Rich Fiscus
9 Jan 2008 21:08
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