RADIOHEAD: Record Companies or Fans, Which Is Important? November 7, 2007
Posted by Reginald Johnson in Entertainment, Music.add a comment
If a product is worth only what people will pay for it, then what is a digital album worth? Some would say according to Internet research group ComScore, it’s not worth much.
According to a study examining how consumers reacted to Radiohead’s “set your own price” gamble with the digital release of the new album “In Rainbows,” 38% paid an average of $6. Many paid nothing.
Of those who did pay, 17% paid less than $4, 6% paid between $4 - $8, 12% paid between $8 - $12 and 4% paid more.
“This shows pretty conclusively that the majority of music consumers felt that digital recorded music should be free and is not worth paying for,” said Fred Wilson, managing partner of Union Square Ventures. “It’s time to come up with new business models for the freeloader market.”
In the 29 days after the album was made available, the Radiohead site received more than 1.2 million visitors, most to download the album, according to ComScore.
The study also broke down U.S. sales vs. the rest of the world, and found U.S. fans are willing to pay more. Of the users who downloaded the album, 40% paid for it from the U.S. vs. 36% of non-U.S. fans.
A Radiohead spokesperson declined comment on the study.
The That pot of gold at the end of Radiohead’s Rainbows may not be as full as thought.
Still, according to ComScore senior analyst Andrew Lipsman, Radiohead might be onto something.”If [Radiohead] is getting $6 on average, and it’s basically going straight into their pockets and their costs are minimal, it could be economically viable.”
Radiohead essentially needs to make $1.50 per download to break even, Lipsman estimates, so at $6 per buyer, the group still looks to make out pretty well with this innovative and progressive idea.
“The question is: How will new artists be able to use this [pay what you like] model in the future if they haven’t built a fan base in the millions in the years leading up to the release of their album under [this] model?” said Michael Laskow, CEO of TAXI, a leading independent Artist and Repertoire firm.
“It sounds like there will be continuing experimentation with this model,” he added. “But the real question is: Was it worth it for Radiohead, and will there be more bands that experiment with it even without the notoriety they have?”
A rep for Radiohead has previously said the band would release sales figures at the end of the year.
Meanwhile, Radiohead recently signed a deal with British indie label XL Recordings to distribute the In Rainbows CD in stores outside of North America on Dec. 3. The band is also in talks with a separate label for a Stateside release.
The band’s old record company, EMI, meanwhile is trying to get in on the action. The label has announced plans to issue a seven-disc boxed set containing Radiohead’s first six studio albums—from Pablo Honey to Hail to the Thief—as well as the live album I Might Be Wrong and original artwork by longtime collaborator Stanley Donwood for $80.
EMI will also make the catalog available in a limited-edition 4-gigabyte USB stick featuring the band’s bear logo and CD-quality WAV files; it will also be available as a downloadable digital bundle.
Radiohead has confirmed it will kick off a world tour in support of In Rainbows next May. In the meantime, according to the BBC, the rockers are gearing up for their first Webcast in five years on Friday, where they will reportedly talk about the new material and possibly play some songs.
