Listener Determined Download Prices?

Monday, October 01, 2007 | 09:30 PM


Interesting story about Radiohead's new release, "In Rainbow's."

Their pricing scheme for downloads is designed to give the Music Industry -- especially major labels -- fits. According to their website, IT'S UP TO YOU.

Notes Salon:

"This weekend the band announced that its new album, called "In Rainbows," will go on sale on Oct. 10. They still haven't signed with a label, and the album won't be available in record stores nor on iTunes or any other online music shop. You'll find it only on the band's site, and if you're looking for a digital version, the price is very attractive: Whatever you'd like to pay.

You can pre-order the new album here. Click to purchase the download and you're presented with a simple screen at which you've got two boxes to fill in, quantity and price (in pounds). "It's up to you," the site says."

For those of you who, like me, prefer the physical media, you have a high priced, rpemium option:

"If you'd like something physical, the band is also selling "In Rainbows" in something it calls a "discbox," a beautiful package that includes a CD, two vinyl records, digital files, album artwork, and lyrics booklets. It sells for 40 pounds, about $81 (the price includes shipping anywhere in the world). If you've got a Radiohead superfan in the family -- and who among us doesn't? -- your holiday shopping just got easier."

(Additionally, I see a lot of other Econ bloggers have weighed in on this natural experiment:  Free Exchange, Mankiw Blog, Truth on the Market, Freakonomics, Long Tail & Marginal Revolution . . .)

Its an interesting experiment. The WSJ was curious:

"By letting consumers dictate what they will pay for a digital copy of the album, the band will test theories of online pricing that have been the subject of much speculation in recent years -- most notably, the notion that fans will pay a fair price for downloads if given the freedom to do so on their own terms.

At the same time, the digital-sales setup goes against the grain of the standard set by Apple Inc.'s iTunes Store, where music is generally priced at a uniform 99 cents a song and $10 or so an album. Radiohead hasn't made its music available for sale on iTunes, apparently because the band wants to sell only full albums and not let users pick and choose songs."

I am very curious to see how much the average fan thinks an MP3 download is worth, given my longstanding thesis that the music industry has priced themselves out of competitin with DVDs, gaming, and the 'net.

Of course, we can always count on Bob Lefsetz to give us the postal-version of the straight shit:

"What if RADIOHEAD is giving the major labels the middle finger? What if they’re saying WE’RE RICH ENOUGH! That the Net allows you to go straight to your audience. FUCK the middleman who says he’s so necessary.

R.E.M. went for the cash They could have gone indie. Turns out re-signing with Warner was a good move, for they never sold tonnage again, despite getting PAID for selling tonnage. Springsteen went for the check. As did Neil Young.

But none of the foregoing acts are in their prime. They’re riding off into the sunset. They don’t have a hold on the younger generation. Boomers in Bimmers are the fans of these acts, none of whom can sell big numbers anyway. They’re all on victory lap tours, raking in the dough for retirement. Radiohead doesn’t have their dough…shouldn’t they be going for the CHECK?

Isn’t that the majors’ advantage, they’ve got the money, they can write the CHECK?

Who leaves money on the table. Certainly not the agents. They don’t want StubHub to steal a single dollar from their bottom line. Fuck image and credibility, THAT’S MY MONEY! I’m gonna make a deal with Cadillac. I’m gonna whore my product out on TV. Radio won’t play my music, I can’t get it on the Top Forty, MY HANDS ARE TIED!

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.

Shit, 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 fucked. 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.

This is what happens when you sell twenty dollar CDs with one good track and sue your customers for trading P2P. This is what happens when you believe you’re ENTITLED to your business. This is what happens when music is a second-class citizen only interested in the bottom line."

Ouch. I'm not sure if Radiohead is THE band to prove or disprove this. If it were Coldplay, that might be more definitive.

Regardless, this should be interesting . . .



Radiohead's new album: Choose your price
Farhad Manjoo
Salon, 2007.10.01 • 13:49 EST

Radiohead to Let Fans Set Price of Downloads
WSJ, October 1, 2007

Radiohead In Rainbows
Bob Lefsetz,


Monday, October 01, 2007 | 09:30 PM | Permalink | Comments (22) | TrackBack (0) add to | digg digg this! | technorati add to technorati | email email this post



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Great concept, I like the idea of knowing every dollar I give goes direct to the band with no Copy protection. Worth me giving them what'd normally go to a cd or itunes.

The only prolems are,
1. I don't want to preorder a digital download so hopefully I'll still remember this on the 10th

2. The website sucks. Images don't load and the design is poor. This should have been fixed up before launch.

Posted by: Denis Pitcher | Oct 1, 2007 9:50:32 PM

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