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38% of Downloaders Paid For Radiohead Album

kdawson posted more than 6 years ago | from the fanatical-fan-base dept.

Music 562

brajesh sends us to Comscore for a followup on the earlier discussion of Radiohead making $6-$10 million on their name-your-own-cost album "In Rainbows" — with the average price paid being between $5 and $8. Comscore analyzes the numbers: "During the first 29 days of October, 1.2 million people worldwide visited the 'In Rainbows' site, with a significant percentage of visitors ultimately downloading the album. The study showed that 38 percent of global downloaders of the album willingly paid to do so, with the remaining 62 percent choosing to pay nothing... Of those who were willing to pay, the largest percentage (17 percent) paid less than $4. However, a significant percentage (12 percent) were willing to pay between $8-$12, or approximately the cost to download a typical album via iTunes, and these consumers accounted for more than half (52 percent) of all sales in dollars."

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what is radiohead? (-1, Troll)

Anonymous Coward | more than 6 years ago | (#21259283)

who is radiohead?

Re:what is radiohead? (3, Insightful)

Anonymous Coward | more than 6 years ago | (#21259323)

What is google? What is the slashdot search box, even? If you expect each story summary to give you a background on every term or group it includes, slashdot would be a pile of shit.

Re:what is radiohead? (4, Funny)

Wavicle (181176) | more than 6 years ago | (#21259637)

Yeah, what is google?

(types google into wikipedia)

Ahh, I see!

Re:what is radiohead? (0)

Anonymous Coward | more than 6 years ago | (#21259711)

so if you include a hyperlink to radiohead web site or wikipedia entry, the site would be a pile of shit?

Re:what is radiohead? (5, Funny)

geoffrobinson (109879) | more than 6 years ago | (#21259709)

They were the band that laughed at Scott Tinnerman.

So the big question is... (5, Interesting)

White Flame (1074973) | more than 6 years ago | (#21259285)

did they make more or less profit than what they would have made with the standard sales method?

Re:So the big question is... (5, Insightful)

Selfbain (624722) | more than 6 years ago | (#21259327)

I would imagine they only get 1-2 dollars per CD from a label so probably a lot more.

Re:So the big question is... (5, Funny)

grub (11606) | more than 6 years ago | (#21259387)


did they make more or less profit than what they would have made with the standard sales method?

Standard sales method:(per $)
$.53 to record company
$.27 to record execs' Mercedes fund
$.18 to record execs' cigar fund
$.02 to Radiohead.

New distribution method:(per $)
$.01 to bandwidth costs
$.99 to Radiohead

meah I made that all up.

Re:So the big question is... (1)

s.bots (1099921) | more than 6 years ago | (#21259437)

Probably disgustingly accurate. This is definitely the best way for the artists to distribute their content.

Re:So the big question is... (4, Insightful)

Richthofen80 (412488) | more than 6 years ago | (#21259779)

I mean, it might be the best way for RADIOHEAD to distribute their album, since they're already rich and can front the capital to self-distribute. They also got a ton of free publicity due to the novel business model. They also had a ton of existing fans who were waiting for this.

But if you're the next great band, and no one knows who you are, you might want the label to push your product for you, while you focus on just making the music and touring.

If it were really that simple, everyone would be doing it.

Re:So the big question is... (2, Insightful)

Goffee71 (628501) | more than 6 years ago | (#21259453)

I think the point is they get 100% of the money from any sales and control over their work, rather than the few cents/yen/whatever they'd get from a record company... I paid a couple of quid for it because a) I don't know much Radiohead stuff but b) want more acts to release music this way... Sure you can only do this if you have a decent fan base, perhaps the next act will put a minimum £/$2 price on it to discourage the freeloaders/guarantee some income but its got to be better than rushing a record for release and for the label to screw you over and having to do all the marketing crap they demand... "Yeah I'm real excited to be here at Radio Alaska/Guam/Telford/Dresden..." When that time could be spent making more/better music.

Re:So the big question is... (1)

MightyMartian (840721) | more than 6 years ago | (#21259593)

Well they don't get 100%, that's for sure. There are hosting costs, and I'm sure, because they are giving away an album's worth of MP3s, there's going to be bandwidth overhead. There's administration of the site, not to mention the usual things like legal and accounting fees. I'm sure they got to keep a good deal greater piece of the pie than if they had gone through normal distribution channels, but it would be impossible to make 100%. I'd wager they'd be lucky if, past all costs, they made 75%.

Re:So the big question is... (1)

timmarhy (659436) | more than 6 years ago | (#21259755)

bandwidth costs fuck all. seriously i can rent a server with 100gig/mo limit for $69/mo including the hardware.... so i'm guessing bandwidth and hardware costs were just a side note, lets be generous and say $10,000.

in addition to that they probably had to fork over that much again to someone to manage the site and it's cc gateway etc etc. then i'm sure there would have been many misc costs i don't know about, but it'd be a pretty good guess to say it cost them $100,000USD.

2 things about that. firstly they made a hell of a profit, secondly they made a hell of a profit.

sure it's because their a well known band, but the internet is a cheap way for new bands to break in.

Re:So the big question is... (2, Interesting)

LWATCDR (28044) | more than 6 years ago | (#21259485)

Well six+ million dollars from a single album isn't too bad. Most bands probably make less then $2 per album so that would be three million albums sold.
I have never heard anything by RadioHead. I almost want to download the a song or two and if I like them then pay for the album. The downside is I would be counted as both a no pay and as a pay.

Re:So the big question is... (2, Interesting)

TheLostSamurai (1051736) | more than 6 years ago | (#21259605)

The downside is I would be counted as both a no pay and as a pay.
Which points out another glaring problem with these statistics. How many people downloaded the album just to try it out then later decided it was worth a few bucks and went back to pay for it?

Re:So the big question is... (1)

djcinsb (169909) | more than 6 years ago | (#21259745)

Yes, that piece of the statistics is certainly problematic. But the real point here is that the artists actually get to see a significant return on their work that would otherwise go into the coffers of the recording execs. The quoted numbers ($6 to $10 million) sound like a lot more than they'd see using traditional methods, unless they are a lot better known than it appears from the /. messages. (I haven't heard of them before, but they aren't in a genre I typically listen to.)

Unfair to music company execs. (5, Funny)

Anonymous Coward | more than 6 years ago | (#21259291)


I really don't think it's fair that Radiohead is just giving it away over the internet... Record companies put in a lot of hard work and effort to make a band successful, and I think it's really dishonest to just cut them out like that.

Perhaps its time the government did something about it, before the record industry starts losing even more revenue and therefore jobs.

FUD (1, Interesting)

binarybum (468664) | more than 6 years ago | (#21259489)

yeah, you and this guy should get together and toss up a nice big FUD salad.

"It doesn't bode well for the future of the music industry," says Michael Laskow, CEO of TAXI, the world's leading independent A&R (Artist and Repertoire) company. "Radiohead has been bankrolled by their former label for the last 15 years. They've built a fan base in the millions with their label, and now they're able to cash in on that fan base with none of the income or profit going to the label this time around. That's great for the band and for fans who paid less than they would under the old school model. But at some point in the not too distant future, the music industry will run out of artists who have had major label support in helping them build a huge fan base. The question is: how will new artists be able to use this model in the future if they haven't built a fan base in the millions in the years leading up to the release of their album under the pay what you'd like model?"

    This is of course horse-crap. Yes, the industry is capable of picking out just about anything with a partially intact larynx and turning it into an overnight "success", but the music world hardly needs this and will conceivably will fair much better overall without it.

Re:FUD (1)

Goffee71 (628501) | more than 6 years ago | (#21259627)

This also igores that every cent Radiohead made, the record company made $1 or more... Selective thinking their Mr Taxi.

Got radio head? (3, Funny)

smitty_one_each (243267) | more than 6 years ago | (#21259293)

Got radio head?
Listen, Fred:
RF containment
Could leave you dead
Drop the insulation
And broadcast, instead.
Burma Shave

One thing they didn't account for (4, Interesting)

Aslan72 (647654) | more than 6 years ago | (#21259299)

One thing this didn't account for was advertising. A band that big probably had a huge advertising budget in their past that they no longer had to worry about because being the first ones out of the block, they caught a bit more press on the Internet. There were probably a number of new radiohead fans that were made because of this that will come back and buy future CDs. They might have taken a hit financially, but I think the payoff is going to be bigger in the long run.

Re:One thing they didn't account for (4, Insightful)

Chris Burke (6130) | more than 6 years ago | (#21259371)

Actually you raise a good point on the advertising costs. If they did not spend much in terms of advertising, then their costs would be lower and it's possible that they ended up with similar or even more profits. Having an already established name would help, of course, along with the free publicity, but hey, that's savvy too. But yeah, no idea how that actually played out.

Re:One thing they didn't account for (1)

jkabbe (631234) | more than 6 years ago | (#21259385)

Did they take a hit financially, though? How much would Radiohead have received from even one of the more generous agreements with a music label?

By hosting their music on their own website they pretty much get to keep all that money themselves, don't they (aside from paying their ISP and the costs to produce the album, of course)?

ANTI pays 50% (3, Informative)

MushMouth (5650) | more than 6 years ago | (#21259495)

ANTI records [anti.com] which has some pretty big names pays 50%, does promotion and distribution but doesn't cover recording costs.

Re:One thing they didn't account for (1)

king-manic (409855) | more than 6 years ago | (#21259523)

One thing this didn't account for was advertising. A band that big probably had a huge advertising budget in their past that they no longer had to worry about because being the first ones out of the block, they caught a bit more press on the Internet. There were probably a number of new radiohead fans that were made because of this that will come back and buy future CDs. They might have taken a hit financially, but I think the payoff is going to be bigger in the long run.
I think Radiohead got a considerable amount of free advertising. Due entirely to the novelty of the endeavor. I didn't see any adds for it and on the radio head site itself it's a bit hard to find. But there was a lot of online buzz from various unpaid sources. Unless it was a very clever viral marketing scheme I think they didn't really advertise much.

Re:One thing they didn't account for (1)

norminator (784674) | more than 6 years ago | (#21259579)

I think an interesting question is whether their former record label will now make more money off of their previous albums, since new potential fans will get the album, possibly for free, then get interested in the older stuff. They'll then go out and buy the entire back catalog of Radiohead albums.

In an ironic twist, the former label could make more money (from a few customers, anyway, definitely not overall) than the band off of this new distribution scheme.

Re:One thing they didn't account for (1)

modecx (130548) | more than 6 years ago | (#21259619)

Actually, due to how the public consciousness works today, it's probably much easier for a band to gain stardom level of attention through social networking sites, youtube, etc. than it is to sign up to a label and give them a big chunk for advertising and stuff.

I'm going to prophesy for a second here: it's not going to be too long till a band gains bigtime real world fame and profit by first becoming popular through the internet and its associated media outlets, and the traditional media will pick up the ball after this, forever implanting them in the hearts, minds and wallets of the mainstream. I don't think it's happened yet, for many reasons, but it's gonna happen soon.

Re:One thing they didn't account for (1)

jedidiah (1196) | more than 6 years ago | (#21259783)

The kicker here is that under the current regime a band
already has to pay for all of the production and operational
costs. It gets taken out of their end of the royalties.
So it's a very small step from paying for everything and
having the operation run by some label and paying for
everything and running the operation themselves.

The band pays for everything either way.

How does this compare... (2, Interesting)

Raineer (1002750) | more than 6 years ago | (#21259301)

After all is said and done, how does that compare to the standard take of the band's share? Typically $1-2 per album sold right? Sounds like they made out pretty well.

Re:How does this compare... (1)

AresTheImpaler (570208) | more than 6 years ago | (#21259669)

dont the bands sign a contract with a record company? that means they might not get paid by the cd, but get some cash via the contract.. or am I wrong? If I'm right, then.. how would it compare with the old method of contract+very little from the cd sales....

it worked (4, Interesting)

Mutagenic (1105159) | more than 6 years ago | (#21259313)

at 6-10 mil this experiment work. Radiohead made more in album sales via download than they have on other albums. Plus this does not included what they will make in storefront sales.

Re:it worked (1)

seriesrover (867969) | more than 6 years ago | (#21259787)

Well it worked to some degree. It worked in-so-much that they're an already hugely well known band due to the traditional RIAA\corporation backing and then made some money by this alternative approach - they used their good name to propel them forward in this venture. Now there are no shortage of unknown bands that have been putting mp3 albums up for years - the real question as to whether "it worked" is how many of those bands have made it big.

The question being (5, Insightful)

Cheese_Grater (470961) | more than 6 years ago | (#21259315)

How many of those were people who downloaded it, gave it a listen and then went back and paid for it after they decided it was worth some cash.

also, multiple downloads (2, Interesting)

ODiV (51631) | more than 6 years ago | (#21259431)

How many people downloaded and paid for it on one machine and then decided to download it to another (at work, on a laptop in a hotel, whatever)? There are several things online I end up downloading countless times because it's easier to get it off the net than it is to keep everything on me.

Re:The question being (-1, Troll)

Anonymous Coward | more than 6 years ago | (#21259439)

How many of those were people who downloaded it, gave it a listen and then went back and paid for it after they decided it was worth some cash.

That's exactly what I did. How can you determine what something is worth without so much as a preview? I also would have paid them more if the download were of higher quality (FLAC, WAV, etc.) rather than shabbily encoded 160 kbps mp3 files.

Re:The question being (1)

dotancohen (1015143) | more than 6 years ago | (#21259487)

That's what I did. So I got counted twice.

Truth is, I didn't like the album. So I paid $5 because I might want to listen to it more in the future. If I would have liked it I would have given $10. And if I see that I'm listening to it a lot, I will most certainly go and 'buy' it again in order to make my $5 purchase into $10.

Re:The question being (1)

MobileTatsu-NJG (946591) | more than 6 years ago | (#21259719)

"How many of those were people who downloaded it, gave it a listen and then went back and paid for it after they decided it was worth some cash."

I wonder how many people download music illegally, then find out they'd never have purchased that song in the first place. I never cared for the RIAA's "Open Your Mouth and Close Your Eyes" business strategy. I hope they don't panic at the percentage because it's not 100.

Before anyone starts drawing wild conclusions (1)

zappepcs (820751) | more than 6 years ago | (#21259333)

I don't mind Radiohead's music, but I didn't pay for it either. Neither did I download it yet. It is not correct to say that only 12% of people will pay for music, only that 12% of people that wanted to hear RADIOHEAD's music paid for it. It was an experiment. There were more people going to the site to see what it was about or what the music is like than their are fans that wanted to buy the music IMO. That will significantly skew the statistics.

As more bands do this, we will see what the average price is that people will pay.

I say, it was a success. They made money AND more people now know about them than did before.

Or... (2, Insightful)

rbarreira (836272) | more than 6 years ago | (#21259411)

Either that or many people wanted to use this opportunity to make a point against the recording labels, and the results would be different if this became a standard practice.

For some reason, I'm inclined towards the latter.

Oops, wrong post to reply to. Ignore parent post (1)

rbarreira (836272) | more than 6 years ago | (#21259491)

Oops, I meant to reply to this post [slashdot.org] instead...

Interesting... (1, Interesting)

Anonymous Coward | more than 6 years ago | (#21259345)

But at the moment its a novelty having a well known band do this, many paid simply to show their support for the idea.

I wonder how much those percentages will change if this becomes the norm.

I myself didn't pay simply because the album was not to my taste.

A lot better than software (5, Interesting)

El Lobo (994537) | more than 6 years ago | (#21259351)

I am the developer of a quite succesful shareware program. The program can be downloaded for free AND without limitations or nag screen. Nothing. It just works and the users would pay if they want. The "official" price is 25 USD. Counting the the "phoning home" update feature unique hits and the money that came in, I calculate that only a 10-12% of the user pays for the program.

Well, of course, it culd be that not all the users are keeping the program, they may be testing, etc... but I am counting the hits that the server register from the same address within a month... So the program has being used a month more or less....

So judging by that, music consumers have a more happy pocket than software users.

Another possibility (4, Insightful)

rbarreira (836272) | more than 6 years ago | (#21259465)

Either that, or many people wanted to use this opportunity to make a point against the recording labels, and the results would be different if this became a standard practice.

For some reason, I'm inclined towards the latter.

Re:A lot better than software (1)

darjen (879890) | more than 6 years ago | (#21259515)

My brother wrote a heavily used firefox extension, and put a donate screen on it, that only pops up when it is first installed. He is quite happy with the number of people who donate after installing his software.

Re:A lot better than software (1)

dedazo (737510) | more than 6 years ago | (#21259521)

Looks like those "outrageous" piracy figures from the BSA and *AA folks are relatively correct then. I guess that's funny. Maybe.

Re:A lot better than software (0)

Anonymous Coward | more than 6 years ago | (#21259551)

10-12%? Thats great. I hear the shareware industry trial to purchase conversion rate is more like 1%.
http://discuss.joelonsoftware.com/default.asp?biz.5.368726.30 [joelonsoftware.com]

Would you be willing to share the URL to your product?
Or at the very least a generalization of the size of your customer base? Is it in the hundreds? thousands? ten thousands?

Re:A lot better than software (2, Interesting)

SydShamino (547793) | more than 6 years ago | (#21259717)

I've paid for shareware I've used before, with prices up to $60-$70 or so. However, that top price was for a full-featured "best in class" development program (VideoReDo) or for a major customized database application (Living Cookbook). I wouldn't pay that much for a "utility" type of software as opposed to an "application" type of software. (I don't know what you sell.)

It's possible that your customers feel that the program is worth something to them, but they just don't feel it's worth $25. Since you get so little money anyway, why don't you try letting people pay whatever they choose in the range of $15-$25, and see if it boosts your total income? Maybe you could add value to those who choose to pay $20 or more by giving them free updates, new features, support, etc.?

And nag screens can bad (thanks for not having one!) but perhaps there's space on the menu bar to put in a text-only "donate and register" reminder? Can't hurt to remind people that they didn't pay anything for a utility they use all the time...

Re:A lot better than software (3, Insightful)

imbaczek (690596) | more than 6 years ago | (#21259813)

10% is a freaking lot. If everybody I know paid for Total Commander, the guy that made it would probably be a space tourist by now. Twice.

what idiot wrote this? (4, Insightful)

Lord Ender (156273) | more than 6 years ago | (#21259359)

the largest percentage (17 percent) paid less than $4
If you are arbitrarily defining the range paid, it is completely meaningless to say "the largest percentage."

For example, if I divide it in to two groups: those who paid less than $4 and those that paid more than $4, you could say that the largest percentage (83 percent) paid MORE than $4.

Lies, damn lies.... and terrible journalism.

Re:what idiot wrote this? (1)

Xerotope (777662) | more than 6 years ago | (#21259513)

Actually, they're binning a continuous distribution in order to form a histogram [wikipedia.org] of prices.

It's quite useful for getting a handle on the distribution of prices people paid.

All of the intervals, save the last, span $4. So it's hardly an unfair comparison.

Re:what idiot wrote this? (1)

Lord Ender (156273) | more than 6 years ago | (#21259671)

It is still meaningless to say "the largest percentage."

Actually... (2, Interesting)

C10H14N2 (640033) | more than 6 years ago | (#21259697)

It would appear the spread was:

$0.00 : 62%
$0.01-4 : 17%
$4.01+ : 21%

Why four bucks is some magic number to someone, who knows. If broken in to equally as arbitrary but halfway sensible thirds, I'm sure it would look something exciting like:

$00.00-00.00 : 62%
$00.01-05.00 : 12.6%
$05.01-10.00 : 12.6%
$10.01-15.00 : 12.6%

But, that would make for a terribly boring PowerPoint presentation.

Impressive (2, Insightful)

imstanny (722685) | more than 6 years ago | (#21259365)

The varying statistics of user behavior (from the degrees of payment to none at all) make a strong point Against RIAA's studies, which are used to determine the size of the damages they wish to seek from defendants of illegal downloads.

yes, and..... (3, Interesting)

User 956 (568564) | more than 6 years ago | (#21259381)

...And with all the free publicity, EMI (their old label) has decided to cash in-- selling their back catalog on a USB drive that retails for TWICE what the CD box set costs.

That pretty much explains the music "industry" in a nutshell.

go to drudgereport.com right now (4, Interesting)

circletimessquare (444983) | more than 6 years ago | (#21259383)

drudgereport.com [drudgereport.com] is a right-leaning website frequented by media execs

you see the very first story linked as:

"Most Fans Paid $0 for Radiohead Album..." [breitbart.com]

(breitbart is a right-leaning media outlet as well)

ps: right now being 4:15 pm, 11/06/2007

what's funny is how a pro-file sharing website, like slashdot, can spin a positive out of the numbers, and an anti-file sharing website can spin a negative

spin, spin, spin

just my two cents: radiohead probably made more money off their album with this internet tip jar concept than if they signed with a label, considering how the companies nickel and dime artists to death. actually, radiohead has some clout, so maybe that's not 100% true. but rather, an unknown band would DEFINITELY make more money with free albums and an internet tip jar than signing with a label

hopefully more and more bands will realize this, and a critical mass of hot young bands will coalesce such that one will consider doing business with the defunct music labels ever again

then the RIAA attack dogs will sue up and coming artists to sign with the music labels? (half-joking, i wouldn't put it past them)

Re:go to drudgereport.com right now (1)

king-manic (409855) | more than 6 years ago | (#21259577)

drudgereport.com is a right-leaning website frequented by media execs

you see the very first story linked as:

"Most Fans Paid $0 for Radiohead Album..."

(breitbart is a right-leaning media outlet as well)
The things is % of paid down loaders fails to account for paying customers who downloaded more then once. I certainly did. I paid 10 pounds for the record then download it 4 times as it was convenient.

Re:go to drudgereport.com right now (1)

WrongMonkey (1027334) | more than 6 years ago | (#21259583)

What's the point of putting any spin on this story? This isn't an issue that is going to be on a ballot or decided in the court of public opinion or executives. The only people that need to be convinced one way or another are the actual musicians. And hopefully they won't take either the slashdot or dudgereport story at face value. They will look at the money earned by Radiohead vs the money earned by signing with a label and decide from that.

Re:go to drudgereport.com right now (1)

notgm (1069012) | more than 6 years ago | (#21259675)

I find it interesting that you interpret that headline as a negative spin. I frequent drudge, not for the lean, but because there are usually interesting links to follow, regardless of spin - i have my own filter.

i see that as an accurate headline, possibly omitting the word 'fans', but not neccesarily so.

most people paid $0, it's a fact. the article goes on to say that there were a signigicant number of people who paid.

what's missing is the raw number of downloads. I'm really curious how much the grossed from this experiment, and how much it compares to, say, a standard industry payout.

i mean really, if 60% paid zero, and that's 60% of 1000 people, then they made $2400. that sucks. even if they'd averaged $6 across the full thousand, that's only 6 grand.

if 100000 people total downloaded it? w00t, $240,000. pretty good haul, i imagine.

all-in-all, i'm impressed by radiohead for taking the initiative to test these waters. i didn't download it, and i won't though.

Re:go to drudgereport.com right now (0)

Anonymous Coward | more than 6 years ago | (#21259823)

You, and a number or others, have failed to understand that a number of people have simply tried the music to see whether they like it. Unlike regular purchases, you are expected to buy albums unheard, or on the back of one or two singles. This new model allows people off the street that don't bother with pirate sites to simply try the album before it hits CD. Bearing in mind it's a shit bitrate, a number of people will make do until they can rip CDs.

Re:go to drudgereport.com right now (1)

Volante3192 (953645) | more than 6 years ago | (#21259703)

"Most Fans Paid $0 for Radiohead Album..." [breitbart.com]

I saw that on Yahoo as well and thought to myself, "I'm not a fan, I just downloaded it cause I was curious."
Heck, I still haven't gotten around to listening to it. Clearly 'fan' is not the proper word for that headline.

(I'll be honest...I've had Still Alive on repeat in Winamp for the past 2 weeks...you may now shun me like the pariah I am...)

Re:go to drudgereport.com right now (1)

Nutty_Irishman (729030) | more than 6 years ago | (#21259713)

Okay, I've read both the source article as well as the one you linked two, however, neither of them have unambigiously defined where the $0 downloads come from. There is nothing that explicity states that the remaining 62% of the downloads were from people that went to their site and physically typed in "$0" into the box and downloaded it.

The study showed that 38 percent of global downloaders of the album willingly paid to do so, with the remaining 62 percent choosing to pay nothing.
Their use of "global downloaders" and the "pay nothing" implies more that it captures both Radiohead's website as well as all of p2p networks.

There's a difference between downloading a song from P2P, and physically typing in "$0" into the box and downloading it. What would be nice to know is the % of people that: 1.) paid to download, 2.) entered 0$ and downloaded it from their site, and 3.) used a p2p service to download it.

While most would assume that 2 and 3 should be grouped together (in fact they both have "paid nothing"), it's quite possible that the 62% is an inflated value from people that did not realize that there was a set your own price scheme and would have done otherwise.

Sounds like more of a win for pro-file sharing (1)

Solandri (704621) | more than 6 years ago | (#21259803)

If the average paid was $5-$8, that blows a huge hole into the argument that DRM is needed because without it, customers would just copy everything for free. Remember, an average includes the people who paid zero. It sounds more like piracy due to lack of DRM and a fixed price will only negatively impact sales revenue by 20%-50%. And you still haven't accounted for the mitigating effect of having wider distribution due to more availability. I was pretty skeptical of the "music for donations" business model, but this is making me re-think that stance.

The monkey wrench in the works is that we don't know how many copies were acquired via filesharing. But it's a pretty safe bet that those people wouldn't have bought it anyway if it had been released at a fixed price. If these payment rates hold up long-term, the RIAA's business model is pretty much dead. There is no reason for a band to sign a contract with a label which gives them less than 50% of revenue from Internet sales -- they could make more publishing independently.

More data needed. (3, Interesting)

Rob T Firefly (844560) | more than 6 years ago | (#21259399)

We'll only really know the full impact of this if/when other acts start doing it. I don't really like Radiohead, but I threw them $5 just for shaking things up in a good way. Still, it's obvious most people who bought this album were Radiohead fans. The real question is, how much further will this distribution model go if/when other major fanbases are given the same chance?

Re:More data needed. (1)

qengho (54305) | more than 6 years ago | (#21259821)

We'll only really know the full impact of this if/when other acts start doing it.

Well, at least one other has done it [niggytardust.com] , and Trent Reznor--being contract-free now--will probably follow suit shortly.

No surprises (4, Insightful)

Cally (10873) | more than 6 years ago | (#21259413)

So things went pretty much as you'd have expected from reading the comments on a typical RIAA / music / copright story on Slashdot, six or seven years ago - say, when Napster happened. Back then, those of us who that a band could give away their material, and if they were any good, some significant fraction of the audience would willingly pay for it --enough to make it a viable approach -- were seen as loony swivel-eyed furry-toothed freetards, if I remember correctly.

Hmmmm.

Three cheers for Radiohead, at any rate.

Something to consider (4, Insightful)

sheph (955019) | more than 6 years ago | (#21259415)

Of those who did not pay anything, how many would have purchased the album if it had not been available for free download? Between that, and the minimal compensation from a standard record contract I'd call this endeavor a success. I also think that if this model took off there might be more of a social push to encourge cheapskates to support the bands they listen to.

Re:Something to consider (1)

plague3106 (71849) | more than 6 years ago | (#21259539)

I dunno, if I was in RadioHead's spot, I really wouldn't be thinking about that. I'd be happy with my $8 millon.

news for nerds? Stuff that matters? (0, Flamebait)

limeman (310620) | more than 6 years ago | (#21259417)

I fail to see how this is news for nerds.. who cares really.. ugh radiohead

The Point (0)

edwardpickman (965122) | more than 6 years ago | (#21259419)

62% were dead beats and only 12% paid a price competitive with download services. Pretty abysmal numbers. You can't look at the total you have to look at the percentages and they weren't good. I have to believe they would also drop over time as more epople decided why should they pay when most aren't? I remember when the speed limit went from 55 to 65 or better. For months few people exceeded 65 and most actaully drove 55 or 60. Now they drive 75 in 65 zones. Take away restrictions and the standards of behavior change. A few groups will make money in the early days but eventually most won't bother to pay anything.

Re:The Point (0)

Anonymous Coward | more than 6 years ago | (#21259825)

Abysmal? Nah, it's great for Radiohead. Let's say Radiohead sells their album in stores, and let's say 100% of the people who get the album pay the retail price for it. Even then Radiohead only sees maybe 10-20% of that price in their pocket (and, most likely, they still have to pay for production costs out of their royalty advance payment). Now look at Radiohead offering their album for download w/ voluntary payment. They have to pay for the overhead, but in the modern age that's relatively small for a single album (much less than a dollar per download), and even if only 10-20% of downloaders pay a competitive price for the album, they're still doing much better than if they had gone with a label, because they retain 100% control over their music while still making the same money.

More importantly, the optional purchase download model leads to much higher numbers of people listening to the album (since they can get it for free if they want) than the retail model would. Realistically this means that the number of people paying reasonable prices for the album will be near the number of people who would pay retail price for the album in stores (or pay a used price in a used record store). The end result is that even if a large percentage of downloaders get the album for free, that doesn't matter (unless you're a mean person who hates people listening to music) because the number of people paying for the album will be about the same. Except, because of the very low overhead the amount of profit made by Radiohead will be much, much higher.

Make no mistake, a band making $6 million on a single album (and so early in its release) is phenomenal. To match that sort of take, a band working through a studio with even a very good contract would have to have multi-platinum sales figures. Compare that with this Radiohead album, which technically has not even reached the "Gold album" sales level.

It should be obvious to everyone that this is a huge boon to Radiohead and other bands would be lucky to have this level of success and revenue.

Not really good news? (1)

ThirdPrize (938147) | more than 6 years ago | (#21259455)

If only 12% of the people who brought it made up 60% if the actual income then how is that good?

Re:Not really good news? (1)

night_flyer (453866) | more than 6 years ago | (#21259483)

sounds like the US tax code...

Re:Not really good news? (1)

kasek (514492) | more than 6 years ago | (#21259617)

its just another completely arbitrary number that means nothing.

12% of people were 60% of sales.

What if it said, 5% of people were 45% of sales?
or 25% of people were 85% of sales?

It just shows you can spin numbers whatever way you want, however it suits your purposes.

I Paid (3, Interesting)

ilovegeorgebush (923173) | more than 6 years ago | (#21259507)

I've been an avid Radiohead fan for years now, and when I saw this I was delighted someone had stepped up and realised the change in the state of the music industry. I paid 5 quid for it, and I did so to say "good idea, I'm willing to pay" and I don't regret one penny of it.

Kudos to Radiohead, and I hope those fat cats at the RIAA and related Music Labels take heed.

But what does Scott Tenorman have to say? (0, Offtopic)

Chas (5144) | more than 6 years ago | (#21259525)

Or is he still obsessing about chili?

Re:But what does Scott Tenorman have to say? (1)

cthulu_mt (1124113) | more than 6 years ago | (#21259805)

He's moved on to Left Eye.
*rimshot*
Thanks, I'll be here all week.

Re:But what does Scott Tenorman have to say? (1)

corychristison (951993) | more than 6 years ago | (#21259829)

I laughed... so hard.
To anyone who didn't get it, check out Episode 501 of South Park [southparkstudios.com] .

Wrong Question (1)

MBCook (132727) | more than 6 years ago | (#21259535)

This doesn't surprise me too much (although it's higher than I would have expected). The real question is how many of those people who didn't pay went out and bought another of their albums after finding they liked the band?

But that would be really tough to measure.

How do you interpret that? (1)

Trojan35 (910785) | more than 6 years ago | (#21259541)

Does this mean the record industry has successfully convinced everyone the price of an album should be around $10?
Or does it mean that the record industry actually set the right price point?
Does it mean that cheaper priced albums might sell more quantity, but generate less revenue?

Re:How do you interpret that? (1)

Volante3192 (953645) | more than 6 years ago | (#21259739)

Does this mean the record industry has successfully convinced everyone the price of an album should be around $10?

Looking at the MSRP of Amazon's best sellers for today, the record industry still thinks $18-$20 is the price of an album. Not sure where you're getting the idea they think it should be $10.

These numbers are meaningless (4, Insightful)

kasek (514492) | more than 6 years ago | (#21259571)

You can spin the numbers any way you want...

17% paid less than $4? Well, that means that of the 38% that paid, 21% paid more than $4. What does $4 have to do with anything at all? It is a completely arbitrary number.

The numbers that would be important are:
Of the 62% who paid nothing, how many of them would have bought the disc at retail at launch?
Of the 38% who paid something, how many of them would have bought the disc at retail at launch? How much more / less did they pay than if they bought it at retail?

Not to mention that they will still sell physical CDs, which they stand to make more money off of.

Re:These numbers are meaningless (2, Insightful)

Volante3192 (953645) | more than 6 years ago | (#21259785)

And how many people actually cost Radiohead money by donating less than what the charge fee ended up being?

One donation of $10 might cancel out 10 donations of $1...

(Numbers pulled completely from ass, plus I can't remember if they put a minimum on that just to cover the fees)

Was it just me? (3, Insightful)

minniger (32861) | more than 6 years ago | (#21259587)

Or was the website strange enough that I was inherently unwilling to give them ANY of my personal info, let alone my CC number?

I like the band, and I am willing to wade through any number of website disasters that reflect a given bands 'taste'. But when it comes to giving my money to someone I'd like something nice, normal and boring.

But that's just me.

Re:Was it just me? (2, Interesting)

Rude Turnip (49495) | more than 6 years ago | (#21259793)

I was willing to pay $5.00 for the album, but in the end, I just left their web site and didn't download the album. The fact that I had to register (i.e, create a username) was simply annoying. I don't mind entering my CC info and address for a one-time payment, but that is all I'm willing to do to pay for the album. Past the purchase, I don't want to have any connection to the site. Even a Paypal option would have been nice.

The site was too congested, so I torrented it. (0)

Anonymous Coward | more than 6 years ago | (#21259609)

I was planning on going back to the site and paying $5 for it but changed my mind. I'm ordering that LP box set. (I'm a vinyl playing dj anyway.)

When I went to a torrent site to download it, it was interesting because there was an argument between regulars, some who said it was just plain wrong to torrent it when they offer it free on the site, and you should throw them at least a buck because at least they're trying to be nice. The other side was saying, who cares, I want this album and it's here now.

I DLed it, I didnt pay for it (1)

night_flyer (453866) | more than 6 years ago | (#21259621)

never heard their music before, didnt like it, and deleted it...

15% after recoupment is better than average (5, Insightful)

sneakyimp (1161443) | more than 6 years ago | (#21259633)

A lucky band might get a deal whereby they are paid 15% of revenues *after the record label recoups it investment*. Costs to be recouped can include nearly anything: secretaries, fat cat lunches, photography and printing costs, air conditioning, parking, coffee. You name it. Perhaps most importantly, the label has to shell out a pretty hefty percentage of revenues to the distributors and manufacturers whether they be a disc manufacturer or iTunes.

My band had a record distributed through V2 records and I believe our tiny label was *supposed* to get paid about $2 per record. Despite selling a few thousand records, we never got paid a dime because they claimed they didn't recoup the cost of their sales department selling our record to Target, Best Buy, etc.

I'll admit my band isn't as popular as radiohead, but let's do a little arithmetic. Suppose radiohead sells 1 million copies of their record at $20 a pop. That's $20 million dollars. Let's further suppose they get an extremely generous (nay unheard-of!) deal whereby they're paid 20% of gross after the label recoups their 'investments'. Let's suppose they get an amazing distribution deal that only siphons off 10% of gross revenues. Hell let's go crazy and assume that the record label doesn't expect to recoup anything and pays radiohead their percentage from the first record sold.

20% of $20 million is $4 million

take 10% of that and give it to iTunes and that leaves $3.6 million dollars

I'd bet my right arm that radiohead have made out like bandits on this.

For some interesting reading on the crooked record business, I would suggest Donald Passman's book All You Need to Know About the Music Business [amazon.com]

Skued Numbers? (5, Interesting)

OVDoobie (887621) | more than 6 years ago | (#21259657)

I tried to buy the album from the US, my bank declined the charges. When I called them to find out why they said a lot of fraudulent charges come from that part of the world and would not allow me to buy the album. How many of the folks who didn't pay for it actually "couldn't" pay for it?

RE: (1)

rupert0 (885882) | more than 6 years ago | (#21259665)

Great news .. 38% of people appreciate their music ...
I feel 38% more sociable :)

Who has listened to the album? (1)

Ogive17 (691899) | more than 6 years ago | (#21259677)

I have enjoyed a few Radiohead songs in the past but haven't downloaded this album. Is it good?

If I do download it, I will pay them $1 for every song I like (itunes going rate). But I am a typical /.er with a few bucks to spare and enough morality to reward those who provide good entertainment... can't say the rest of the e-world would do the same.. a shame really since it would directly benefit the artist. But the numbers in the article do suggest there is some hope for this business model.

I don't know. (0)

Anonymous Coward | more than 6 years ago | (#21259679)

I wouldn't go so far as to call 12% "significant", though 38% paying something was higher than I expected. In a vacuum this would look like a success, but Radiohead was already a well established group thanks (in part) to their deal with their previous record label. I can't help but feel that they were also helped by the novelty of the experiment. Would they have done so well if choosing your own price was the norm?

A few observations (1)

joesilicon (213295) | more than 6 years ago | (#21259681)

I gladly registered, and paid for the download. I even listened to the album. I doubt, though, that I will be hearing any of these songs on the radio. So much for no-payola.

I have always theorized that the biggest deterrent to CD sales was the trend of stores letting people listen to the CDs before they purchased them. The music industry / bands used to be able to write one or two good songs, and fill the remainder of the CD with crap. One would ask themselves, is it really worth $17 for the two songs I liked? I grew up buying 45s at the corner drug store for a couple of bucks. Nothing much has changed except now that I can buy many of the same tunes via the web.

I would love to see paypal links showing up on musicians' websites so I could email some money directly to an artist whose music I had come across in some non-traditional way and decided to keep. So far, the closest I have come (from "mainstream musicians") is the Radiohead experiment. I guess with the traditional distribution model (that we are still utilizing, only we have removed the bike ride to the store), there are too many fingers in the pie to allow for such a sensible situation.

Re:A few observations (1)

tyrantking31 (1115607) | more than 6 years ago | (#21259769)

My experience has been somewhat the opposite. Really good bands often have hidden gems on their albums that will never be played on the radio. I suppose it depends on what type of music you're listening too. With pop artists, I don't expect there to be more than one or two songs that will get airplay and the rest of the album is going to be filler-crap. I would never buy an album from a pop-artist. (Vanilla Ice taught me this lesson in 7th grade.) On the other hand, I often lament the fact that I don't have more money to spend on albums when I find a band that sounds legit, because I know there are bound to be great songs I'll never hear.

conclusions (1)

bwhalen (246170) | more than 6 years ago | (#21259685)

So, does anyone doubt after reading this that mist consumers want something for nothing aka theft?

Even at $2 for the album...net was likely more (1)

PortHaven (242123) | more than 6 years ago | (#21259707)

Even at $2/album, I bet you these guys netted more profit per sale than they would have received from the labels. Many bands are lucky to see more than a quarter to fifty-cents on the sale of an album.

These numbers do not include the Discbox (0)

Anonymous Coward | more than 6 years ago | (#21259721)

This is a huge factor. http://www.nextgreatthing.com/2007/10/22/artists-create-new-music-revenue-models/ [nextgreatthing.com] This site reports 700,000 total copies of the discbox sold, a number I have read elsewhere. While physical production costs and shipping are part of the $80 price, I would say it is reasonable to say they would net at least $40 a pop from that price, if not more. Whatever the amount of profit they stand to make from the discbox, if those numbers are remotely close to accurate that is a ton of money going straight to the band. The purchasers of the discbox are the most loyal, hardcore fans. The discbox purchase also meant they got a "free" digital download. It is my understanding that they are not included in the 1.2 million purchases of the download. The numbers presented in this article are skewed to show more casual fans, and excludes the most ardent supporters.

And it could have made even more money! (5, Insightful)

ilikeyouanyways (1001359) | more than 6 years ago | (#21259729)

I view these results as a significant success for a new distribution model. But there are at least two things that make this experiment flawed and that limited how much money they've made off of In Rainbows:

Site Usability The website where you buy/download the albums is REALLY hard to navigate and understand. They don't even make clear that you set your own price. Had I not known beforehand that you could set the price, I would've abandoned the site because it looked broken.

Can't Purchase After Download If you download the album for free (like I did), but then decide you like it and want to pay for it, YOU CAN'T! Basically they let you have one download per email address. So unless you have another address handy to use the second time, you can't retroactively pay for your first download. That's just silly. Of course some of us want to decide whether we like it or not before handing over some cash, so this is a significant feature flaw.

So given these two significant things were hampering sales of the album, I'm actually pretty optimistic about the model. The next artist that does this and gets the site experience right and supports a "delayed" purchase, will make even more.

Overlap (2, Interesting)

Arthur B. (806360) | more than 6 years ago | (#21259747)

I wonder what is the overlap between the percentages, I mean some people could not pay anything, decide they like the album then come back to the site and pay for the download.

I persist in not caring (5, Insightful)

jfengel (409917) | more than 6 years ago | (#21259765)

It's easy to sell things when you're already famous. That's what the record labels do: they make you famous. They put you in record stores and on the radio.

So I don't really care who downloads the albums of famous people. There are plenty of brilliant bands out there who you've never heard of and won't download their albums even when they give them away (and they often do).

Yeah, a bunch of famous people got in the newspaper and made a bunch of money off of it. Big deal.

My reasons for not paying, however lame... (0)

Anonymous Coward | more than 6 years ago | (#21259773)

I would have paid for the digital download it were it not for the following:

-- Could not determine the mp3 bitrate for the digital download until I downloaded it; personally I don't want to pay for inferior bitrates.

-- Lack of credibility for the site's merchant; I personally didn't feel too confident in entering my credit card info.

-- Going to purchase the disc at a later time; why pay twice?

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