Radiohead Tells Fans To Name Their Own Price For Latest Album Downloads; Gives Them A Reason To Pay

from the new-business-models dept

The band Radiohead is apparently coming out with a new album; the first after its original record deal was completed. It appears that, like many other musicians, they’re realizing that the traditional recording industry business model doesn’t quite make sense for them. While there was some buzz about an apparent hoax website about the band’s new album, it turns out the real thing is a bit more interesting. That’s because Radiohead is doing two smart things. It’s telling fans they can name their own price for digital downloads. You just pay the band however much you think the downloads are worth and they’ll be happy. But that’s not all (though, that’s what most folks are focused on). Rather than just offering up the content, they’re also trying to give people a reason to actually buy something else. In this case, it’s a “discbox,” which will include the new album on both CD and vinyl, as well as an additional CD of seven extra songs and photos, artwork and lyrics. The whole thing will be packaged in a nice container. In other words, the band is following in the footsteps of folks like Trent Reznor, in realizing that the music is promotional for other stuff — and you can still sell stuff if you make it worthwhile. In this case, Radiohead isn’t really selling the “music.” After all, you can get that for free. They’re selling the full collection of stuff that comes with the music. Funny how it’s the musicians, and not the record labels, who seem to realize that adding value and getting people to pay for it is a business model that beats suing fans.

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Comments on “Radiohead Tells Fans To Name Their Own Price For Latest Album Downloads; Gives Them A Reason To Pay”

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58 Comments
maths (user link) says:

Labels facing A-list artist defections

With Trent Reznor also recently announcing that once Nine Inch Nails fulfill their Universal commitments, they will be selling their albums direct to fans from their websites, this signifies a sea-change in distribution methods by A-list artists. Of course this is not an option for every band, but if all the superstar-bands that actually benefited from the old system to get to where they are, are now subsequently deciding to go totally indie where are the major labels going to find the mega-revenues that used to subsidize the rest of the money-losing acts in their stable?

More details here: http://www.music2dot0.com/archives/47

blue says:

Re: Labels facing A-list artist defections

where are the major labels going to find the mega-revenues that used to subsidize the rest of the money-losing acts in their stable?
Forward thinking bands like Radiohead and 9-Inch Nails will eventually host favorite unknown groups off their better funded web sites. They’ll be giving exposure and making a few bucks off bands that are their opening acts.

redothemaths says:

Re: Labels facing A-list artist defections

The fact that the labels actually loose money on some bands seems to indicate that they have an unsustainable business model. Maybe it is due to their own size that they have grown so dependent on having so called “A-list” artists. Too much beurocracy, too much money for crap videos for crap artists, to much money to the shareholders, too much money to everyone else but the artists.

I for one hope that the biggies keel over sooner rather than later. Let the /art/ists decide how to distribute what they’ve created and the beholder decide what is art.

Eeqmcsq says:

“Funny how it’s the musicians, and not the record labels, who seem to realize that adding value and getting people to pay for it is a business model that beats suing fans.”

Probably because musicians are the ones more likely to be connected to the fans, and have a better sense of how to appeal to the fans, than the music labels who operate only on numbers and the letter of the law.

Burzum says:

The band only gets 72 cents

I had an interesting conversation over the weekend with a second year student who’s majoring in business and minoring in music. He was telling me about one of their class exercises which was to calculate the number of album sales needed to cover the costs of producing from a musicians perspective.
Of the $19.99 you spend for a music CD the band only gets about 72 cents. The rest goes to the record label. So from the perspective of the band, CDs are really only good for publicity. The majority of their money comes from shows, and if they’re really good, endorsements.
The bottom line is that people listen to what they like and in the digital age the middle man record labels aren’t needed to help us find good music. That’s what scares them and that’s why they’re making a last ditch effort to appear useful.

Wolfger (profile) says:

Re: Good...

As if they don’t *already* put the squeeze on the small bands? They most certainly do.

Yes, the A-listers can go solo and make good money. The unknowns have a much harder row to hoe. I’m interested in seeing how it all shakes out. I’m predicting record labels will start trying to leverage new artists into long-term contracts with very little up-front money. If the band does poorly, no loss, and if the band does well, they’re locked in to a contract.

JGM says:

The shareware model applied to music *is* pretty interesting. As others have pointed out, even at $5 or less per album “sold” the artist makes a lot more than they would with traditional distribution and pricing.

As to the fancy package thing, well, it’s a good theory, but problematic in the long run, because: 1. A big draw for such packages is the novelty/collector factor; if everyone started doing it that cachet would disappear quickly, and 2. the trend is so thoroughly *away* from delivery on physical mechanism that it’s just too hard against the tide.

Now, if someone can figure out a nifty combination of the two: download the basic tracks from the artist on the shareware model, and/or pay a set price for something extra, worthwhile, not gimmicky, and not file-shareable. Not sure what that is (stickers and t-shirts only get you so far), but whoever does will have the magic formula.

Count Porkula says:

I will buy this from Radiohead

This is absolutely FANTASTIC!! This is exactly what the music industry needed.

Since its
1.) Not a product of any RIAA/MPAA affiliated companies and
2.) Not encumbered with DRM
I will happily pay for it. I quit buying music the day the music cartels started suing people (and I never will purchase anything from them again) but if I can buy it directly from the band, I will happily part with my money.

Go Radiohead!

Anonymous Coward says:

>>Funny how it’s the musicians, and not the record labels, who seem to realize that adding value and getting people to pay for it is a business model that beats suing fans.

I still maintain that the whole RIAA strategy isn’t about the money. It is about controlling the market. The industry has gotten used to a market that they control from top to bottom. They decide who gets airplay, who gets promotions, and how much performers get paid (or don’t get paid). In industry had gotten quite cozy with their little model of formula Rap and boy/girl bands.

The Internet in general threatens loss of control. Musicians might once again be encouraged to be creative and break molds. Most business models want predictability, not creativity.

Anonymous Coward says:

Re: Re:

I (and most people I’m sure) think that control and money go hand in hand in this situation (which I think is what you are saying as well). The big labels want full control of music distribution in order to maintain their profit margin. They think that full control over how 1,000 out of 1,000 customers buy and use music is better (control and profit wise) than limited influence over how 10,000 of 100,000 customers buy and use music.

The thing is the big labels could change their business model and still make money but they would lose their controlling stranglehold on distribution and they would not make as much money.

yogi says:

“Funny how it’s the musicians, and not the record labels, who seem to realize that adding value and getting people to pay for it is a business model that beats suing fans.”

Let me take a wild guess why this is so:
1 – musicians can’t afford to sue everybody?
2 – they are human beings just like me and you.
3 – they don’t have a monopoly on music distribution, never had one before and probably don’t want one now either.

Chuck Norris' Enemy (deceased) says:

Re:@ #7

I was wondering how this was all going to pan out. I knew Radiohead had fulfilled their contract and was glad to see them tell the label to f___ off. I bought a couple of single discs from their last album that had some DRM issues and really hoped it wouldn’t continue. The problem, Burzum, is that your idea, although interesting, would work if they actually owned their old music. So unless the artists was label-free (or had a flexible label) it would never be realized. No label would ever allow that to happen unless they tacked on a huge $. We will see if the new album gets any radio play, not that Radiohead has been very mainstream here in the US lately.

shmengie says:

“…realizing that the music is promotional for other stuff…”

as a really good musician, but a lousy businessman, this strikes me as wrong. for a lot of us, the music is the goal, not the money. if the money comes, great! if not, we carry on, cuz the music in us, and expressing it, is what matters. there is no, “other stuff.”

actually, as i think about it, there is, “other stuff.” like t-shirts, posters, oven mitts. but, you don’t make music to sell oven mitts. you sell oven mitts to make music.

Hulser says:

Re: Re:

schmengie said…
“the music is the goal, not the money”
“you don’t make music to sell oven mitts. you sell oven mitts to make music.”

If this is your attitude, then there shouldn’t be a problem with Radiohead’s pay-what-you-think-it’s-worth model. But if you want to be able to make music for a living instead of slaving away at Acme Oven Mitts all day, then maybe work something out to sell branded t-shirt, posters, and uh…oven mitts.

Daniel Smith says:

Well first off, I enjoy the iTunes model, but wonder how much the band ever sees of that revenue. I’ll assume ‘next to nothing’.

I love the idea of physical media being the thing that justifies the price, such as foldout LP (that would be vinyl, kids…) artwork. There are a ton of collectors out there. If you grew up with double album sets and reasonably sized posters, you know that CD Packaging was a letdown … Of course, in 30 years we’ll get to deal with nanotechnology based physical copying 🙂 That’s going to make audio/video copying look like a small warmup act.

Anonymous Coward says:

Matador (a real record company) has been doing something like this for a while, though not quite as radically. For instance, with the latest New Pornographers album, you could pay a ~$5 premium and get access to a pre-release audio stream of the whole album as well as a set of burn-your-own CDs to fill with material to be published over time after the actual album release. The execution was pretty clunky, you had to go to a real bricks-and-mortar store to participate, and then only a relatively small number of retailers were on-board with it.

sparky says:

the RIAA is clueless...

Futhermore record companies that defect from iTunes over their own greed are even more clueless. Apple provided a PAYING model that works, and they were mocked in the beginning as never amounting to a significant amount of revenue. It is just a matter of time before Apple starts selling music directly, cutting out the recording studios altogether… and more artists also selling directly. Instead of wasting time chasing lawsuits against grandmothers & students, they should try to figure out what the consumer really wants….

chris says:

Interesting idea…but gimmicks don’t last long. Selling CD’s and Vinyl? You can’t build a business model on selling out of date formats. Note to musicians: continue selling your music for dollars and cents…but break away from the major record labels who don’t have your best interest in mind. Instead, establish your own web presence to distribute your art as you see fit. But don’t forget, you’re in business to make money…not please greedy, selfish bloggers.

da9ve says:

What's missing?

The story doesn’t mention if there will be a standard, just-the-usual-single-CD issue of the new album available for roughly the normal price,…. I love Radiohead – and even still have and occasionally use a nice turntable – but I’m not sure I can bring myself to spend $80 for the big elaborate package with the redundant media, even if it’s the only alternative to MP3s (which are just not acceptable to me). Are there going to be downloads in a lossless format (FLAC, ALAC, SHN)? I’d gladly pay somewhere between 0 and the normal CD price for those.

BTW, the DGMLive model doesn’t include a voluntarily set price. As much as I think Robert Fripp is an original thinker and one of fairly few established artists trying to work outside the industry box, and I love that he’s selling live recordings sourced from bootleg and other unofficial recordings, he didn’t arrive at anything as different as this.

Anonymous Coward says:

It’s funny how no one ever thinks about how insanely overpriced music is. I mean, even to download 1 song is 99 cents or whatever on iTunes. Think about it, music is essentially useless. You can’t drive it, you can’t live in it, it’s just something for your ears. And look at the insane value that is placed on it. Profit margins are insane when you think about what it takes to make music: practically nothing but a little talent. It just amazes me how much talk there is on iPods, the RIAA, etc. for something with so little real value or use.

freakengine says:

Re: Re:

Wow, you’re SO right. All I have to do is buy a little casio keyboard and BAM, I’m making music! I can’t believe that people will actually pay me 99 cents per song for my sophomoric electronic noodling. I’m certainly glad I didn’t buy a bunch of expensive high-end equipment, rent practice space, spend all of my time writing and developing material, spend money on studio hardware (or worse yet-studio time), and then get told that to play in many of the local clubs in LA, I’d have to pay THEM! Whew! The way you describe is much much better!

kunopis says:

Re: Re:

Music has no physical use, but it’s cultural capital, a distraction/escape and an emotional regulator. People think it is very important to be into obscure bands- it’s easier to listen to stuff than actually read literature or go to art shows. I personally find it immensely useful for cheering myself up/having a good cry to- if I didn’t have it I’d have to rely on other people (who are usually helpful, but sometimes not in the mood to let me moan at them) or food.

But I agree, it’s still overpriced, even with these functions.

warelock says:

Street Performer Protocol

Sounds like RadioHead needs to read the Street Performer Protocol.

i.e.: “When a trusted third-party escrow service receives $X in donations on my behalf, they will automatically release my next CD of music for free downloads.”

All they have to do is set X to something higher than they got paid by the record companies. Just not too high… 🙂

Rich says:

Only thing really missing is the cost of making th

Sure there are ways to record it “cheaply” but there is a difference when you ahve a nice studio, a top quality producer an more. I like the concept however it takes some money to make a great sounding CD. Most small bands struggle to pay the bills, and then try to save some of that pittance to buy studio time, etc.
Its a decent idea, just remember that an established artist does not work as hard to market or fund their enveavor.

play for fun says:

More Road To Go

Great news Radiohead,
thanks to be open minded. Actually I think that technology today offers a whole new way of thinking about creation, distribution, consumming and maybe let us rethink the way the system works.

Though we need much more way to go to make it a general schema even if it works for more than a decade in some branches (say free and open software – http://www.fsf.org) of our economy.

The thing is that such a new initiatives need a support if we think that this is worth the idea, because the oposition from big companies will be great.

p2pfoundation.net is a nice site that gives a whole bunch of new ideas of functioning in almost every domain of our society. Also the Jeff Vail’s book (http://www.jeffvail.net/) ‘A Theory Of Power’ (you have a choice to buy the book or read it for free 🙂 is a lot about new models. Maybe there are more ? You know something about it ?

Once more cheers Radiohead.

Arby says:

Credit where due

Do you really think the musicians themselves thought this up, and not some business managers, marketers, etc?! Give me a break. Good for them for freeing themselves of the monopolistic labels, but give credit where credit is due. These guys play music. They aren’t necessarily controlling 100% of their marketing efforts even without labels!

Reality Check says:

not quite ...

“I had an interesting conversation over the weekend with a second year student who’s majoring in business and minoring in music. He was telling me about one of their class exercises which was to calculate the number of album sales needed to cover the costs of producing from a musicians perspective.
Of the $19.99 you spend for a music CD the band only gets about 72 cents. The rest goes to the record label. “

The clerk at the record store gets some of that money, as does the store’s landlord, and the owner, and the guy who drove the delivery truck, and the people at the label’s warehouse, etc. etc. Also the label has costs to recoup – the million-dollar video without which no records would sell, the payola to radio, the advertising, the recording which took so long because the band are doped-up hacks that are somehow proud of having written half the album in studio at $10000 per day, etc. etc. etc.

The labels are far from angels, but a lot of the artists have been their own worst enemies in a business sense. If bands were more stable and acting like adults, the labels would have a lot less losses to cover and so goes the cycle.

Two sides to every coin. Keep on rockin’.

Charles Evans (user link) says:

new paradigms

I have been arguing for a decade that this sort of thing would happen. Our expectations in the early days of the Internet were a bit enthusiastic and overly optimistic, but things finally are coming around as I describe in my paper on the economics of information goods, “Pseudo-Intellectual Property.”

Fret not, weary artist! A-list acts will begin to sponsor up-and-comers in a kind of apprenticeship system. We will start seeing people like Trent Reznor developing stables of bands that they promote, train, and support.

If Trent Reznor becomes known for having awsome opening acts, demand for tickets to his shows will increase. He has an incentive to collect inexpensive and talented unknowns around him, and should be willing to expend some effort, time, and money, in order to discover them and nurture them.

Elton John’s recent prattling notwithstanding, the Internet is driving this democratic shift away from corporatist elitism. The big labels have squandered their capital over the past decade.

Popular culture is stagnant. Independent film makers, musicians, and other artists are the future of entertainment, and I applaud Radiohead’s decison. Bravo, lads!

Sharon Dobson says:

I think radioheads idea rocks and i know it works.

Radioheads new idea for the fans to pay what they want to download is perfect. I already know an artist in the uk called Alun Parry a singer songwrter from liverpool is already doing this for his fans.
Its great Check it out.

http://www.parrysongs.co.uk/buskernomics.html

http://www.parrysongs.co.uk/music.html

http://www.parrysongs.co.uk

Kevin says:

nothin new

I love radiohead, I’m glad they are doing this. I think it’s genius. They don’t really have ‘casual’ fans. I think many will download the mp3’s, and buy the disk when it comes out next year. Myself,. I will be buying the big vynil combo for myself.
This isn’t the first time an artist has done it. Back in 79′ Keith Green did it. I copied this from his wiki page

In 1979, after negotiating a release from his contract with Sparrow, Green surprised many in the music industry by refusing to charge money for concerts or albums. Keith and Melody mortgaged their home to privately finance Green’s next album, So You Wanna Go Back To Egypt. The album, which featured a guest appearance by Bob Dylan, was offered through mail-order and at concerts for a price determined by the purchaser. As of May 1982, Green had shipped out more than 200,000 units of his album – 61,000 for free. Subsequent albums included The Keith Green Collection (1981) and Songs For The Shepherd (1982).

Edd Chittenden (user link) says:

Kurt Cobain said they were dinosaurs 15 years ago.

We’ve known this was coming. With the internet and the fact that a large portion of the population is becoming more and more familiar and alert to new sharing/socializing/promoting networks it’s only a matter of time before we’re able to do without the big labels. Cheers to Radiohead and others trying this new model out. It’s a shame but it’s true, it’s too easy to get music for free. Many do want the whole package though. Pay what you want, pay a certain price and get added bonuses…a t-shirt, discount on concert tickets to see the band, etc…a compilation cd of their ‘apprenticed’ bands. A new compilation download set every few months,or month or week, who knows!?. With A-list acts, everybody will want to know the new bands that are associated with them. Just the exposure alone on A-list websites for these lesser-knowns could really get them off the ground. These ‘A-listers’ websites could become small networking centers in themselves much like their myspace pages are but could be much larger in scope. A-listers pay people to run it, ‘apprentice’ bands pay a modest fee to the bands to pay for the upkeep of this indie venture and we’re already putting alot more in the lesserknowns pockets for music sales….old boss, new boss, could be, but lets look at it this way, at least it will be up to the band running the venture, in the hands of music loving artists in many cases, instead of money grubbing business executives, trained in squeezing every cent out of any business they’re involed with. Big artists could look at it as a public service to host these lesser-known bands while still making more money than they would with the big labels. Imagine this kind of artist community support!
……ok, a bit rambling and utopian maybe, but the possibilities are endless here if the market is about being a good band that makes good music and therefore gets the spotlight for being an inspired new band instead of just being lucky and good enough(and lets face, alot of times pretty enough) to be picked up by a major label for fitting all of their cookie-cutter constraints.

J. says:

Big Labels are bad, music should be free- You Soci

I’m tired of reading comments by people who have bought into the media propaganda that “big labels” and the RIAA are evil. Since when is being against theft deemed such an offense? If you owned an apple stand and person after person came up and kept stealing your apples, you tell me you wouldn’t do any thing to stop it? Or would you say, “hey, they stole my product, oh wait, she’s a grand mother, it’s ok, take it all, take all my stuff!”

Because Lars Ulrich has become a successful multi-millionaire he should relinquish his ownership of his creations and just give everthing away? Nonsense! If you murder someone it doesn’t matter if you are a grandmother or a college student, you are still accountable to the law. Do you think the RIAA should target only certain types of people to sue (non-grand mothers and college students) or should they just apply the laws of theft equally? Stealing is against the law in every country. Why is it OK for computer companies to sue people who pirate their software and the Movie industry to sue people who pirate their movies and not OK for the music industry to protect the theft of their products?

These are all rhetorical questions of course, most people here don’t have the mental capacity or common sense to see all sides of an issue and therefore have the inability to apply rational, objective critical thinking to their decision making and formation of opinions.

If you can rationalize that stealing music is OK and is different from stealing apples because the big bad record labels are already rich and are mean evil people for seeking legal remedies for the theft of their goods then it’s a complete waste of time to try and debate the issues with you.

Mike (profile) says:

Re: Big Labels are bad, music should be free- You

I’m tired of reading comments by people who have bought into the media propaganda that “big labels” and the RIAA are evil.

Well, then you’ve been reading some other site. We never said that the RIAA was evil.

Since when is being against theft deemed such an offense?

Never. The problem is that you’re confused. Infringement is different than theft.

If you owned an apple stand and person after person came up and kept stealing your apples, you tell me you wouldn’t do any thing to stop it?

Apples are a tangible product. If someone steals the apple, you no longer have it. If someone *copies* music, that’s not true. It’s a very different situation. That doesn’t mean it’s legal, but it does mean that it’s different… and it also means that there are other business models you can apply.

These are all rhetorical questions of course, most people here don’t have the mental capacity or common sense to see all sides of an issue and therefore have the inability to apply rational, objective critical thinking to their decision making and formation of opinions.

Funny. We discuss this stuff all the time — and we do it taking into account all sides. But we also are intellectually honest about it. That means not calling infringement theft and not resorting to emotional arguments, but focusing on economic ones.

We also don’t insult people’s “mental capacity.”

If you want to play by those rules, I’d have no problem debating you and showing you why you’re wrong.

Mr Ken says:

I’m tired of reading comments by people who have bought into the media propaganda that “big labels” and the RIAA are evil. Since when is being against theft deemed such an offense? If you owned an apple stand and person after person came up and kept stealing your apples, you tell me you wouldn’t do any thing to stop it? Or would you say, “hey, they stole my product, oh wait, she’s a grand mother, it’s ok, take it all, take all my stuff!”

Because Lars Ulrich has become a successful multi-millionaire he should relinquish his ownership of his creations and just give everthing away? Nonsense! If you murder someone it doesn’t matter if you are a grandmother or a college student, you are still accountable to the law. Do you think the RIAA should target only certain types of people to sue (non-grand mothers and college students) or should they just apply the laws of theft equally? Stealing is against the law in every country. Why is it OK for computer companies to sue people who pirate their software and the Movie industry to sue people who pirate their movies and not OK for the music industry to protect the theft of their products?

These are all rhetorical questions of course, most people here don’t have the mental capacity or common sense to see all sides of an issue and therefore have the inability to apply rational, objective critical thinking to their decision making and formation of opinions.

If you can rationalize that stealing music is OK and is different from stealing apples because the big bad record labels are already rich and are mean evil people for seeking legal remedies for the theft of their goods then it’s a complete waste of time to try and debate the issues with you.

Well, u are going way off the topic. What i seen discussed is the fact that

1)artist are being taken advantage of financially by the major labels, and musically as to the music they make and touring like mad to make ends meet.

2)how established artists could go independent of label companies via the new media and start a apprenticeships system to bring up new talents

As to your point raised about “stealing music” obviously morally and financially it is “wrong”, everyone knows that, but the industry has to deal with what the people want. And what people want is more value for money, lower cost of the product, easier digital music for their ipods and computers which sums up the two points mentioned above.

And lastly, insulting others “mental abilities” to make a point doesn’t make you smarter, it’s just make people dislike you. Nobody has the ability to see all side of everything, unless you are involved in the music business as a artist, music label employee and a consumer, then you can safely say all side of the issue, otherwise you are just outside looking in. How’s that for critical thinking?

Anonymous Coward says:

As I’ve said before the music industry are dinosaurs, and as history has proven dinosaurs are prone to extinction. They are gone so get over it. Copying isn’t stealing!

By your thought process the following would be wrong no?
What if you bought an apple, and then planted it’s seeds to grow an apple tree? Would you then be a thief because you used the persons apple seeds to get yourself a tree, and in effect get yourself a $hit load more apples?
THAT IS WHAT COPYING MUSIC IS LIKE!

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