They were selling more CDs, but the average price was lower. It's still amazing that they got so much in total sales, but maybe they could have achieved something similar by just lowering the price.

Terry said that the band did this for a while, and soon they were selling about $1200 per night on average, even including those people who took it for free! I think the average selling price was about $10.

I would think that people would pay more because they are involved in a face-to-face transaction. There is peer pressure when you are buying to pay a fair price. In the online world, the human element is missing so I would guess that more people would pay much less to buy the CD than when buying it in person.

And this model does not scale. Derek knows this. I remember him from when I worked at mp3.com -- he is insanely smart and was exceptionally nice. But many things which worked for him do not work as your audience approaches the norm. Not everyone is charitable.

I wonder what the price distribution curve is for this (and for Rainbows)? In particular, were there many outliers who paid an abnormally high amount for a CD, like $200+?