No surprises as 60 percent download Radiohead album for free

happygeek 0 Tallied Votes 799 Views Share

Radiohead are a band which does not need to prove anything to anyone. Their seminal album 'OK Computer' is consistently voted one of the greatest recordings of all time, be it the critics or mere mortal music fans putting the crosses in the boxes. Which is perhaps why the latest Radiohead album 'In Rainbows' has not been made available through the usual channels, but rather the group have bucked the trend and challenged the music industry by making it available for free download instead.

It was not meant to be quite that simple, of course. The distribution and sales model followed by Radiohead was one of pay what you think it is worth. The consumer is asked to determine how much they want to pay for the album and can then download it for that cost, even if the value placed upon the recording is a big fat zero. The real die-hard fans can cough up the big bucks, $80 to be precise, and order a vinyl copy, a bonus CD plus assorted band goodies in a package called the Discbox if they so wish.

So, anyone fancy hazarding a guess as to what most people chose to pay for In Rainbows, according to comScore which has used its 2 million strong web user database to monitor the situation? Yep, you got it, a big fat zero.

comScore reckon that 3 out of every 5 downloaders opted for the free music thank you very much, with only 2 out of 5 making a payment of any kind. And how much did the decent 40 percent contribute to the Radiohead coffers? The average was just $6 comScore report.

Apparently, during the first 29 days of October, 1.2 million people worldwide visited the In Rainbows site, with a significant percentage of visitors ultimately downloading the album. "I am surprised by the number of freeloaders," said Fred Wilson, managing partner of Union Square Ventures and well-known music aficionado. "The stories to date about the In Rainbows 'pick your price' download offer have been much more optimistic. I paid $5 U.S. and had no reluctance whatsoever to take out my card and pay. It's a fantastic record, the best thing they've done in years. But, this shows pretty conclusively that the majority of music consumers feel that digital recorded music should be free and is not worth paying for. That's a large group that can't be ignored and it's time to come up with new business models to serve the freeloader market."

Of those who were willing to pay, the largest percentage (17 percent) paid less than $4. However, a significant percentage (12 percent) were willing to pay between $8-$12, or approximately the cost to download a typical album via iTunes, and these consumers accounted for more than half (52 percent) of all sales in dollars.

"The high percentage of users actually paying more than a few dollars for this download is actually pretty impressive," said Jim Larrison, general manager of corporate development at Adify, a provider of online ad network services. "I expected the vast majority of users to download the album for free or at most a few dollars. With 40 percent of consumers willing to pony up real money, this is a true win for the music industry as it shows there is still perceived value in the digital form of entertainment. Of course it does suggest that the marketplace is continuing to migrate and the music industry needs to shift with consumer behavior. There are numerous methods to monetize the music, via shows and concerts, merchandising and box sets, commercial licensing, and even advertising; which is where the industry needs to progress towards, as the 40 percent paying for music might not be sustainable."

"It is important to note that Radiohead has single-handedly accomplished a milestone that the recording industry has failed to achieve -- they've eliminated much of the profit attrition related to piracy or illegal copying," said Edward Hunter, comScore analyst and part-time songwriter. "Moreover, they have garnered good faith with the music consumer at a time when it's all the rage to bash the industry and the artists who ally themselves with it. And then you have the reduction in cost of sale, cost of promotion and production. I'd call this a resounding success for Radiohead and music fans everywhere -- and a fantastic artistic effort as well."

kennys 0 Newbie Poster

From my point of view, finding that 40% chose to pay rather than take the music for free is very impressive, particularly when we consider the high likelihood that many (perhaps most) of those that went to the site had some experience using the 100% free, file sharing services over the last few years. I think that the average price paid of $6 should also be regarded as a substantial enough to consider this a rousing success.

Radiohead had no disk manufacturing costs for the digital download sales, no inventory to manage and the electronic distribution and we marketing costs were a tiny fraction of the high costs involved in getting a CD manufactured, shipped out to stores around the world and marketed far and wide. If Radiohead also bypassed the uber-greedy record labels and went directly to their fans with this album, there's a very good chance that they'll make more money with this pay-what-you-want digital distribution model than they will from higher (fixed) priced CDs and downloads.

Also, the data that showed that a relatively smaller percentage of buyers accounted for a disproportional percentage of the total money paid is a very interesting and a welcome sign (to me anyway) of commercial and consumer sanity: the people that could afford to pay more did just that and the fact that there were others who were either stingier or poorer getting the same product for less or free didn't deter those that had the extra bucks from making what they felt was the better choice to pay more. IMO, this venture by Radiohead may send some long lasting shock waves through the music business.

lasher511 185 Veteran Poster

That means that they have made about $2.88 million in the time that the album has been released from 1.2 million downloads. Usually an artist will not see any money at all until the album sells 1 million copies and even then your only looking at 50c per album sold after that at most. If this had been released in the regular way then they would have only made about $100000.

owlowl076 0 Newbie Poster

Hello! I really liked your story. Thank you!

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