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.
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10/2/2007 2:23:24 PM
Radiohead offers new album online, allows consumers to decide price
A very successful touring band with over 10 million albums sold, all of which it owes entirely to the 'old' business model (representing those corporate interests against which their political music loved to rail), decides it can well-afford to experiment with a new business model that lets consumers decide whether to pay (or not) thanks to the millions of dollars and fame it already made on the 'old' business model, and in doing so, tells not-yet-known bands its too bad for them that they were born 10 years too late.
It is indeed a brilliant marketing plan. How do you get people to actually buy your music? You don't! Give the music away [ostensibly] for nothing, hitching your [marketing] wagon to a wave of anti-RIAA sentiment, and all the lemmings will want to reward you by paying $80 for a nifty merchandizing fan-pack.
Totally self-serving, devilishly manipulative, and completely contrary to the band's perceived 'altuistic' or 'common good' political pretenses, but brilliant.
Reminds me of when Justin Frankel decried AOL for being so profit-minded and that, as a new shareholder, he wanted AOL to be a more charitable corporate citizen...
Frankel got his $50 million from AOL, of course. lol!
i.e. "OK, I've got my $50 million, now I want the company to be kinder, gentler, and less profit minded."
I guess Frankel overlooked that AOL had already performed one of the most charitable gestures in corporate history - paying many times more for Nullsoft than it was worth (irrational exuberance being a sign of those times and all).
10/2/2007 2:59:18 PM
You need to keep in mind two things, though.
1.) A distribution method like this wouldn't have been possible 10 years ago. Even
Radiohead had wanted to do something like this, how would they go about it? Send you the CD for free and then ask you to send back some cash if you like it? No sir, that wouldn't work at all. Only with the recent boom of a digital distribution of music would this be possible.
2.) Radiohead isn't the first band to do this. One example that comes to mind is of the indie progressive metal band, the pax cecilia. They had a similar distribution method. You could download their album for free or give like a $10 donation, or you could order their CD for a slightly higher fee. Nobody made any fuss about this because, well, nobody has heard of the pax cecilia. In order for a distribution method like this to become accepted it'll take a well known name like Radiohead (that has presence in the market and an established fanbase) to push it forward.
Saying that this is Radiohead's way of saying sorry to new indies bands is just a little unfair, especially since I think this distribution method could be more profitable for bands than the old one.
"Intel is investing heavily (think gazillions of dollars and bazillions of engineering man hours) in resources to create an Intel host controllers spec in order to speed time to market of the USB 3.0 technology." -- Intel blogger Nick Knupffer
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