Comments on: Data On Radiohead Experiment: 38 Percent Of Downloaders Choose To Pay

By: Noboru Wayata

Noboru Wayata — Wed, 28 Nov 2007 09:15:15 +0000

Perhaps they think they have enough money and just want to try something different. And, as long as the peanut gallery is wondering how much this record cost to make, consider this: how much money is it worth to Radiohead to not have to work with record executives?

By: Frank

Frank — Thu, 08 Nov 2007 23:14:34 +0000

Just realize that for social norms to apply to any situation Mark, the "social" part of the equation must be present. The impersonal nature of the internet is the reason that arguments for "tipping" ultimately fail. There is simply no social pressure (the frown of your server for instance) to prompt the action.

By: Eli

Eli — Thu, 08 Nov 2007 18:50:25 +0000

At one point, a long time ago, record companies served a purpose. We now live in a digital society where the cost to produce and transfer media has been greatly reduced. The record companies, which previously served as a womb to the artist, are now merely the afterbirth. Radiohead is simply cutting the umbilical chord and discarding the unnecessary sack of overhead and greed that fuels the generic mediocrity of our airwaves.

By: Beau Ginbey

Beau Ginbey — Thu, 08 Nov 2007 18:12:12 +0000

Digital busking. Hats off to Radiohead.

By: mark nadel

mark nadel — Thu, 08 Nov 2007 01:07:01 +0000

I think that this voluntary payment (or “tipping”) business model could work if the music (and film, etc.) industries worked to create a social norm: that creative artists DESERVE a fair payment for their creations, just as restaurant servers deserve a tip. The most recent estimate in the academic literature of total tips annually by restaurant patrons was over $40 Billion. While creating the social norm would not be easy, one would expect that fans of an artist would be more primed to tip and tip a greater amount than the average restaurant customers, who generally tip even if they do not feel they received good service, they never expect to return to the restaurant, and even when the tip is paid on a credit card receipt that no one accompanying the tipper will see and which will not be seen by the server until after the patron has left the restaurant.
I reference some of the significant empirical research on tipping and how it can be applied to finance the output of creative artists in a 2004 article in the Berkeley Technology Law Journal.
http://aei-brookings.org/publications/abstract.php?pid= 302
See pages 837-45.

By: Jennifer

Jennifer — Wed, 07 Nov 2007 22:57:03 +0000

Had Radiohead not gone forth with this experiment, I never would have bought or heard the album. Since I was able to pay what I wanted (I gave them enough for an American latte), I now listen to their music, admire their innovativeness, and want to see them in concert. If their pricing model had been old hat, I probably wouldn't have gone in for the album–even for free–but the novelty of the format drew me at least as much as the idea of cheap music.

By: kris

kris — Wed, 07 Nov 2007 22:24:19 +0000

Just because some people didn't pay for the download doesn't mean that they are cheapskates. They may not have bought it at any price, but would partake in consuming a free sample.

In the end, this is not a viable pricing model, but I think the experiment fulfilled it's purpose. Radiohead claimed that they liked the idea because they wanted people to think about what music is worth to them. Some people certainly did do that, although I don't think there is any doubt that in the end, the intersection of supply and demand will revert back to normal, and in most cases people will eventually play closer and closer to nothing for these products that are in seemingly infinite supply. True, doing so may not be in the long-term interest of the consumer, considering most bands wouldn't be able to sustain themselves given such a model, but in the end it will just prove that the supply is not really unlimited. Artists who would like to pursue this model would eventually raise the price to the point where profits are maximized. There will be those, of course, whose profits will be maximized given a $0 LP price tag, but then LP product becomes little more than a marketing expense.

This brings up another concept, though. Since bands that can't afford to give there LPs away will be in competition with those that can, does the future of music one in which profits will be derived almost exclusively from touring? And if so, is this a bad thing?

By: EC

EC — Wed, 07 Nov 2007 21:23:31 +0000

Radiohead has no worries about concert attendence. The last time they played in the Bay Area, their 2 shows sold out in 2 minutes flat.

By: GLK

GLK — Wed, 07 Nov 2007 21:22:23 +0000

At least Radiohead had the brains to embrace the Internet music download community rather than fight against it. I hope this business model gets refined to the point that it becomes status quo because I'd love to see what happens when Metallica has to get in on it.

By: Gaurav Mishra

Gaurav Mishra — Wed, 07 Nov 2007 21:04:18 +0000

The Economics of Free — Free content -> Attention -> Free product -> Lock-in -> Paid bundled services -> $$$

It's not about how much Radiohead earn from CD sales, it's about how much they earn from the increase in concert attendance because of higher distribution of their music.

http://www.gauravonomics.com/blog/the-economics-of-free/