62% Elected not to pay for downloaded Radiohead album

[James Steele]

Well... saw an interesting story carried by the AP today. It comes as little surprise frankly:

http://www.signonsandiego.com/news/feat ... study.html

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Study: Most opt not to pay for Radiohead's download-only album, but many pay $6 or more

LOS ANGELES ••“ Radiohead let its fans decide how much to pay for a digital copy of the band's latest release, ••œIn Rainbows,••

[rcannonp]

Is it likely that the band would have made $2,700,000 if they were still with EMI and sold 1,200,000 cds? More? Less?

[James Steele]

I haven't really stopped to analyze whether the band came out ahead financially in the short term or not. Granted, there were no packaging costs and all the rest, just digital download. And they are no doubt keeping more per CD. So I don't know... MAYBE they made more money themselves this way?

All I see that was interesting is that 62% chose not to pay anything and I don't see that percentage ever getting smaller in the future, only larger. I'm concerned anytime I see something that might contribute to reinforcing the perception among some consumers that music has no value and should be free. Any time a musician/artist in effect "gives away" his/her music/art, I am concerned how it affects other musicians/artists who don't wish to do so.

[rcannonp]

I would be interested to see if the band itself releases any numbers. That study seems a little shaky.

[monkey man]

Imagine how much "cheaper" they'd have been if they weren't already (mostly) fans of the band or at least had heard of them/their reputation?

Gives me a queezy feelin' in my gut.

[OldTimey]

Is it likely that the band would have made $2,700,000 if they were still with EMI and sold 1,200,000 cds? More? Less?

over the course of a year maybe. their most highly anticipated album, 2000's Kid A, sold about 200,000 in it's first week. it took significantly longer to go platinum.

i still think it was the right move on their part. a tremendous number of people who would NOT have bought their record anyway was enticed to listen to the music. this will increase turnout at their shows (which are usually un-godly cheap for such a big-name act, i've never spent more than 40 dollars on a ticket to see Radiohead...front&center).

they stopped their album from being leaked, by leaking it themselves, and im sure they made a nice chunk of change from the 1/3 of people who did pay (no record labels in the mix remember)

[James Steele]

Yeah... but isn't it a shame that bands are increasingly having to be in the "T-Shirt business" to make a good living?

[rcannonp]

I think that the pay what you want thing is sort of a gimmick. The real interesting part of it is that they did it themselves, without a label. I'll bet that more and more big name acts will start going straight to the fans. I could also see websites popping up that act as a sort of web agent for less established bands, especially as the demand for CDs dwindles.

[Resonant Alien]

I have a couple of thoughts about this.

On one hand, I am a little reluctant to make a judgement on the character of the people that chose not to pay. Radiohead did, after all, tell them it was "OK" not to pay anything. I understand (and share BTW) the sentiment that people should "chip in" something, even if the band said it was OK to take it for free. However, the band did offer it for free, so you really can't blame people for taking them up on the offer. In a way it's kind of like the free concerts some bands give from time to time. If the band offers a free concert, they shouldn't be surprised if no one chips into the tip jar. Or another example, like when you win an iTunes download from you Diet Pepsi cap - should you feel guilty about cashing it in? It is a grey area for sure.

Something else I am no sure of are the true statistics. 62% downloaded the tunes for free. OK. The interesting part to me would be a correlation between how many people who download the mp3 for free subsequently buy the $80 box set they are putting out. I could easily see that happening - someone wants the mp3 while they are waiting for the box set to come out, so they download the tunes without paying under the theory that they will be buying the box set later, so why would they also pay for the downloads.....logical.

On the other hand, I do share James' concern about what this does to OTHER artists. OK, so Radiohead gives away their downloads - big deal.......for them. But does this set up the expectation that ALL bands should be giving away downloads, and then what?

I have been thinking about this for a while since they posted it last month, trying to figure out my own theories about why they did this. One idea; by giving away the low-fi graphic-free mp3 versions, yet offering a cool box set package, maybe they are trying to highlight the real value of the CD package and shift the value proposition away from selling vapor back to selling a real product - i.e. listening to the banter nowadays, you get the feeling that people place the same value on an mp3 as they do a CD, even though the CD offers higher quality and a better alll around experience. If more artists put more thought into their CDs and CD packaging, offered special unique features only available with the CD, would more consumers be inclined to actually buy the CD instead of buying or stealing the mp3? Certainly some consumers wouldn't care. However, I believe a lot of consumers would. Rather than continuing the perception that the mp3 is equivalent to the CD, maybe they are trying to change the perception so that the mp3 is viewed as a poor, although necessary, substitute for the 'real' product.

Maybe they disagree with the way the RIAA is going after kids and parents of kids who illegally download. No one agrees with piracy, especially musicians, but lots of people who disagree with piracy also think that fining 12 year olds hundreds of thousands of dollars or putting them in juvie programs is not the correct solution. By offering their mp3 for free, it sets up an interesting legal dilemma. Let's say some kid gets caught with a Radiohead mp3 that they "illeagally" downloaded from some file sharing site. Well, since the mp3 was free to begin with, they can't really say the kid stole the mp3, so they can't really legally do anything about it.

Maybe they hate iTunes.....there is some issue there since none of their catalog is there.

Maybe they believe that bands needs to stop worrying about making money selling mp3 files and focus on the other aspects like improving the value proposition of CDs, DVDs and touring (I'm not saying I believe this, just offering a theory).....when you have sites that offer unlimited downloads for $5 a month or whatever, you have to wonder just how much money an artist actually makes selling downloads anyway (I'm asking, I have no idea) - artists do seem to take away a decent percentage from iTunes, but it's these other sites like Rhapsody that I wonder about.

There is a paradigm shift coming, but I believe musicians will adapt. Maybe mp3s become the new radio airplay conceptually - i.e. today artists do get paid via ASCAP or BMI for spins on radio, but in most cases, this revenue makes up a small share of their money. Other than the "on-demand" nature of having an mp3 loaded on your iPod and being able to listen to it whenever you want, in a very basic way, mp3 files and radio airplay are pretty much the same - you get to listen to a low quality version of the tune and you have no real artwork or visual experience to go along with it (ok, so you do have very small digital artwork on iPods today, but it is not the same thing). Maybe mp3s become like 'teasers' that entice people to spend money in other ways on the bands.

Sorry for the long-winded response (wow, almost as long as some of Shooshie's posts )...this is a very interesting topic.

[James Steele]

Yes, very interesting trying to make sense of where things are going. I wish I had more time to discuss it now... maybe later.

BTW, I don't mean to say anything about the "character" of the people who didn't pay. As you point out... that was an option given to them by the band. What it confirms though is most people are... ummm... "frugal" "thrifty"... and whatever euphemisms you want to name.

Back when I was playing in a band locally, everybody loved us, but everybody thought they were a "friend" of the band (due largely to my exhaustive outreach-- I never got a "band break" with the rest of the guys, but was always out blackslapping and shaking hands). Familiarity bred contempt and pretty soon everyone felt "entitled" to FREE stuff. A free T-shirt, free Beer koozie, free shot glass... etc, etc.

There's also that whole issue of perceived value and this is something new artists have to struggle with philosophically. If you start right out of the gate giving away your music, at what point do you turn to your fans and say "Hey... I really need $10 for this CD?" Or "I need .99 for this download?" Once you start giving your music away, you risk creating the perception that your music is just the same and no more special than all the other struggling bands giving away downloads.

On my MySpace page downloading has never been an option. (Partially due to the horrible quality that results from MySpace further compressing files.) On those occasions that people can download (from my site), I try to get something in exchange... at the very least an email address so I can add them to my email list (currently over 5,000 subscribers).

Bottom line here is that musicians who wish to someday pay the bills with their music, need to start thinking about ways to create revenue streams from day one.

[SixStringGeek]

I haven't really stopped to analyze whether the band came out ahead financially in the short term or not. Granted, there were no packaging costs and all the rest, just digital download. And they are no doubt keeping more per CD. So I don't know... MAYBE they made more money themselves this way?

All I see that was interesting is that 62% chose not to pay anything and I don't see that percentage ever getting smaller in the future, only larger. I'm concerned anytime I see something that might contribute to reinforcing the perception among some consumers that music has no value and should be free. Any time a musician/artist in effect "gives away" his/her music/art, I am concerned how it affects other musicians/artists who don't wish to do so.

I have a theory that the 62% who didn't pay wouldn't have bought it anyway. For some people, music is like warez. Just trading cards. Some people are packrats and just fill up their hard disk with everything they can get their hands on. Are they listening to it? Are they enjoying it? Are they even fans or did they just download it to see if they could?

FWIW, I'm not a Radiohead fan, I have no idea what they sound like, but I did try to download a copy to see if would be something I would like to own - I did not succeed in getting through their crummy website and lost patience - but I would have paid zero just because I hadn't heard any of it before and there were no clips posted on the site (dumb dumb dumb). If I had liked it, I would probably have gone back and paid something - thus amounting to a second download and this, I suspect would cut the "average" payment in half.

More data points.

[Resonant Alien]

I have a theory that the 62% who didn't pay wouldn't have bought it anyway. For some people, music is like warez. Just trading cards. Some people are packrats and just fill up their hard disk with everything they can get their hands on. Are they listening to it? Are they enjoying it? Are they even fans or did they just download it to see if they could?

I think you are partially right - I am sure that at least some (maybe even a majority) of the people who took it for free wouldn't have downloaded it anyway, but did because it was free.....I kind of see that e.g. with free plugins....how many of us have plugins on our system that we downloaded mainly because they were free? I would probably not have paid to have MonstaChorus, but since it was free, I have it. It is another angle.


JAMES - FWIW, I totally agree with everything in your last post. I have always (and still hope) that I can make a little money with downloads of my tunes - I have made a modest amount through iTunes and a few other sites, but it's not anything I would call a significant source of income. My ramblings are probably a lot of me thinking out loud and trying to make sense of it all, and trying to figure out what is the new paradigm. I would love nothing more than to give up my day job and be a full time pro musician, so I guess part of this is me trying to figure out what is going on and how I can adapt to that.

Cheers.

[mhschmieder]

I can't remember if it was one of the two books called "The Future of Music", or another similar diatribe (whether published as a book or as an article in a magazine), but I remember reading an in-depth argument of why recorded music should be free, a year or so ago, and almost coming to agree with the writer by the end of it all (not the same thing as supporting illegal downloading or stealing, by the way).

The author proposed that money should be made from concerts and tours and t-shirts/etc., and argued that historically recordings weren't where the money was (except for a blip in time from maybe the late 60's through mid 80's or so), and that royalties are so often withheld or so small (for recordings, NOT for songwriting which pays out much more), that it's better to have more people hearing the music and being psyched to go to the live concerts.

There are a lot of flaws in any argument like that that proposes that one shoe fits all (many arguments neigther scale up nor down in scope). But it is food for thought (and I'll see if I can find the reference).

I have a feeling Radiohead read that and decided to experiment to see what would happen, figuring they would likely still come out ahead even if the principle did not prove tantalising for further experimentation.

I personally would not take a "pay what you feel it's worth" as license to not pay at all -- IF I liked what I heard. But I doubt 62% didn't like it . I generally pay the voluntary suggested charge for shareware, and feel that such situations with digital content should be treated similarly if one has any ethics whatsoever.

[Phil O]

Do you think Radiohead would have made out better if they had just made it available for download at a substantially reduced price? Sell it this way: "We didn't have to manufacture CDs, we're not paying a huge percentage to the record company, and we're selling direct, so we can give it to you for..." Would those 62% even bother? I think the key here is to test some of these approaches and see what works, and get to know the downloading market better. Perhaps as mhschmieder says, for Radiohead this was just a test. I dunno, I'm just speculating.

Phil

[Jim]

The author proposed that money should be made from concerts and tours and t-shirts/etc., and argued that historically recordings weren't where the money was (except for a blip in time from maybe the late 60's through mid 80's or so), and that royalties are so often withheld or so small (for recordings, NOT for songwriting which pays out much more), that it's better to have more people hearing the music and being psyched to go to the live concerts.

Unfortunately, that doesn't work for musician/producers who do their jumbo recordings via layers, and can't possibly take their acts on the road, because there is no live act.