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LOS ANGELES — Radiohead let its fans decide how much to pay for a digital copy of the band's latest release, "In Rainbows," and more than half of those who downloaded the album chose to pay nothing, according to a study by a consumer research firm.
Some 62 percent of the people who downloaded "In Rainbows" in a four-week period last month opted not to pay the British alt-rockers a cent. But the remaining 38 percent voluntarily paid an average of $6, according to the study by comScore Inc.
Radiohead broke with its past practice of releasing its music in CD format and through a major record label when it released its seventh studio album online itself. The biggest wrinkle was the band's decision to let fans pay as much or as little as they wanted to download a copy.
The results of the study were drawn from data gathered from a few hundred people who are part of comScore's database of 2 million computer users worldwide. The firm, which has permission to monitor the computer users' online behavior, did not provide a margin of error for the study's results.
Between Oct. 1 and Oct. 29, about 1.2 million people visited the Web site the band set up for fans to download the album, comScore said Monday. The research firm did not say how many people in its study actually bought the album.
Among U.S. residents, about 40 percent who downloaded the album paid to do so. Their average payment was $8.05, the firm said.
Some 36 percent of the fans outside the U.S. who downloaded the album opted to pay; on average, those fans paid $4.64, according to the study.
Radiohead's U.S.-based publicist said Tuesday the band had no comment on the study.
The online release sent shock waves through the recording industry, with some hailing it as a shrewd move at a time of declining CD sales industrywide and others writing it off as a publicity stunt that amounted to the band giving away its music.
The band, which also offered fans the option of buying a lavish box set for about $82, plans to release the album in CD format some time next year.
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 | Free Downloaders (Freeloaders?) of Radiohead Album Number 62% | technologyexpert.blogspot.com | Tue Nov 6 | 0 |
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{"commentId":1162303,"authorDomain":"Starlight"}
Interesting. I wonder if, after all expenses, the online release for still profitable. Of course, with a premium package for the hardcore fan and a CD release later, this is one, not the only, way the band is making money on their songs.
{"commentId":1162303,"threadId":"172260","contentId":"1077472","authorDomain":"Starlight"}
- 1 vote
#1 - Tue Nov 6, 2007 2:48 PM EST{"commentId":1162406,"authorDomain":"whyren"}
There are probably some that didn't wish to pay for the download as they intend to buy the actual CD when it is released.
{"commentId":1162406,"threadId":"172260","contentId":"1077472","authorDomain":"whyren"}
- 2 votes
#2 - Tue Nov 6, 2007 3:15 PM EST{"commentId":1162687,"authorDomain":"collin"}
that is true. As far as marketing experiments go this one fails by not taking the opportunity to ask a few survey questions prior to download. They also did a very poor job at marketing the album as this is the first I have heard of it. I'd love to know how many downloads they had total.
{"commentId":1162687,"threadId":"172260","contentId":"1077472","authorDomain":"collin"}
{"commentId":1162739,"authorDomain":"damiankd"}
They also did a very poor job at marketing the album as this is the first I have heard of it.
How did you miss the buzz? It was all over Digg and Newsvine for sure. I'm sure it was covered in other social & corporate news sites, too.
{"commentId":1162739,"threadId":"172260","contentId":"1077472","authorDomain":"damiankd"}
- 2 votes
{"commentId":1162433,"authorDomain":"kylen"}
It's hard to be duly diligent when deciding to buy something you can get for free. That is you decide up front how much to pay before hearing it, but taking the time to try and determine from samples or other information sources how much you like it when you could just download it for free and see for yourself is unlikely. So maybe some downloaded it twice (or more) and only paid once. For $8 that seems at least plausible.
I didn't participate, the idea is interesting but I don't think ultimately workable. Those producing a product need to assign their value to it, then I can decide if it's worth that or not. By offering it for free they are kinda saying it has no value to them. I do like the digital direct purchase model though, it just doesn't have to be combined with the pay what you feel like it could just be the cost/profit without the middle man.
{"commentId":1162433,"threadId":"172260","contentId":"1077472","authorDomain":"kylen"}
- 1 vote
#3 - Tue Nov 6, 2007 3:26 PM EST{"commentId":1162469,"authorDomain":"chasing"}
There are also those few who tested it out for free, and the went back and redownloaded it for money, once they decided it was "worth it".
{"commentId":1162469,"threadId":"172260","contentId":"1077472","authorDomain":"chasing"}
- 3 votes
#4 - Tue Nov 6, 2007 3:33 PM EST{"commentId":1162484,"authorDomain":"rightenough"}
I'm pretty sure if they self-released it, the only costs they would incur would be recording/production, and any publishing fees. But if they self-published it, then those would be neglected. Essentially they retain creative control, and get the lionshare of profits; a change from many contracts/label arrangements that can sometimes leave bands in debt while labels continue to profit! Breaking even may just involve exceeding those production/recording costs, as well as securing the bandwith/eCommerce/servers to handle one heck of a pull on a website.
{"commentId":1162484,"threadId":"172260","contentId":"1077472","authorDomain":"rightenough"}
#5 - Tue Nov 6, 2007 3:37 PM EST{"commentId":1162538,"authorDomain":"brianford"}
I paid $5.32, or something like that.
{"commentId":1162538,"threadId":"172260","contentId":"1077472","authorDomain":"brianford"}
- 1 vote
#6 - Tue Nov 6, 2007 3:50 PM EST{"commentId":1162617,"authorDomain":"damiankd"}
I paid 5 pounds, so about 10 dollars US. That's what I would've paid for the album if it were on iTunes or Amazon.com's mp3 service.
{"commentId":1162617,"threadId":"172260","contentId":"1077472","authorDomain":"damiankd"}
- 1 vote
{"commentId":1162638,"authorDomain":"brianford"}
True.
With that said, I felt like paying less was fair because I had no idea whether I would like the album (no way to preview it) and the amount I paid is probably quite a lot more than the band would have received from a label even at the higher price -- were it purchased on CD or from (say) iTunes.
(The amount I listed in #6 is US dollars.)
{"commentId":1162638,"threadId":"172260","contentId":"1077472","authorDomain":"brianford"}
- 1 vote
{"commentId":1162635,"authorDomain":"zachyoung"}
The study can't quite be accurate. I know that I downloaded the album for free with plans to go back and pay an amount later based on how good I thought it was. Or if its really good I might just buy the CD later instead.
I would guess that a lot of people did this too.
{"commentId":1162635,"threadId":"172260","contentId":"1077472","authorDomain":"zachyoung"}
#7 - Tue Nov 6, 2007 4:13 PM EST{"commentId":1162702,"authorDomain":"collin"}
Nope this is why I call it a failed marketing experiment.
{"commentId":1162702,"threadId":"172260","contentId":"1077472","authorDomain":"collin"}
{"commentId":1162747,"authorDomain":"damiankd"}
{"commentId":1165646,"authorDomain":"collin"}
Well no doubt they made some good money off it but there is still a missed opportunity to gather information that will help out next time around. There is never a financial value of research but with good research the applications can have massive value.
As a web developer I always fine tune the users experience and lead them where they need to go. For a database application this means less work and for a marketing site this means leading visitors exactly where they need to go. lets assume 1.2 million is just the number of visitors to the site, which it likely is. Then lets ask how many people made it from the home page to the buy album page. Did a visitor drop off because he had to take a path from home->albums->new album info->register->buy->confirm->download? Maybe we want to adjust the site a bit.. make an ad more prominent on the home page that goes directly to the new album page, then cut out the registration page and make that optional so registered members can slide in without entering a lot of info but otherwise just collect the billing info and then download immediately.
It's all about optimizing. With the right data you know where to set the price, you can also learn why people like that price. Is it based on the quality of the songs or that they have been conditioned to a certain price? What price is going to be at the high edge but not a penny more than what will upset a visitor. It's a good idea to know your audience.
{"commentId":1165646,"threadId":"172260","contentId":"1077472","authorDomain":"collin"}
{"commentId":1162649,"authorDomain":"whoadae"}
I downloaded it for free. Listened to about 5min of it. Didnt like it and forgot about it. I hope they're not counting me as a fan that paid $0 for it.
{"commentId":1162649,"threadId":"172260","contentId":"1077472","authorDomain":"whoadae"}
#8 - Tue Nov 6, 2007 4:16 PM EST{"commentId":1162650,"authorDomain":"damiankd"}
Between Oct. 1 and Oct. 29, about 1.2 million people visited the Web site the band set up for fans to download the album, comScore said Monday. The research firm did not say how many people in its study actually bought the album.
Among U.S. residents, about 40 percent who downloaded the album paid to do so. Their average payment was $8.05, the firm said.
Some 36 percent of the fans outside the U.S. who downloaded the album opted to pay; on average, those fans paid $4.64, according to the study.
So, if 1.2 million people visited the website, how many purchased? According to the amounts paid here, if 30% of folks who visited actually purchased, Radiohead would get a sweet ~1.7 million US. Even if only a paltry 10% of folks who visited purchased, they'd still get over $500k US. How much would they have to sell to make that much if they would've distributed their CD through the normal channels?
Let's not forget that this study still didn't account for the boxed CD sales, and doesn't account for the normal distribution of this same album that Radiohead will be doing later in the year or early next. And doesn't account for any merchandise or CD sales from any supporting tours.
Radiohead made a killing on this record, and they deserve it.
{"commentId":1162650,"threadId":"172260","contentId":"1077472","authorDomain":"damiankd"}
- 1 vote
#9 - Tue Nov 6, 2007 4:16 PM EST{"canLink":false,"threadId":"172260","isPrivate":false}
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