to come in to see the show and pay whatever they feel like for tickets. It would seem that telling people, rather than asking them, to pay is the norm; not her exception. This raises the inevitably question: to what extent does the choose-your-own-price option reflect a genuine leap of faith, and how much of her TED talk is actually cheap talk?

Cheap talk is just what it sounds like: it’s a signal that is easy to produce. Like all signals, it functions to attempt and persuade another individual to change their behavior. Cheap talk, however, is of very questionable value precisely because it’s so easy to manufacture. For instance, let’s say that a man tries to convince a woman at a bar to have sex with him. He tells her that he’s fabulously wealthy, will remain faithful to her throughout his life, and see to it that she wants for nothing if she agrees. Tempting offer no doubt, but what’s guaranteeing that any of the information that the man is sending is true? It costs the man almost nothing to say the words, and once the two have sex, he’s free to go back on his word without penalty. However, if that same offer is made after a month of courtship where the man has paid for multiple dates, consistently dressed in expensive clothes, and accompanies the offer with a diamond ring, wedding ceremony, and legal contract that entitles the woman to half of everything he owns, we’ve stepped out the realm of cheap talk into costly signals. Because of those high costs, the signal is much harder to fake, so its honesty can be better guaranteed.

Now Amanda would like us to think that her choose-your-own-price option represents a costly signal of trust towards her fans. Indeed, she may well consciously believe that it is one, just as most people consciously believe they’re better than average at things that the majority of other people or less likely to have bad things happen to them. Since her personal, potentially self-serving feelings about the whole thing don’t necessarily reflect reality, this brings us back to the “how costly is her gesture?” question. As the internet stands right now, whether a musician provides the option for free downloading on their own website or not, the option likely exists somewhere. It took me all of three seconds to find a list of websites where I could have downloaded Amanda’s album for free anyway. In other words, if someone wanted to download her album without paying, they likely could have. This suggests that her pay-nothing option isn’t as trusting as it initially comes across. Not only is she not creating that option where it didn’t exist before, but, in all likelihood, it would exist regardless of whether she wanted it to or not. Counting this as “trust” is a bit like my saying that I “trust” gravity to do what it does; I don’t really have a choice in the matter.

Physics has yet to disappoint

On top of that preexisting problem of music downloads already being available, there’s another: to the best of my knowledge, the costs to letting someone download her album are minimal. While one could argue about how much money she would lose on account of people not paying, I’m talking more about the physical costs of sending the information to someone’s computer. Since there really is no cost there – and because the option to download for free would exist with or without Amanda’s seal of approval – Amanda is essentially undertaking zero risk in providing her ostensibly-trusting option. It requires no investment and no need for desire. Without that risk, assessing the credibility of the signal becomes very difficult, as was the case with the sex example above. How trusting would Amanda be when there are some actual risks involved? When she has the ability to create that trusting option, will she? This is where Amanda’s other merchandise comes to the rescue.

Things like shirts, posters, and physical copies of CDs cost actual money to produce, and the option to get these things for free doesn’t already exist. Nothing is stopping Amanda from paying out of pocket to have these items made and allowing her fans to pay whatever they want for them (from $0 a shirt a $100, for instance), yet this isn’t what she does. Once actual risk enters the picture – once Amanda needs to make a real initial investment – her trust sees to dry up in a hurry. Apparently, she doesn’t trust her fans enough to adequately compensate her on a shirt and the shipping cost when she has the option to. One could argue, I suppose, that a handful of amoral people could, in principle, ruin her financially by ordering dozens or hundreds of shirts from her for free online, and that same risk isn’t posed by the downloading of a CD. That would be a fair point, except there are multiple ways around it: the requirement of a credit card for the purchase (whatever the purchase price ended up being), a limit on the number of free or cheap items, or the option available to pay whatever you want for the merchandise, but only at live concerts. Admittedly, I don’t know if she does the last one; I just suspect she doesn’t offer it as default option.

Forgetting about the merchandise, we could also discuss ticket prices to the shows as well. A quick browsing of the links for tickets on her tour schedule shows tickets that can range from $15 to $60. Now of course ticket prices aren’t being set by Amanda herself, but, then again, venues aren’t set in stone either. Presumably Amanda could, if she wanted to, only schedule herself to play at venues where ticket prices could be determined (at least largely) by the willingness of the people who show up to pay. I’m sure there are plenty of venues – though not necessarily traditional ones – that would at least consider such an offer. Rather than take this approach, however, Amanda’s “art of asking” seems to involve first demanding people pay full price for tickets and merchandise and, in addition, asking them to then pay more, whether that more came in the form of additional money placed into a hat she passes around the crowd, giving her food, places to stay, practice space, or other items of interest.

“How can we let people pay $7 for a cup of coffee and then let them pay us even more?”

Now none of this is to say that Amanda is a bad person. As I said, I don’t know nearly enough about her to make that judgment one way or the other. This is merely to point out that the “trust” Amanda has in her fans certainly has its limits – many of them – as pretty much anyone’s does. That’s just the point though; there doesn’t seem to be anything particularly special going on here. Despite there being nothing special about it, Amanda seems to be trying to play it off as if it’s some great exercise in trust. The impossible-to-assess pretense is the part of the talk that inspired this post. There’s also the matter of the kickstarter she mentions. Amanda asked for $100,000 on kickstarter and ended up making over a million. Now I don’t find anything particularly egregious about that; if her fans wanted to support her, nothing was stopping them. What I did find curious, though, what her analysis of how that money would be spent. It seemed that she had a legitimate need for almost the full million. While that’s fine if she does, what’s curious about that was is if she needed the full million, why didn’t she ask for, well, the full million? Why only ask for the hundred thousand that clearly would have been grossly insufficient for her plans? Something about that analysis strikes me as off as well. Then again, if a pretense of trust is easy to manufacture, so is a pretense of need.

4 comments on “How Much Does Amanda Palmer Trust Her Fans?

  1. Esmertina on said:

    You make some interesting and valid points. And I totally understand the skepticism. As a longtime fan of Amanda’s, you get used to the magic she is able to create for her fans, and you forget how improbable and rare it is until you read something like this and remember how skeptical you used to be yourself.

    I think the distinction between the fee structures of her music and her merchandise is this: Where she is able to eliminate the middleman, she does. Where she can’t, she is subject to structures that are not entirely in her control, and she can’t always do business the way she would prefer to.

    Amanda’s site no longer links to, which had long been her outlet not only for merchandise but for experimentation in e-commerce. (I’m not sure what its current status is, I know late last year she was looking at changing fulfillment houses because she wasn’t happy with the shipping and handling costs.) At least 3 times that I know of, and probably many more that I missed, inside jokes erupted on Amanda’s twitter feed that resulted in someone designing a t-shirt, which Amanda then cobranded and sold for the artist in super limited editions that sold out in a few hours (thus avoiding the overhead of warehousing). I am lucky enough t oown one, and devastated that I spilled spaghetti on it. But anyway. She also experimented for a while with allowing fans to create their own Amanda-inspired jewelry and art items to sell to each other on postwartrade.

    So while it’s a valid point that the business model of trust comes to a hard stop where physical merchandise with lots of overhead is involved, Amanda does look for better solutions here, and uses the e-commerce part of her business to continue her mission of creating a multidirectional community with her fans.

    The other thing I wanted to mention is the Kickstarter expenses. Apart from the $250k in expenses coming into the Kickstarter, the remaining expenses are on a sliding scale with the revenue that the Kickstarter would generate. The materials cost of all the amazing high-end limited edition CD-cases (which were actually 4-color books … so beautiful), the cost of the record players, etc. Since her explanation is based on what seemed then to be the wildly optimistic scenario of hitting the million dollar mark, the expenses she describes are the cost of fulfilling all the rewards at that level — they are not fixed costs that would have left her horribly in debt had she not hit it. You could ask, why didn’t she set her goal at $250k if that’s what she needed just to break even, and I think based on Amanda’s history with Kickstarter she had consistently made at least 2.5 times what she asked for. Setting the goal lower is more fair to the fans if the Kickstarter does NOT reach its goal, because in that case they get nothing.

    On an evolutionary-psychology-related note, I think this Northwestern study about the effects of trust on relationships is relevant here: Just as in romantic relationships, trust between artists and fans makes us a little bit delusional in the best possible way, which is the essential underpinning of loyalty. She works hard to achieve and deserve that trust, and it pays off for her with a cadre of loyal fans who are eager to support her.

    I think the more familiarity you get with Amanda the more you’d realize how authentic she is. But regardless, I do think you raise interesting points about the scalability of her business model to sales of physical goods.

    • Jesse Marczyk on said:

      My point is less about there being a middle-man and more about Amanda’s trust in her fans. Even if there is a middle-man, in the case of clothing, Amanda could still, it seems, trust her fans enough to compensate her for that fact. She might not be able to do business with the middle-man as she would prefer, but she can certainly do business with her fans however she sees fit. In such a situation, where Amanda is taking an initial loss, how much she trusts her fans is easier to assess because the investment is costly.

      As for the Kickstarter, yes, a certain proportion of how much she makes goes back out to the promised services she said that others would get for their donation. Presumably, however, she was taking that into account when she was asking for the money in the first place. So what she asked for ($100,000) is not what she would ultimately get (say she’d only end up with $50,000 after what she promised for the donations). That, it seems, makes her request seem even more ludicrously low-balled. Using that half-of-what-she-got estimate, Amanda would have been able to pay off a collective fifth of her debt. This, to me, would seem to suggest that paying off said debt was never what Amanda initially intended to do with the money (though, admittedly, I can’t find her stated intentions for the money anywhere. If you could direct me towards them, I’d like to see). From that, there’s really no way around the conclusion that she was making up additional uses for the money she received only after she had received it.

      Phrasing it as “setting the goal lower so her fans get something out of it” is another positive spin on the issue that, like her TED talk, may have very little to do with her initial motivations. That’s the problem with cheap talk: it’s basically impossible to assess.

  2. I liked your approach of looking at the talk itself and the distribution of goods as a costly signaling game. However, by focusing only on the contrast of music to merchandise, I feel you miss many of the settings where she really does show genuine trust: crowdsurfing, couchsurfing, and letting your fans paint on your body are all shows of trust. Of course, this is trust that is localized to a few individuals, but that is consistent with predictions from evolutionary game theory that a setting with fewer participants promotes cooperation.

    For the case of paying for concerts: she does impromptu free shows (as she shows in the TED talk and as you can find by hunting around youtube) and for the case of larger concerts, she is responsible not only for herself, but also her band, venue-host, backstage-folks, etc… she cannot assume that all these contacts are also willing to extend their trust to her fans. Of course, you could argue that she could just front all the venue costs herself, but then you are being very unreasonable, in your analogy: you are a girl that is asking for a diamond ring before we even had a drink.

    This brings me to your final point of merchandise. Here, I think your point is valid, she is not willing to trust the internet arbitrarily. However, as you also noted (with the malignant users), this is not a matter of trusting only fans, this is a question of trusting the whole internet. In the case of distributing music, it only has value to her fans and thus the trust is between herself and her fans. In the case of t-shirts, they have more value to her fans, but they still have a certain base value to everyone (including not her fans). A free t-shirt is a free t-shirt even if it has some band you don’t know on it. Is it strange of her only to trust her fans and not the whole internet at large?

    • Jesse Marczyk on said:

      If the costs to her ostensible trust involve almost nothing (sending someone a digital download, crowd-surfing, or body painting) to her getting things (like places to stay), I find it hard to assess. Her fronting the costs for these things seem no more unreasonable than the woman in my example requiring that the man demonstrate his abilities first in the form of dates, dress, or investment before he gets what he’s after to find out if the man’s signal is credible. The issue is not that she definitely doesn’t trust her fans, but that there’s no way to assess the depths of it; certainly nothing TED-talk worthy, as far as I can see. It’s not as if she’s presenting some new idea; she’s just making the best of the download situation that she can and then asking or begging people for money, items, or nearly-free tour support, depending on what phrasing you’d like to use. Her TED idea is basically a tip jar or, perhaps more aptly, a guy sitting in the subway with an open guitar case, playing for passer-bys. If anything, the open guitar case, tip jar, and asking all create the expectation that you ought to be giving money to this person where none existed before. It’s not a bad marketing strategy, but that’s about it…

      While I did note that a few people could potentially take advantage of her free merchandise, I also mentioned there were several ways around it. Here’s another: as it is, I’m sure she still makes a profit off selling shirts, CDs, Vinyl, etc. She could, I presume, lower the price to the point where she was making $0 per sale and then trust her fans to support her with the rest. If she wants to do something a bit more impressive like that and still succeed – nay, thrive – because of it, she’s more than welcome to. That would make for a better talk. By the sounds of her $250,000 debt, though, she clearly hadn’t been thriving up to that point, and she wasn’t even being terribly risky in her trusting.