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Radiohead's new CD becomes #1 hit despite free downloads

Written by Rich Fiscus (Google+) @ 09 Jan 2008 21:08 User comments (6)

Radiohead's new CD becomes #1 hit despite free downloads Apparently Radiohead's marketing strategy of giving their latest CD, 'In Rainbows' away first in MP3 format, with fans having the option to pay if they wanted to, didn't have quite the effect on sales that many have predicted. The album was number 1 on the U.S POP charts during its first week of release.
In November internet commerce analysts at ComScore announced that according to a sampling of consumers running their tracking software on their computers the band only made $6 per album with more than 60% of downloaders declining to pay anything. A subsequent statement from Radiohead called the ComScore numbers "wholly inaccurate," noting that no one outside their organization had access to the actual numbers.

Many are asking whether the band would have made more money by renewing their contract with former label EMI and releasing the album in the traditional way, with downloads sold through online stores like iTunes. But is that the right question? The CD market that they lead right now is down nearly 4% from last year. Last year's numbers were nothing to brag about either, being down 15% for the year.

Radiohead may not have found the next mainstream distribution model, but they did essentially put up their own money (or at least potential revenue from CD and download sales) to test the waters for themselves. By contrast, the recording industry is spending their time complaining about media player manufacturers like Apple making money they say is purely due to their content.

Creating a new business model for the entertainment industry is their own responsibility, but they spend a lot of time talking about how other people have a responsibility to pay them enough to justify particular distribution models. In any other industry you would assume they'd simply adapt to the new online marketplace.

Rather than leading the way and developing innovative delivery channels they've been dragged kicking and screaming, first into online sales and then into dropping DRM. Now many in the industry are proposing that media player manufacturers bear an ongoing subscription cost for every piece of hardware sold to ensure the labels' income.

Radiohead, on the other hand, took a chance that they wouldn't make anything from their fans, while cannibalizing the market for the CD. It's hard to believe that bands with smaller fanbases would fare as well, but it's also hard to believe that they had any chance to sell the CD to all the people who didn't pay for the download.

I can say for sure that there's at least one person out there who downloaded the album, and has listened to some Radiohead tracks that he wouldn't have bought on CD. They may not have gotten any of my money, but they got the chance to put their music on my stereo at least a couple of times.

Source: Reuters

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6 user comments

19.1.2008 22:23

Their music wasn't exactly my cup of earl gray (pun intended), but I commend them for taking a chance. To bad they no longer have their cd availible for download.

29.1.2008 22:57
jab1981
Inactive

First, I'm a huge fan of the band. I pre-ordered the $80 disc box from the site and was given a free download while I waited. I then purchased the retail disc in stores when it was released. They simply make great timeless music, certainly not for everyone but perfect for those looking for a little more with their music. This album is one of the best they've done and already ranks as one of my personal top albums of all time.

That said, I don't think this really proves what this site wants it to prove. The album was number 1 on a slow week. It sold just over 100,000 copies (25% were iTunes downloads)... the last album which received less favorable reviews and not nearly as much press sold roughly three times that amount without iTunes. While I'm sure the band made more money on the "pay what you want" downloads than they ordinarily did under their old contracts at EMI, this didn't exactly prove that giving something away for what could be potentially free helps your sales. It actually seems that this release cost them over half of their physical sales.

And I should add, for 21Q, though you aren't a fan if you were looking for downloads they are now on the iTunes store as higher quality mp3s. Now you just can't get it for free.

310.1.2008 12:10

They probably could have gotten more sales with a better distribution strategy. Let the fans listen to the music first, then decide how much they want to pay. I'd hate to have paid a lot for something that might suck.

410.1.2008 12:14

Originally posted by jab1981:
That said, I don't think this really proves what this site wants it to prove. The album was number 1 on a slow week. It sold just over 100,000 copies (25% were iTunes downloads)... the last album which received less favorable reviews and not nearly as much press sold roughly three times that amount without iTunes. While I'm sure the band made more money on the "pay what you want" downloads than they ordinarily did under their old contracts at EMI, this didn't exactly prove that giving something away for what could be potentially free helps your sales. It actually seems that this release cost them over half of their physical sales.
If they actually made more money by releasing less physical media, then they made a great point. Fans got what they wanted and paid what they thought was good. I'm a huge Radiohead fan, but this album was definitely one of my least favorite of theirs. OK Computer and Hail to the Thief reign supreme in my CD collection. But I gave them a few $$$ for the download for the few songs that I did like.
This message has been edited since its posting. Latest edit was made on 10 Jan 2008 @ 12:25

510.1.2008 14:34

Now THAT will get get the attention of the record labels!

611.1.2008 18:51

They probably make more money through the record label but i think this was more to see what the percentage of their fan base would be. It could also just be a freebie to see how many people they could get and then the album after this one they would charge for and then see what numbers come once again.

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