I just saw this NYT article about the new Radiohead album, "In Rainbow." Apparently, the album will be available on October 10th, and you can download it from the band's website. The price is - here is the kicker - whatever you want it to be!
This is mind-blowing on so many levels. First off, Radiohead has to be one of the most innovative bands ever, and their new album promises to be incredible. I know this because I've downloaded most of the new set they were playing live on tour last year and, even in the raw form, its amazing stuff.
Second, their pricing and distribution scheme is absolutely revolutionary. Here is an excerpt from the Times piece:
There is no maximum price, nor any other guidance, setting up what is may be the biggest experiment in digital-era music-industry pricing to date. What are people willing to pay for music? How many will pay full price? How will the average price compare to what a typical record company would likely have charged? Will people pirate it anyway?
I would love to talk more in depth about the economics of this here, but I just found out I was beaten to it: Tyler Cowen at the Marginal Revolution gives his thoughts on this new scheme here. No worries: Radiohead and econ in the same morning? Rad.
Just a few weeks ago, I saw a report that Radiohead was finished with the new album and was looking to release it mid-2008 upon finding a new label. But I knew that was bogus because, for quite some time, frontman Thom Yorke has been talking about how he wanted to use the internet as a means of music dissemination. And I was right. Three cheers to Radiohead:
Cheer 1) Your music rocks
Cheer 2) Way to embrace the digital age
Cheer 3) You just made the rest of my 2007.
So I have some questions for you readers:
1) Are you a Radiohead fan?
2) How much would you actually dish out for the new album?
Your comments on this post are so important that I will randomly choose one of them to win a hitherto unnamed prize.
Finally, I whole-heartedly thank Wisconsin-ite Nick Rhodes for putting me on to Radiohead. Nick has great taste in music, and somehow everything he does has instant street-cred. He's good people.
8 comments:
This just in: Levitt at the freaknomics blog discusses radiohead as well...he even wants to gather sales data and use that to do some economics!
http://freakonomics.blogs.nytimes.com/2007/10/02/how-much-do-you-think-paul-feldman-will-pay-for-the-new-radiohead-album/#comments
Mr. Freaknomics collaborating with Radiohead...thats just amazing. What a significant morning this has been!
1) yes
2) i'm not sure how much i would pay for a new radiohead album; i think my demand for their music is pretty inelastic. i will pay $10.
3) is levitt serious? who would actually view a freakonomics tshirt as an incentive to hook radiohead up with levitt? it's probably only in size xl and made by fruit of the loom. he may as well have offered some moldy bread. if he has qualms about offering something that is actually of value (i highly doubt that a radiohead insider will find a freakonomics tshirt very valuable), then he should have offered nothing.
To atheen's cousins:
You shouldn't be reading this junk. You are getting dumber by reading this.
Nick Rhodes is good people!
I don't listen to Radiohead, thought the few tracks I've heard are good. I buy albums at band's shows for $12-14, typically, in which case more of the money goes to the band. I suppose I'd pay $5 for the new Radiohead, though I'd probably try to preview some tracks first.
Huh. And your cousins should be reading this. Well, this comment's pretty worthless. But the blog's quite good.
I did some further analysis on this using Hitwise Internet usage data here: http://weblogs.hitwise.com/robin-goad/2007/10/radiohead_freakonomics_and_fre_1.html
The main finding was that the people downloading the album from Radiohead's site are not the same sort of people who download from stuff for free from the file sharing sites. This could mean one of two things for Radiohead - either they've managed to tap into the market of people who are willing to pay for the content and the honour systmem will see them good; or they've just started giving their music away for free to the very people that are usually prepared to pay for it. Hopefully Radiohead will release some data from this experiment and we'll see which is true!
Robin Goad
Research Director, Hitwise
Robin,
Its really interesting that the market for songs is segmented along the lines of those who download for free and those who are willing to pay and abide by the honor system. The guys at Marginalrevolution have put out a reader poll and the results of that show that there are a TON of people who are paying non-zero (or non-0.01) prices for the album. Many of them claim to be paying for the originality of the marketing idea.
http://www.marginalrevolution.com/marginalrevolution/2007/10/mr-readers-poll.html
So perhaps the first possible outcome you list is the one that is being realized: the honor system is seeing them good.
If it is the novelty of the sales idea that is generating revenue, what will happen to subsequent "pay-what you want" sales?
Thanks for the comment!
Atheen
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