A Good Radiohead for Business?
October 1, 2007 1:27 PM
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Radiohead to give away free download of new album
Major political alt-rockers Radiohead have a new album that is brewing a storm of interest due to its unique distribution model. The band will distribute the new album
independent of a major record label from their webpage.
Fans have two options for acquiring the new album. The first is a discbox set containing CDs, heavyweight 12” vinyls, supplementary artwork, extra tracks and booklets. This package costs 40 pounds, about $81.75 U.S., includes an on-line download, and is set to ship by December 3, 2007.
The real head-turner here is option number two: download the album at whatever price you choose. That’s right, customers are given the option to pay anywhere from zero to 99.99 GBP, the latter limited by the size of the price entry field.
The full length MP3 set will be available for download on October 10, 2007 using an activation code e-mailed to customers who choose to “purchase” the download. Customers purchasing the discbox will also be able to download the album on the tenth.
It is hard to say at this point whether this approach will prove to be a competitive business model, but it is certain to generate tremendous interest and accolades from Radiohead’s fans.
It is more difficult than one might think to argue against this model considering the nature of the Web 2.0 economy.
Many of the Internet’s most popular products, Google, Yahoo! Mail and Wikipedia, all give the majority of their content to users for free. Further more the barrier to piracy is so low that most content can be taken for free by anyone willing. Author Chris Anderson, “The Long Tail” is going to explore this topic in his next work, tentatively called “
Free: The Past and Future of a Radical Price
So what we have here is an outline of a business model for the “Brave Free World.” Embrace the fee-free zeitgeist of the web. Decriminalize the consumers who won’t pay for content. Maximize your profit by capturing the most wealthy few percentile of customers by maximizing their exposure to your core product.
In this case the core product is Radiohead, not the album. Giving away the album should greatly broaden its distribution and the exposure of wealthy consumers. They will capture the wealth of this upper crust through high value packages like the discbox, world tours, and who knows what other cool things that are worth paying for.
The only piece of the Web 2.0 business model that Radiohead’s plan is missing is embedded advertising. Given the band’s philosophies, I don’t think we will be seeing this anytime soon.
I know everyone is wondering, so I did some research and yes, entering zero for price really does work. This is not the worst thing that could happen to the band since I will pay for concert tickets to see the band, as I have before, and if the album knocks my socks off I will also pay for a hard copy of the CD.
This article is over a month old, voting and posting comments is disabled
10/1/2007 6:49:45 PM
Most of the money gained by selling CDs already goes to the labels anyway, so by cutting out the middleman and appealing directly to the fans I wouldn't be surprised if they end up making more money this way. Especially since a lot of the people who pirate instead of paying $20 may be willing to throw in a buck or two if given the choice.
"Paying an extra $500 for a computer in this environment -- same piece of hardware -- paying $500 more to get a logo on it? I think that's a more challenging proposition for the average person than it used to be." -- Steve Ballmer
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