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Summary:

The first concrete analysis of Radiohead’s innovative pay-what-you-like plan for latest album In Rainbows shows thirty-eight percent of thos…

The first concrete analysis of Radiohead’s innovative pay-what-you-like plan for latest album In Rainbows shows thirty-eight percent of those who downloaded the title indeed chose to pay something, while 62 percent kept their change in their pocket. ComScore (NSDQ: SCOR) data (via release) shows 1.2 million people visited the site in the first 29 days of October (it was launched at the start of the month).

The average price paid was $6 on a globalized basis but Americans were more generous, coughing up $8.05 – factor in the freeloaders, however, and it’s more like an average $2.26 on a worldwide basis and $3.23 from Americans. The most common amount offered was below $4, but 12 percent were willing to pay between $8 and $12, around the typical cost of an album from iTunes. More at our sister site paidContent.co.uk.

EMI-RadioHead: Meanwhile, Radiohead continues to mesh tech with music and marketing. In addition to a new boxed set, the band and EMI label Parlophone are selling the full back catalog on a 4Gb USB stick in CD -quality WAV files with digital artwork — and the stick is in the shape of the Radiohead bear. It’s an online exclusive. Also, the box set comes with streaming rights for special footage.

  1. No way to return the product if unsatisfactory (i.e., if you don't like the music) — could be one small factor in consumers' underpayment?

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  2. i downloaded their album for free… Gotta say, I love their album and sort of regret somewhat i didn't pay for it. If they ever come to town, i'm definately gonna go see them.

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  3. As Erin says, it's more about laying the groundwork for the real payday – live show and merch sales. The music itself is really a promotional tool at this point, structured to incentivize the listener to see Radiohead live and buy something of theirs at the show. Brilliant formula.

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  4. Staci D. Kramer Wednesday, November 7, 2007

    For Erin … if they gave you an option to pay after the fact, would you? Maybe this is another model to try .. pay after you listen.

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  5. I would have paid for the album if their website took AmEx, which offers excellent fraud protection. I didn't feel like inputting my vulnerable debit card number for an online transaction.

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  6. Let's not overlook the fact that they have very little overhead (fees from the credit card companies and the cost of running the web site), and they're keeping 100% of the profits. If every one of the 1.2 million visitors downloaded the album, they still made well over $2,000,000. I wonder how that compares to what they'd make with a label.

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  7. Nevermind, I found the answer at the bottom of this article:

    http://www.rollingstone.com/news/story/6558540/walmart_wants_10_cds

    $1.60 in royalties for every CD sold. So even if all 1.2 million people shelled out $15 for a store-bought CD, the band would still be getting less than $2 million from the sale.

    (Of course, this isn't taking into consideration any "record deal" they might've gotten money from, and the promotional advantages, advertising, etc. But when you're Radiohead, do you really need that anymore?)

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  8. I think JS is making a very good point here. Also, lets not forget that not all of the 1.2 million people who downloaded the CD would have necessarily bought the CD if the option to download was not available. Chances are that if they aren't willing to pay anything to download they also wouldn't be willing to pay for the CD.

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  9. Does this take into account the people that paid the $82 for the discbox or just people that paid for the digital download?

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  10. There is a way to pay for the album after the fact. Just order it again and now you have two digital copies– you can delete the other one.

    On another note, I don't consider the a failure. Of course most people will react selfishly and not pay anything because they are used to a different model. If more groups start trying this, it may be more acceptable, and might even become a social norm. Given the circumstances, I think the figures are actually high. I would expect fewer people to pay for. In the end it will average out for the band because standard loyalties are so low. Anything do undermine the traditional recording business model is good in my books.

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