Study: Free beats fee for Radiohead's 'In Rainbows'
LAST UPDATE: 3:54 p.m. PT--Those who predicted that Radiohead would see mass financial support after allowing fans to pay whatever they wanted for the band's latest album appear to have been a tad optimistic, according to a study released Monday.
Of those who downloaded Radiohead's digital album, In Rainbows last month, about 62 percent walked away with the music without paying a cent, reported ComScore, an Internet research company.
About 17 percent plunked down between a penny and $4, far below the $12 and $15 retail price of a CD. The next largest group (12 percent) was willing to pay between $8 and $12--the cost of most albums at Apple's iTunes is $9.99. They were followed by the 6 percent who paid between $4.01 and $8 and 4 percent coughed up between $12 and $20.
Last month, Radiohead, one of the world's most recognized music acts, thrilled fans across the globe by giving them the option of paying whatever they wanted to obtain a digital copy of In Rainbows.
Music blogs lit up with excitement. Pundits crowed that the file-sharing crowd would prove that they weren't really just free loaders by happily supporting artists who had walked away from the labels. That appears not to have happened by and large.
But an important question still unanswered is whether the band is making any money. While Radiohead is believed to have had to pay the costs that go with distributing music online, the group also didn't have to share revenue with a record company.
Chris Castle, a long-time music attorney and record executive, cautions that it's way too early to try and assess whether Radiohead's experiment has failed or not.
Castle, who has represented singer Sheryl Crow and worked for A&M Records, said that the money-generating lifespan of an album can last as long as two years. It starts when an act releases a record and is extended when the performer goes on a concert tour.
The real question, Castle said, is whether Radiohead can equal the same kind of money it made when it was still making records for music company EMI.
Castle offered an educated guess about what the British band was earning at the label. He figures that in every year a Radiohead album was released, it was EMI's top-selling record. The band likely negotiated a larger royalty rate than most performers earn.
He guessed that when royalties were combined with money earned from publishing, Radiohead saw between $3 and $5 for every album sale.
Castle also estimates that the band typically sold between 3 and 4 million units worldwide. That would mean Radiohead hauled in between $9 million and $20 million per album. An EMI spokeswoman declined to comment for this story.
If Castle is right about the band's cut, then the money it received from letting fans pay may not have been a huge drop. According to ComScore, the average amount spent for all downloads came to $2.26.
Castle also said that not only is it too soon to try and measure Radiohead's success, but that they are not a good band to use as a test case. The group is a phenomenon with an enormous following and not all acts will see the same success by going independent.
"I may not agree with what they are doing but I think people should respect what the artist wants," Castle said. "If they want to give their music away, let them."
Radiohead's experiment with a different business model may benefit the entire music industry if record executives can learn from it, according to Castle.
"I think if we had done this kind of thing a long time ago," Castle said, "we'd all be better off."
Already, Radiohead's promotion has given rise to similar offerings from other bands. Last week, rapper Saul Williams released the album The Inevitable Rise and Liberation of NiggyTardust. Williams gave fans the option of obtaining the music for free or for a $5 donation.
An important difference between the offers of Williams and Radiohead is that those who paid for Williams' music received songs at higher bit rates and thus better quality.
Trent Reznor, the front man for Nine Inch Nails, produced NiggyTardust, and he offered kudos to Radiohead for experimenting with a new business model.
"I think there were some serious flaws with how they executed," Reznor said in an interview with CNET News.com last week, "but it was a good idea."
Coincidentally, on the same day that ComScore released Radiohead numbers, EMI announced that it was releasing the group's first six studio albums and one live album in several formats including uncompressed WAV files.
The WAV files come on a USB drive and goes for $167.
Greg Sandoval covers media and digital entertainment for CNET News. He is a former reporter for The Washington Post and the Los Angeles Times. E-mail Greg, or follow him on Twitter at http://twitter.com/sandoCNET. 
They were in the news for giving the finger to the RIAA, and many people who were not radio head fans, went to look for it.
Also, because of the nature of failed downloads, and people having computers in multiple locations...they may download it more than once, but of course, they wouldn't pay for it more than once.
Very high percentage. The real question though, is did they make more money overall, than otherwise. Probably.
determine the value of an artist's work. It would have been a
more sound business model to offer the downloadable only
tunes for a price far below what the record companies would
price a comparable cd at. Perhaps a price of $4.99-6.99 would
have provided a more realistic approach to generating notable
income off of a new release. That is still more then 5 to 7 times
what they would have received from the record label. My
research indicates that most artists only recieve about $1 from
most CD sales.
Time to wake up and realize that free-market capitalism does
not mean FREE! It's no suprise to me that most kids out there
that have little or no regard for artist's to make a living would
opt to pay nothing or pennies in some cases. That is a total slap
in the face of the artist saying that their hard work and creativity
is worthLESS. Think about it!
Another point about a fair salary; even if we assume that the 4 million real fans would "only" pay 2.29$ for the album, that still makes 9.160.000$. Before we assume that this does not constitute a fair salary, I want someone to prove that the costs are higher and cannot provide them with food and shelter, that the publicity it gives does not influence their sold out concerts providing them with yet more(fair?)income and that it degrades them or the value of their music.
After this, lets talk about the fair salary of an exploited immigrant, or a single mom working 3 different jobs getting evicted from her home as she can't make enough pay monthly to provide shelter and feed her children, she who would earn those 9.160.000$ in "only" 643 years working every single day of the week (5$/hour, 8h/day)... who's degraded now?
I do believe that lots of folks are willing to pay a reasonable amount rather than go picking through back-alleys to find what they want. It's the convenience factor. By the same token though, the internet is very cumbersome when it comes to transactions. Has anyone considered that? To log on, submit credit card #'s, screw up the form, try again, why it's easier and more convenient to share files or steal it when the chance arises. Online marketing needs more conveniences. Maybe that's where subscription comes in.
You have -nothing- to base your assertion on. 38% could be incredibly, hugely high.
And as rdupuy11 noted, all that matters is whether the band makes more money or less this way, not the percentage of people who pay.
I don't think the Radiohead experiment is over. Some of those 3 out of 5 will come back and pay.
And another thing, where did these stats come from? I've heard about 5 different surveys since the release of this cd, all claiming different things. Until Radiohead releases the data themselves, I don't believe any of these "surveys" or "studies".
If the bit rate would have been higher, say V0 or 320, I would have paid more.
I absolutely love the album. While it doesn't have any tracks that stand out like on The Bends and OK Computer, every song is still great. I think I clocked in about 1500 listens on Last.FM with it :)
38% paid for the album
17% paid $0.01-$4
12% paid $8 and $12
That still leaves 9% unaccounted for. Did they pay between $4 and $8? Or did they pay more?
Without some meaningful information (ie total revenue, number of total paid downloads, etc) this is periphery information that tells us nothing about the success of Radiohead's project from a financial standpoint.
Okay, so more people downloaded the album for free than who were willing to pay for it. But in a volunteer system, isn't it remarkable that 38% were willing to pay *when they didn't have to pay anything*??
bought a previous download.
Or how many downloads vs the total of a cd sale.
This would drastically effect the $2.66 average
That is the question that seems to go unanswered here.
/P
does this study show individual MAC addresses or even IP addresses.
I'm sure some people downloaded and went "meh" and then trashed the the songs or kept the one track they liked.
All these RADIOHEAD "Studies" always have a negative tone to them trying to show the consumer as some sort of GREEDY thing, there are still many people who don't know this stuff exist, It also assumes that everyone who went to site was a fan.
If it was centralized, easier to use, with a listen then decide, along with some sort of moral/selfish altruism line about "you pay = we make music, no pay = no more music" heck chalk that next to a "real" charity line like "1/3 of proceeds go the artists' favorite {insert one} charity".
ALSO SELL LOTS OF SWAG, I LOVE SWAG!
The 1.2 million 'sales' of this copy, include only 38% paid copies, or about 456,000 copies...a 50% increase over last time.
Now the payment ranged from very little, to more than the retail price. But, the average payment, according to the figures, is much higher than the royalty RadioHead would have gotten from EMI.
So better payment per album than you would have gotten from EMI, on sales of 450,000 vs. 300,000...and this is only the first week.
Fantastic success. of course, some people with a vested interest in seeing middlemen scrape the profits for themselves....they don't see it that way, and they have a reason for not seeing it that way.
However, instead of doing that the stupid consumers decided to send another message. Even when given the opertunity to pay a fair price they will basically steal anyways. Now technically they didn't but the vast majority of them didn't pay a fair price either.
This whole thing wasn't about the music, the quality of it, the number of tracks or anything it. It was an opertunity for all of those saying the recording industry is greedy to let the recording industry know what consumers felt was a fair price for an album of songs. But, now the recording industry knows that what they are doing and how they are handling piracy is right on because consumers by and large don't want to pay anything which to them explains the stealing and justifies their lawsuit activity.
Good job consumers. Nice message. Now you all deserve to get whatever the recording industry slides up your hind end. What a message you sent.
Robert
I think that's a bit of a stretch. Do most people remember any Radiohead song since Creep from 1992?
On a side note, doesn't the lead singer look like Clay Aiken? I bet If Clay tried this he would sell more copies than Radiohead.
I bought a Lali Puna CD that included the tracks as well as video files playable on computer or DVD. It was very nice to actually experience the artist(s) in some extra way.
- Radio...who?
- by DaB3at November 6, 2007 3:51 AM PST
- Seriously Radiohead's last big "woo" factor was "Creep"...back in the days when cd's were a luxuary...And they're still around?
- Like this Reply to this comment
-
Showing 1 of 2 pages (45 Comments)That been said, i have to give them props for trying out this business model, and it been a success."Success you say??"....yes SUCCESS. Even if one person bought the album online it would have been a success. Like many have said, no one forced these people to buy. Every one could have just downloaded and walked away, concious free(debateable, but not getting into that).
This was no money making scheme thought up by Radiohead members on a gloomy night. This was done to cut out the middle man...obviously, and i think that is what most of you are not seeing. It is not about profit, revenue...blah,blah,blah, its about not needing a greedy bastard *cough-EMI-cough* to realease your stuff.
I could go on forever, but i gotta go work and make a greedy bastard richer, :)
Think of how many bands would have a higher percentage.....MetallicA. Okay okay...napster, blah blah...but if you think about it, they have been around for a while and more likely a bigger fan base than Radiohead, and it would be intresting to see what their figures would be like. Or maybe a band like The Rolling Stones....you know truly rocking bands :)
k bye