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 2:59:18 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.
"Nowadays you can buy a CPU cheaper than the CPU fan." -- Unnamed AMD executive
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