Radiohead’s radical “pay what you like” experiment for their In Rainbows album shook up the industry and is already one of the biggest music biz stories of the year. But after some number crunching, reports are coming back (see this Comscore article) that the vast majority of people who downloaded the record didn’t pay squat for it. Does that mean that this idea was a flop?
If you go by the Comscore numbers, 60-64% of downloaders paid nothing for the Radiohead record, with us Yanks being slightly more generous than the rest of the world supposedly. Doesn’t sound too encouraging now, does it?
But if you keep going by their math, other numbers get crunched. Figure that of the 1.2 million people who downloaded, that around 2 out of 5 (40%) paid on average about $6 for the album (I paid about $20 myself, just as a symbolic gesture to support this model). If my calculator and basic math skills are right, that means that the band made at least about $2.8 million dollars from the downloads, though it’s estimated that they made much more than that in the end (maybe double or triple that). What’s more, this high-profile gambit even got people interested in their old albums, which are starting to get boosts now. It’s even meant that Wall Street is now souring on record labels’ future prospects too.
So even if you wanna low-ball the figure, they minted a couple of million from the downloads. That doesn’t include the people who ordered the $80 boxset set (non-negotiable) plus however many copies that they’re gonna sell next year when they actually put out a CD of the same record. In other words, ka-ching! How many acts can you think of can also say that they pocketed a couple of million dollars from one album? Usually, the only ones are the mega-stars who have huge advances as part of their contracts outside of the sales themselves- i.e. Stones, U2, Bruce- but even then, their album sales themselves don’t net them as much (though they’ll always stand to make even more from their tours). The prospect that an established band like ‘Head can make it just fine without major label support should scare the labels almost as much as the Eagles selling 700,000 copies of their latest record in one week through Walmart alone.
So in rough financial terms, the ‘Heads cleaned up pretty nicely and will mint some more piles of dough next year to boot (especially after they hit the road again too). As for the vast majority who didn’t wanna pay anything for the record, we shouldn’t be that surprised. Many of their younger fans (and some older ones too) are in the mindset that downloads aren’t something you pay for. Even working on the honor system with a band directly doesn’t necessarily make them shell out money. However, if this becomes a trend and more bands do it, it might have more luck changing attitudes than all of the stupid RIAA lawsuits that haven’t been able to stop the trend either. Other bands and labels are watching this closely to see how it pans out but so far, the ‘Head boys are looking pretty and other performers are curious enough to follow suit. Hopefully, some more music fans will also follow along and pay their way too.