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Innovation and Pricing? It’s About Business Models | Pragmatic Pricing

Innovation is about solving customer problems. We sometimes have the chance to innovate using business models. When you hear the phrase “business model” you should think “pricing”.

Netflix changed the business model for renting DVD’s from daily rentals to a monthly fee. They solved the problem that people didn’t want to pay late fees.

In October, 2007, Radiohead (a music group) used “Pay As You Wish” pricing for their album In Rainbows. This solved the problem of prices being too high to attract new listeners, but still collected revenue from their fans.

In 2013, Kid Rock announced he would lower ticket prices and make up that revenue with a share of the concessions. Again, solving the problem of price being too high to attract new fans.

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Innovation and Pricing? It’s About Business Models.

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