Torsten Curdt’s weblog

How stupid is Radiohead?

radiohead - in rainbowsSome people seem to think that making their new album “In Rainbows” available on their website was a really stupid move. According to ComScore only 38% voluntarily forked over an average of 6 US$ for the album. Still a fair amount of music magazines consider this album to be one of the best albums in 2007. They would have made so much more money! Did they lose their minds releasing it at the mercy of their customers? I personally don’t think so. Let me explain why I think it was breakthrough and a success.

THE STATS There are no official numbers released. Comscore claims to be very accurate but there are voices (including Radiohead) that beg to differ. Their report is based on about thousand people. My question would be e.g. how they selected the panel. How did they find the “average radiohead listener”? But even assuming their results are as correct as an estimate can be it’s up to the interpretation whether this online experiment has been a success or not.

THE INTERPRETATION I believe the common interpretation is way too simplistic – a naive assessment of the situation comparing apples and oranges. It’s not like people bought the CD for 6 bucks and a lot of them just took it without spending a dime at all. It has to be realized that the internet is a completely different distribution channel with different rules.

DOWNLOAD != CD How many paid once but downloaded twice (or even more)? “I bought the new Radiohead album last week? Bummer, I forgot my iPod …wait I download it again!” I’ve encountered this freedom of download a couple of times. My panel of friends surely was small and possibly not representative, but I was surprised how often some folks downloaded the album. The perception that once you have paid you are allowed to download over and over again is not expressed in these statistics I believe.

THE EVALUATION PATTERN Another pattern that messes up the results are what I would like to call “pay last” customers. Having the freedom to download the album first. Evaluate it and then pay a fair prize – why would I want to pay upfront? So people might just download the first time paying nothing – but come back and pay whatever they thing is suitable. The first download might still have been included in the 38%.

THE REAL DAMAGE But let’s assume the 38% where unique downloads (no second or evaluation downloads). What does it mean that those people downloaded the album for free? Some surely downloaded the album just because it was available for download. The collector that just wanted to add the album to his big collection of music. He probably hasn’t even listened to the album more than once. And there also is the type that has never spend a dime the past 10 years on albums. “Why should I pay for music when I can copy/download it for free?” The people that only have mixtapes – but never make one.
Would those people have bought the CD? Of course not. They maybe might have copied it from a friend or downloaded from the usual file sharing places. So what’s the real damage if they would have never ever bought the CD anyway?

Another question is whether 38% is really that high after all. What would have been different if the album was released on CD in the first place? For sure the album would have been available via P2P the next day anyway. So what’s the “free download” percentage for a regular album release?

And while the average 6 US$ might be less than what you’d pay for the CD at Amazon, people tend to forget that the download just isn’t a CD. Nothing to touch – no booklet, no experience – only the music. On the other hand this makes it possible to get around a lot of the usuals costs. No man in the middle. Which also means more money for the artists. Of course it depends on the individual contracts but… Assuming you buy a CD for 12 US$ it’s not very likely the artist will see much more than 1-2 US$. With that in mind an average of 6 US$ directly into the pocket of the artist suddenly does not sound so bad after all.

MY CONCLUSION Be it the controlled download from their website or the download via file sharing. Getting the music out to more people helps finding new fans. Helps artist to reach more people. Purists might say that’s one thing music/art is about. In some weird way it’s also a quite effective form of marketing. And in the end the fact to be known and liked by more people (at least some day) might outweigh the potential loss. I believe in the lazy marketing effect. The word of mouth. The influences from social connections are so much more powerful. But how will artists make money then?

This whole discussion reminds me on those people laughing at open source. How do you make money if you give away the product for free? What service provisioning is for open source could be the experience around music. I say: drop the big labels. Go for direct distribution – maybe just based on donations. Build up a huge fan base and play live. Merchandise and collectables should do the rest.

While some people might surely call this approach naive, I call it optimistic. In turn I find the idea of fighting against technology (that be file sharing) a naive fight against windmills. There have always been mixtapes and there will always be the private copy for a friend. While I am not supporting the idea of breaking the copyright law, we have to accustom to the fact that common values are changing. Younger generations have a different perception of copyrights. Likewise there is the need for the music industry to change and rethink. My suggestion: If you cannot fight it – use it.

There is also an interesting TED talk from Larry Lessing about copyright. It has a different focus but some patterns apply here as well.

Radiohead now has signed a contract with XL/Beggars Group. So maybe this all was just to get a better deal, but maybe it was also just the right thing to do at that time. But I hope this experiment has triggered some thoughts and I hope the right people don’t believe in the blunt statement that this move was a mistake.

  • So what... nowhere has been giving not just downloads for free, but handing out free cds at shows to anyone who wants one. Nowhere played with the Toadies at the Trocadero this summer and gave out over 400 free cds! www.nowherelive.com www.myspace.com/nowherelive
  • Carl
    I guess radiohead don't rely on music sales to earn a living. Either they don't need money, or, they have another job that earns money to pay the rent.

    It seems to me that Radiohead was someone's hobby that became a business that became a hobby again.

    I don't think analysis of the internet distribution of "In Rainsbows" suggests either a bad business model or some kind of viral marketing technique.

    Musicians create music for their own reasons, and if the only reason is money, few musicians will continue for long.

    I don't expect any musician is going to record some songs and then leave them in the back of a closet somewhere never to be heard.

    The explanation for making music available on the internet for free is simple:

    Most creative people like to share their creations with others.
  • Hey Torsten,
    thank you for this very great post. However, i think about that kind of topic for a long time now: http://cyghul.blogspot.com/200...

    I really think, that radiohead did nothing new; there are much underground bands out there who give away their music for free, see also: http://blue.jamendo.com/de/ . Radiohead is a lot bigger band and i am very glad they gave their album for download. I hope more people will do this now; and yes, it's some kind of open source of music. I imagine that companys like the GEMA will fall (or their influence will reduce)- cause if you give away your music for free, why should you care if somebody covers your song? Nobody would steal that song, the community would keep itself clean.

    And: playing live and some merchandise was always the only way for musicians to come to money. The selling of CDs was good only for the labels. I recorded several CDs for several labels; after 2000 sellings we (4-5 people!) got 1,50 DM (=0,75 Eur) for each additional sold CD. So, giving away the music for free would not change anything for the band. However, thanks for this post, i will recommend it in my music message boards.
  • I believe this was a smart move on their part. There are so many great artists that it is difficult to get noticed. The PR they received based on DRM-free download is how I noticed them and began purchasing their music. They may have lost revenue short term but I think this was a savvy investment on their part to attract more attention and new fans.
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