Radiohead has been in the news lately because they decided to offer the digital version of their CD “In Rainbows” for whatever the market would pay. Not surprisingly, many people were willing to download it for nothing. The band has been lauded for its edgy approach at marketing, but until recently there was only secrecy surrounding exactly how successful the venture was for them.
As a test, I went ahead and downloaded the CD, for free, at their website.
And even though Radiohead has denied its accuracy, several sources have reported a study of the effort that estimated the average payment for the CD was $6. And that was just the 38% of the people who now own a copy. In other words, of the people who DID pay something, the average was about 6 bucks. If you figure in the whole group, the average price per album ends up being $3.17. That’s the estimated take of $3.8 million divided by $1.2 million, the estimated number of downloads.
So, Radiohead has $3.8 million dollars. It’s money they didn’t have before and money they didn’t have to share with the record company. Cool. You could consider it a success if you want. I think they probably made some new fans and got a lot of attention that wouldn’t have been there. Plus, they now have a mailing list that’s over 1 million strong. That’s worth something. But, if they had simply set the price at $6, which seems to be the market value, do you think they would have earned more or less? I’m going to say more. I think there’s the chance of lowering the perceived value of a thing when you give it away for free.
I’ve said it before, but I think people expect free. And that’s not good for musicians. It’s even worse for record execs. And people will always be able to get it for free if the REALLY want to. My CD is online for free if you know where to look. I didn’t authorize it and I don’t necessarily condone it, but I think even if I got the site shut down that is hosting or promoting the file, people would just find another host and promotional vehicle. It’s in our nature to find the best deals out there and if we have the choice of legitimately getting something for something or something for nothing, I think most people choose the latter.
This whole thing has really made me consider re-pricing my own CD today.
I’d love to hear what you think.
Popularity: 9% [?]
November 14th, 2007 at 6:11 pm
I’ll second the motion: $6-9 seems a good price for an album - if - IF - IF! - it has more than just a few songs I’m going to like. I guess that iTunes has me conditoned to think in terms of $1/song, give or take.
As to your album, I got in early and bought it from Aimee Street. Paid almost $6 for it, which seemed very reasonable (compared to the usual $10 or $15 most CDs cost these days). I think you got a little of that, but wish it would have benefited you more financially (Aimee St seems to have done well enough, though, eh?).
November 17th, 2007 at 9:58 am
Though I think you’re right when you say people expect (or at least want) free, I’m not one of those people. I believe paying for music I enjoy is a good and fair thing to do. But unless I’m *really* desperate to get my hands on a cd, I won’t pay $15+ for it; I’ll wait until I can find one for less on eBay or something.
I realize when I buy a used cd, I’m not helping the musician(s). I much prefer to buy direct from the artist or through a distributor who’s working for/with the artist.
I might be weird, but sometimes I actually *like* buying music. Anyone who’s bought something at cdbaby.com will agree; there are ways to go beyond a mere transaction and make the process fun.
For me - if I can listen to samples and get a cd I think I’ll like for $10 - $12, shipping included, I’m happy. Would I be happier paying less? That depends. I’ll be honest, if my choices are say, $6 shipped for a used cd vs. $18 shipped for new? I’ll buy used, but I’d still rather go the other route.
If my choices are $6 used and $10 shipped for new, I’ll buy new. Probably I’m not typical; I’m just saying.
And in case you’re wondering, I found my way here via your Twitter page. On Twitter I’m bc aka Radioactive Jam; nice to “meet” you.
November 17th, 2007 at 6:19 pm
Thanks for weighing in, guys, and nice to meet you too, Bill.
I suppose I realize that there are still people adverse to taking a download for free but I’m just trying to discern whether a price point of $10 for a download or $15 for a “real” CD is the right model anymore. Most “art” is scaled in value. Maybe music ought to be as well.