62% Paid Nothing for Radiohead Album

An experiment like the Radiohead project is bound to have pros and cons.  This report indicates that 62% of those who downloaded the album in a 4-week period last month didn't pay anything for it.  The price they chose was zero.  That was certainly a viable option, although it's disappointing to see that the majority chose it.

Does that make this experiment a failure?  Far from it.  There are a lot of numbers swirling around out there and even if you could pinpoint the total revenue to date, don't you need to wait and add in the sales from the physical CD product to get the full picture?  The band certainly came out ahead for every copy that was bought at a price higher than their per-unit royalty amount.  And who knows how many people will come back and buy the physical CD/box product after downloading the music alone

Based on what I've seen so far I think this was a worthwhile venture for the band and I'll bet they agree.  But, it's important to factor in the CD sales before making any sort of judgment.  More importantly, what about all those people who never listened to Radiohead before, downloaded the album for free and are now fans, ready to buy future products, attend concerts, etc.?  We'll never know the impact of this segment.

Comments

[Em]

I agree with you about the fans that may have just discovered Radiohead. I listen to Pandora.com, an internet radio station that lets you chose the type of music you like. I discovered the band O.A.R. through listening to Pandora and have since bought all of their cds and have attended a concert.

[Morgan Ramsay]

More importantly, what about all those people who never listened to Radiohead before, downloaded the album for free and are now fans, ready to buy future products, attend concerts, etc.?

Right, well, I'd say there is a popular view of MROI and professional view of MROI. In the popular view, future value tends to be discounted in favor of immediacy. I guess that's because popular notions about marketing are dominantly held by people more familiar with marketing as sales than as strategy. (By the way, I blogged about using underground audiences.)

[Eylon Israely]

It is ironic how suddenly the "common wisdom" of greed being the main motivator of people is cast aside and a significant 38% of downloaders who chose to pay anything is somehow considered a failure by some or even a disappointment. To me it looks like hundreds of thousands of people opted to pay when they did not have to, thereby demonstrating band and brand loyalty that surpasses paying a few dollars more at the shop when it is the only option to get a genuine product.
Are they more likely to buy the next CD online? What about all the freeloaders, will they pay for the next one? Will they pay for concert tickets? The picture here is much broader and the band made a spectacular move at the right time for them.

Best,
Eylon