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Radiohead Adapts Our Business Model

John Paczkowski used to write "Good Morning Silicon Valley" (He's now at Digital Daily).

Way back when, John created the "Great Recording Industry Business Model Contest:

The recording industry needs your help. It can't seem to figure out a business model that takes advantage of the way the Internet has changed the economics of music distribution. Perhaps you can. Beginning today, I'll be accepting submissions for "The Great Recording Industry Business Model Contest." I'll post the best in GMSV as I receive them and I'll reward the author of the winning entry with the appropriate plaudits and a SiliconValley.com t-shirt in CEO-prison-scrub orange. Have at it.

The first model I proposed was the Napster Cooption Business Model:

"Napster would have been more like a multi-user programmed FM radio. Ideally, the Napster download medium would be of a lower burn quality (ripped at 128kps), somewhere between AM and FM. Napster traders would only be able to download these modest fidelity versions.

The last aspect involves the conversion of downloaders to buyers. This would be aided in part by giving music fans an additional incentive to purchase an old school, manufactured and shipped polycarbonate disc, or in the alternative, download a higher quality MP3 . . ."

A few years later, we rolled out a variation: The Grokster Cooption Business Model:

Use the technology as a promotional tool. Turn it into a modern, on-demand, web-based radio. Put out low-fi mp3s (96k or so) as way to expose new artists, promote special releases, rarities, etc. whet people's appetites for more content which history teaches us they are willing to pay for.

Jiu Jitsu the concept of piracy into a terrific tool for the industry to track, more precisely than anything else before, what artists and songs are attracting which listeners, and where. Custom tailor tours around it, marketing and advertising campaigns, etc.

Create the holy grail of algorithms:  Use it to roll out new music, artists and content via our clever algorithm that can tell, based upon what you have already downloaded, what you may like, will like and will definitely fall in love with.

Turn the recording industry from an asteroid doomed dinosaur to a warm blooded furry mammal. Coopt the technology. Embrace people's love of digital music. Be smarter business people.

Well, it seems that someone was listening: RADIOHEAD:

Radiohead MP3 release a tactic to lift CD sales

Radiohead's much-debated decision to let fans choose what they pay for its new album online is a promotional tactic to boost sales of compact discs, the band's management said yesterday.

"If we didn't believe that when people hear the music they will want to buy the CD, then we wouldn't do what we are doing," Bryce Edge of Courtyard Management told Music Week, the UK's industry magazine.

Nice to know someone was paying attention . . .

Sources:

Radiohead MP3 release a tactic to lift CD sales
Andrew Edgecliffe-Johnson
FT, October 11 2007 03:00 | Last updated: October 11 2007 03:00    http://www.ft.com/cms/s/0/0a9c779a-7797-11dc-9de8-0000779fd2ac.html

The Napster Cooption Business Model    http://bigpicture.typepad.com/comments/2003/09/the_napster_coo.html

The Napster Grokster Cooption Business Model    http://bigpicture.typepad.com/comments/2005/06/the_strikeoutna.html

Tuesday, October 23, 2007 | 08:50 PM | Permalink | Comments (6) | TrackBack (0)
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Comments

Why don't we go back to the 19th century publishing industry's business model? The author would create a novel which would be distributed via magazine serialization. He would receive a pittance from the magazine publisher. Book publishers would promptly steal the content and print unauthorized versions of the book. The magazine serials and the bootleg books would act as advertising for the author/artist who would then go on tour (lectures, etc.) where he would make his serious money via speaker fees.

In place of magazine serialization, substitute iTunes.

In place of bootleg books, substitute Youtube.

In place of speaker fees and lecture tours, substitute ticket proceeds and concerts .

Posted by: Norka West | Oct 23, 2007 11:19:15 PM