Radiohead’s pay-what-you-want experiment


It was some years ago, but still people are talking about it. The band Radiohead decided to use the online channel in their own advantage, instead of considering it their enemy in the form of illegal online downloading. Dimitris used this example in class, illustrating how business (or bands) can use the new channels to their benefit. I was curious what the end result of this experiment was. The following article answers that question:

Radiohead’s “In Rainbows” Experiment was a Success

CNN/Fortune hated the idea so much that they listed it in their 101 Dumbest Moments in Business article. In 2007, Radiohead made their album In Rainbows available for download before physical copies were available in stores. You could choose to simply download the album or voluntary pay an amount of your choice. Radiohead didn’t reveal any statistics related to the download; the known data comes from comScore, who reported that:

  • 62% of the downloaders chose to pay nothing
  • The remaining 38% voluntarily paid an average of $6 for the album

Based on these numbers and Radiohead’s silence, the CNN/Fortune article inlcuded the sneering line “Can’t wait for the follow-up album, In Debt.”

It turns out that Radiohead’s experiment was actually a success. Techdirt points to a report onMusic Ally that says that Radiohead’s publisher Warner Chappell will tell all about the In Rainbows experiment at the “You are in Control” music conference now taking place in Iceland.

The “success” of which they speak isn’t the hand-wavy “artistic”, “critical” or “proving a point” kind, but the sort of success that bottom-line thinkers like: In Rainbows made more money beforethe the album was physically released than the total sales for the previous album, Hail to the Thief. Even when preceded by a free or “pay what you can” downloads, In Rainbows has still sold 1.75 million copies of the CD to date, and it’s still in the top 200 selling CDs in the U.S. and U.K..

The Music Ally article has more details and includes these statistics:

  • After being made available online for free for 3 months, In Rainbows hit number one on both U.S. and U.K. charts.
  • 30,000 copies were sold on iTunes in its first week.
  • 1.75 million CDs of the album have been sold since its release.
  • 100,000 box sets have been sold through Radiohead’s sales and merchandising site,W.A.S.T.E..
  • 17 million plays on last.fm.
  • 1.2 million fans will see their tour.
  • The digital income from the experiment made a material difference to Warner Chappell Music’s UK digital revenue this year.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s