Results of Radiohead Experiment: 38% of Downloaders Pay an Average of $6

RadioheadAbout a month ago, we mentioned Radiohead’s social experiment of offering fans a choose-your-own-price way for downloading the band’s latest album (with the option of free). As I had mentioned, simple economics dictates that the most likely price in this case will be the minimum. And I was right, sort of.

Only 38% of downloaders paid something while the 62% majority paid nothing. Globally, the average price paid was $6; the average in the U.S. was around $8. But those numbers ignore the freeloaders. Including the “no pay” crowd, the average price was around $2.26 globally and $3.23 in the U.S. Of those who did pay something, 17% paid below $4 (the most common category) but 12% paid between $8 and $12, a price in line with iTunes or Amazon.

Was it a success? Yes and no, depending on how you look at it.

Success is difficult to quantify, as it means different outcomes to different people. Number of albums “sold?” Dollar amount of sales? Image build up before a tour? Break even point surpassed? Power to the consumer?

While the study proves that most of us are cheapskates and freeloaders, Radiohead still did make over $2 for every album downloaded. That’s much higher than what record labels might normally pay back to artists. And the band’s site had over 1.2 million visitors in October alone. But the catch-22 is that a strategy like this is likely only to get buzz if done by artists who are famous in the first place.

While I’d brand it a success for Radiohead, I think it’s a bit of a stretch to assume it’s relevant as a business model for the majority of artists. As much as I love the mix of lower prices and power to the consumer, I’m skeptical as to the sustainability.

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