Radiohead has decided to follow Prince’s lead by trying a new distribution model for their music. The band announced that the new album, In Rainbows, will only be available via Radiohead.com. And the consumer picks the price for the digital download. Time made it sound like “free” was even an option, though another source explains that there is a minimum charge of 1 pence plus a 45 pence credit card processing fee. In dollars, about $0.94, and that’s for the entire album.
The Wall Street Journal calls the move something that will “challenge numerous aspects of established music-industry business models.” Sure, I guess. But music industry business models seem to be challenged in so many ways as it is. I don’t think Radiohead’s move is that significant. And it’s going to be difficult to measure this move in hopes of labeling it a success or failure.
What is success in this case? Number of albums “sold?” Dollar amount of sales? A decent price per unit? Break even point surpassed? Power to the consumer? Another issue: moves like this only get buzz if done by artists who are famous in the first place. So how will this become relevant as a business model for the majority of artists with no money to handle the upfront costs and no fan base to milk via concerts?
Leaving that aside, I am still very interested to see the outcome of this particular experiment, particularly the stats on pricing. Simple economics dictates that the most likely price in this case will be the minimum. But then again, our world is rarely the outcome of simple economics…
Bob,
This is a very interesting experiment, indeed, and the pricing curve ought to be fascinating.
What other artists should take away from this is less the “let the audience set the price” model than the “hey, you don’t need a record label to make money” one. While an established artist like Radiohead no doubt has much better distribution than Joe and His Garage Band-its, the ability to sell digital content (which carries extremely low overhead compared to CD sales) means he can find success that isn’t defined in the ways it has been in the past. Getting a record deal needn’t any longer be the holy grail (especially since so many artists get pretty well shafted by such deals anyway).
I don’t think that this move is terribly significant, either, but it is another visible name setting an example by trying something different (a proof of concept, if you will), which is what it takes to turn the tide.
(One more thing – it is possible to get the download totally free.)
Kevin, some good points… And if the download is available totally free, well, I suspect plenty of people will jump for it at that “price.”
A major catch-22 with their otherwise clever idea is that it’s difficult to pick a price for something before you know your opinion of it. A convoluted solution would be to give away DRM-ed versions of the songs only later to offer DRM-free versions for a made-up price.
Of course, I hate DRM and that suggestion is only given to provide context for others to think of better ideas!
I suppose we don’t get to listen to entire albums before buying as it is right now, but the difference is that here picking the price is the point.
I have to admit that I’d be inclined to pick a higher price if it was after I had a listen (of course, that runs the risk of the price getting lower if the album sucks for me).