How Do We Make Money? Volume.
There was an old Saturday Night Live fake ad about some bank whose sole function was to make change. The spoof had the mixture of trustworthiness and responsiveness that is the hallmark of most ads for financial institutions, right down to the founder who, when asked how he could make money solely making change, responded in an eager tone, "Volume."
The ad came to mind as I pondered Radiohead's decision to release its new album, In Rainbows, as a digital (DRM-free) download on Tuesday, October 10th, just 10 days after announcing it. (There's a deluxe boxset to be released in December, with a physical version of the regular CD scheduled for sometime in 2008.)
There are probably countless bands who are giving away music for free, but none with 1% of the popularity of Radiohead. If you go to the site and ask to buy the download, you can indeed enter "0" as your desired price of the digital download of the album. But Radiohead is probably banking on the goodwill of its fans and the interest of other music fans to generate a fair amount of change.
Other music fans like me. I'm not alone in saying OK Computer is one of the best albums of the past 10 years, but most of the rest of Radiohead's post-OK work has left me cold. So it's safe to say that if In Rainbows was appearing at my local record store in a physical format next week, I would not be picking it up. Nor would I be scouring a bunch of torrent sites looking to download it for free -- it's just not what I do.
But this morning I went to the site and put down 2 British pounds (about $4 US) plus about a $1 service charge to download it next week. Why? Well, in part it's the musical equivalent of playing the Powerball lottery -- I always viewed $1 I paid when the pot got large and the office collected as entertainment, not as investment. This is much the same, no? It's also part of the giddy glee in helping to make major label executives nervous about whether they can continue business as usual.
So here are my questions to you:
1) Was I too cheap? A kids' musician e-mailed me last night saying he'd put down $10 -- a dollar a song. But I think he's a bigger fan than I am. It might be cheap, but $4 is $4 more than Radiohead would have received from me in the absence of this experiment. But if Spoon did something similar with their next album, I guarantee I'd've put down $10. Maybe more.
2) Is this a model that can at all work in the kids' genre? I've always pooh-poohed the idea of digital downloads because I think kids like the physicality of things, and mp3s don't have a lot of physicality, know what I mean? But if somebody like, say, Dan Zanes did something similar, I think he'd probably make a fair amount of change. (Though I'd certainly miss the album packaging, which has always been top-notch with his work.) Of course, he's already reaping all the profit from his CDs, something that Radiohead, while they were on a label, did not, so perhaps his incentives to do so is less...
Readers, musicians, thoughts?
Comments
I'm not alone in saying OK Computer is one of the best albums of the past 10 years, but most of the rest of Radiohead's post-OK work has left me cold.
Exactly what I was thinking. I lost interest in Radiohead after Kid A. OK Computer was such perfection, but I just can't enjoy anything they've done since then.
So, I wasn't at all interested in their new CD until I heard about this offer. They may just regain a fan.
Posted by: Phil | October 2, 2007 09:15 PM
I'm on the exact same page. My husband and I were just discussing this yesterday. We decided that we will pay $5 for the Radiohead album. Like you, I think OK Computer is insanely great, but I haven't been completely in love with their recent stuff. If I walked into a record store and saw their new album for $10-15, I wouldn't pick it up. But it's worth a $5 gamble.
Again, $5 more than they would have made from me if they went with a normal price scheme. I think "take a chance" customers like you and me could add up. Now the key is that if the new album is *great*, I will consider paying more for the next one. And I might tell my friends & blog readers that they should take a gamble too. If the music is consistently good, I do think this could be a sustainable model.
And I think it could work in the kids' genre. It could be a chance to grow a bigger audience. And I think there are some people (myself included) who would consider paying *more* than the traditional amount if it was for an artist they really love and want to support.
Posted by: Josephine Cameron | October 3, 2007 08:16 AM
I've been following this with great interest. One thing I haven't been able to find out: does Radiohead get 100% of the sales from the downloads except the $1 service charge? If so, even if people buy it for $4 like you did, they'll make out like bandits when you compare it to their cut from a record company issued CD.
I also saw where Bob Mould is exploring this. He wants to basically cut the record companies out of the equation and let his fans pay for the recording time. He polled his fans wanting to know if they'd rather pay $20-40 a year for all downloads, $1-$2 per song, or $10-$20 per each CD. The annual fee of $40 is currently leading the pack.
Now, how all of this relates to kids' music is an interesting question. I think this model will only be successful for artists with decent sales or a built-in fan base. So while I could see Laurie Berkner or Dan Zanes successful in the name-your-own-pricing ring, I doubt many up-and-comers would have success.
I never got Radiohead.
Posted by: Chag | October 3, 2007 10:03 AM
Some thoughts on the matter...
First, I think it's a shame that the physical product by which music has been traditionally delivered is disappearing. I'm sitting in a room with hundreds of vinyl records (which belong to my roommate) and there is something endearing and lovely about "holding" a recording. I think one treasures the product more that way then an imaginary mp3. That said, I can't imagine the CD will still be a viable product in 10 years. I feel confident that the trend towards convenience, portability, smallness, and 'store-free' delivery will continue to shape the industry. Doesn't it seem inevitable that in the near future some device will allow access to nearly all music, movies, tv, etc?
Second, as far as the children's music industry is concerned it is my understanding that the most successful bands (in business terms) are those who create brands with a variety of products, images, interactive activities, videos, blogs, websites, live shows, etc. I believe that what musicians should pursue (children's performers and otherwise) is targeting a tribe of engaged fans who want to be involved in every angle or detail of the band possible. In other words, the future of successful bands depends on selling their brand (identity) to fans. There are a million ways to make money from a fan -selling CD's being just the most obvious one. If a band were convinced that the free distribution of their music could spawn dedicated followers -then it would be a better investment to give the recording away (or ask purchasers to name a price), and then embrace them in the legion of other activities, products, and service you make available. With affordable recording (not to mention video production) so accessible, creative groups could produce a vast amount of content -which has a greater chance of hooking an authentic fan (one who would buy the product after coming to the show, time and time again). Further, parents are at times regarded as more affluent and morally guided then pirating, 20 year olds -and could be convinced that they were supporting a product they believed was a valuable addition into their lives and the lives of their children. Then they are HAPPY to be exchanging money for something they love.
Third, I adore the Radiohead catalog -but if a band offers their music at any price, then there is no price too cheap. I'd sleep easy at night.
And this is why I don't often post comments. My bad habit of rambling...and here I am just getting warmed up. I'm cut off. Done!
Posted by: Adam | April 3, 2008 05:23 PM