Posted December 12, 2007 7:03 pm by with 10 comments

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We’ve covered the Radiohead experiment since it started. And as of Monday, the experiment is over. It did give them a lot of press, I’m not so sure it gave them a lot of cash. Normally artists aren’t the best at distribution and marketing, which is why there are middlemen. In every industry I’ve seen this usually serves both sides well.

Just three months after they started the experiment, Radiohead is going back to the traditional way of selling albums – in stores. The band let their fans decide what to pay for their new album. Some fans thought free was a great price. Radiohead didn’t give out numbers, though comScore took a stab at it. They estimated that 62 percent of those who downloaded In Rainbows didn’t pay for it.

It seems like they could sell the album on the site (which could use a redesign of the shopping process) and create a model where you had to pay a set price. But for now there are no downloads.

The music industry keeps taking one punch after another as they try to figure out something that works. Free downloads are plentiful and just like Web 2.0 business models, ad-supported seems to be the buzz. But is it sustainable?

Too bad they skipped Christmas for in-store sales. The CD/vinyl and download won’t be at stores until December 31st. No official word on if they’ll be back on iTunes. You can buy the Discbox online.

What is known (according to Wikipedia) is that they aren’t signing back on with EMI. They will go with indie labels XL Recordings in the UK and TBD Records in North America.

  • What a pity that the experiment did not work for Radiohead. I wish it had worked and that more artists had gone their way.

  • Hi Janet, fancy meeting you here.

    I’m a big fan of Radiohead, and while admittedly not an expert on their marketing strategy, it was my understanding that they were planning on selling the physical album for a set price all along, and that it was only the downloadable tracks that would be made available at an optional price to be determined by the buyer.

    Even if that’s not the case, I don’t know whether anyone but Radiohead can judge whether this is a failure or not and I’m not even sure they can make that call at this point. There still remains to be seen what effect their strategy may have on sales of Radiohead merchandise, tour tickets, etc.

    And perhaps for Radiohead the end game isn’t simply to see if they can make more money selling direct to the public than through labels. Perhaps it was just to see if they could make enough.

  • Alex -s-

    First of all – do some research first – the physical release of “in Rainbows” was always scheduled for late this year/ early next!

    The plan with “In Rainbows” was always to launch it online first, then launch it as a “real” product. In fact i was just reading how the band loved a fan mash up of one of their songs so much, they sourced the guy and added it to the in-store version of the CD.

    The fact that they decided to go with Indie label support for the release still speaks volumes for their “trust level” of the Big guys in the industry.

    I reckon it’ll still sell as well as most CD’s do – fans of the band will pay for the higher quality sound – and the moochers that got it for free off the web, well heck they would have gotten it for free off bit torrent/napster/mp3 blogs etc etc anyway.

    Failure? far from it! – financially maybe not the best results – but in terms of challenging the standard recording industry nonsense and taking a stand for their fans – huge success – not to mention the amount of (mostly favorable) publicity and new traffic it got them.

    I’m guessing they probably saw a decent movement in back catalog CD’s from all of this too – people that maybe got the new CD for low cost or no cost and hadnt really heard much of them before.

    And as for anyone that hasn’t heard or bought a Radiohead CD – shame on you all 🙂

    Merry christmas humbugs 🙂

  • Dr. Ben

    I believe you are wrong about it being a financial failure. The band refuted comScore’s findings as “rubbish” which suggests that more people paid a price than you would expect. Plus, it is FAR from a financial failure. With no middleman, the band was able to rely on its already established name to bring in revenue. I have heard estimates ranging anywhere from $60-160 million that the band netted. And might I remind you that all of that cash went directly into the bands pockets.

    The reason why it shut down is not because it wasn’t successful, but because the band always only intended it to be an experiment, an example of how things could be.

    Now would this work for any other no name indie band? Probably not, but for someone as already established as Radiohead, it seems that it did judging from the smug reaction that the band members have given to people who have estimated on the low side of their success.

  • Janet Meiners

    Thanks for the correction that it was their plan to sell the CDs in stores all along.
    First, I admire Radiohead for their experiment. We’re not really sure what success means to Radiohead.
    I wish they’d speak up in the spirit of openness that they started the experiment on. In other words, tell us how it worked out, be more transparent. Even the bidding process was a bit tough to figure out.
    Maybe that’s beside the point because the main point was to challenge the record industry.
    If making money was the focus, they should’ve started the bidding out at a set price.
    I’m reminded of a time I got a free massage. The guy giving it asked me how much I’d like to pay for a professional massage. I thought about it and answered honestly – nothing.
    How can you get mad at fans for being human? If you change the question to – how much should you pay for the download? or how much is it our album worth to you? That’s another question.
    I agree that this is an experiment for an already established band who can afford the risk. I’m sure it’s also a better strategy for launching than for driving sales after the launch.
    I’d like to see a band this big try again and this time blog about the entire process. But then again, as a blogger, I’m biased.

  • I downloaded the album, but I actually paid something for it. Not much, but still I didn’t want to take it for free.


  • I fully agree with Alex on this one. Would the people who chose not to pay really have payed for an in-store release anyway? And in addition I really don’t believe that Radiohead’s goal was to make a killing anyway. I think their wallets are in pretty good shape. They have always wanted to do things different.

  • I don’t know that we can say Radiohead’s experiment was a failure. I think there’s been too much emphasis placed on how much money they directly made from the download. I think the experiment could still end up very successful even if they never made a penny on the music itself.

    I’ve mentioned this a few times, but most artists do not make the majority of their money from record sales. They make their money from performances and other merchandising.

    Many marketers would advise giving something away for free to bring new customers into your funnel where you can market to them less expensively and sell them on more and more expensive products the deeper you can draw them into the funnel.

    I have no idea if this was Radiohead’s strategy, but why do we insist on judging them solely on the direct money the album brought in. There are so many other ways this could still be a successful marketing strategy even if 100% of the people who downloaded the music paid nothing for it.

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  • Alex -s-

    Just to bring some follow up to this interesting conversation.

    Average of $8 per CD sounds more like a sum most buyers would like to see on shelves 🙂

    I think this year will see more artists trying this route and hopefully the recording industry trying some new pricing models to finally have a competitive product on store shelves.

    I remember when CDs first came out – “The prices will drop when more people have the technology” – guess what -they didnt drop – some fatcats at Sony etc realised they were on a get rich quick scheme – and finally its looking like consumers are telling the industry that the ride is slowing down.

    (PS – what happens if we can’t add but still want to comment 😉 (sorry -i couldnt resist it)