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Monday, Oct. 1, 2007 at 4:14 pm

Radiohead Lets Fans Choose How Much to Pay for Album

By Robert Gorell
October 1st, 2007

Remember when people thought Prince was crazy for selling his music exclusively online?* Or the time when William Morris Agency Worldwide Head of International Music Ed Bicknell scoffed at me for asking why any band in its right marketing mind needs a major label? Well, it looks like Radiohead is putting its money where your mouse is.

Arguably the most influential band of the past 15 years, Radiohead has decided to release its next album online. But here’s catch: You choose what to pay.**

According to Time Magazine:

The ramifications of Radiohead’s pay-what-you-want experiment will take time to sort out, but for established artists at least, turning what was once their highest value asset — a much buzzed-about new album — into a loss leader may be the wave of the future. Even under the most lucrative record deals, the ones reserved for repeat, multi-platinum superstars, the artists can end up with less than 30% of overall sales revenue (which often is then split among several band members). Meanwhile, as record sales decline, the concert business is booming. In July, Prince gave away his album 3121 for free in the U.K. through the downmarket Mail on Sunday newspaper. At first he was ridiculed. Then he announced 21 consecutive London concert dates — and sold out every one of them.

Now that’s confidence. In fact, that’s the point. Just like countless bestselling book authors who make most of their money from speaking engagements and new business, musicians generally make more from live performances than they do albums.

Besides, isn’t it time to stick it to the major labels? On his Lefsetz Letter blog, Bob “the most feared man in music biz criticism” Lefsetz had this [expletive deleted] to say:

It’s not like Radiohead’s living in a different world. But they’re playing by a different rule book. One that says the money flows from the music, that people have to believe in you, that you’ve got to treat them right.

[expletive deleted], you can barely get a ticket to a Radiohead show. The venues aren’t big and the demand is incredible. They’re doing it all wrong, don’t they see??

Well, obviously they don’t.

This is big news. This says the major labels are [expletive deleted]. Untrustworthy with a worthless business model. Radiohead doesn’t seem to care if the music is free. Not that they believe it will be. Because believers will give you ALL THEIR MONEY!

This is the industry’s worst nightmare. Superstar band, THE superstar band, forging ahead by its own wits. Proving that others can too. And they will.

Amen, brother.

A longtime Radiohead fan myself, I intend to pre-order In Rainbows at full iTunes (over)price, right after I convert £’s to $’s — which, the exchange rate being what it is, I reckon will be more painful than actually spending the money. Oh, and if anyone from the band is reading this, I just want you to know that I downloaded Hail to the Thief for free. It won’t happen again.

If you’re still wondering what a band like Radiohead can teach you about creating win-wins for you and your customers fans, perhaps it’s time to revisit “The ROI of Free“.

[*Author's Note: Whether you still think Prince is nuts for changing his name to that bizarre symbol icon in the 90's is another story. But, hey, he made more money on a song called "Let's Go Crazy" than most of us will make in our lives, so who are we to judge?]

[**Unless you forgo the download and buy the delux box set version -- limited edition vinyl, posters, goodies, etc. -- only available from the Radiohead website.]

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Comments (5)

  1. I saw this last night. I am a huge radiohead fan and so are my friends. I think I will pay 7 pounds (about $15 USD) just to support them and thank them for making such awesome music. More artists should do this.

    I am also planning on buying the box set in case you were curious.

  2. This is an excellent post, and it nails the new dynamics for a would with no need for record labels.

    >>Whether you still think Prince is nuts for changing his name to that bizarre symbol icon in the 90′s is another story.

    Prince did that to escape his Warner Brothers recording contract. It was the ballsiest legal move I’ve ever witnessed.

  3. Exactly. And he was mocked for it, even though he was the one mocking Warner Brothers.

    Artists can drive markets and work loopholes businesses don’t even know exist. When a company changes its name to, say, Cingular, then buys itself back a few years later, it’s considered “re-branding”. When Prince did it, people said he was throwing away his career. Yet he’s the only multi-platinum artist who’s been selling exclusively online for years — so a Gold record in online sales does far more for him than a multi-platinum record with Warner Brothers. What happened? Did he become a forgotten American pop star? Last year’s Super Bowl committee didn’t seem to think so.

    Besides, something tells me “the new AT&T” may not garner as much brand affinity as “the artist currently known as the artist we’re currently talking about.”

    Napster’s a great example. They major labels didn’t have the vision for how to monetize Napster. And just as Napster was about to show them the way (pre-iTunes Store), it was squashed. Now, Universal Music has even backed away from iTunes because THEY want to set their own prices — and that’s great. Perhaps the irony of Radiohead doing the same won’t be lost on the majors (or iTunes).

  4. [...] P.S. I don’t seem to be the only blogger guiltily trying to make up for past misdeeds… [...]

  5. [...] band announced they would release their new album online — through their own shopping cart, letting people pay whatever they like — Radiohead was widely praised by media and fans alike. The move was hugely disruptive [...]

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