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38% of Downloaders Paid For Radiohead Album
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."
did they make more or less profit than what they would have made with the standard sales method?
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.
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.
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.
It's time to realise that Abble's products are the biggest abomination these days. Just say NO to the dumb iAbble way!!
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
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?
They were the band that laughed at Scott Tinnerman.
Except for ending slavery, the Nazis, communism, & securing American independence, war has never solved anything.
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.
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.
Here
Results to Date
70 downloads
5 donations
% of downloaders making a donation: 7%
Smallest donation: $2
Largest donation: $12
Average donation: $6.80
As a poster suggested to me in the last thread about Radiohead, I'm not going to quit my day job.
The reality of music in the Internet age will be that hardly any bands "make it big", but lots of bands make a living.
Note to ACs: I usually delete AC replies without reading them. If you want to talk to me, log in.
There's a big difference psychologically between:
Putting up a free download link, and having a donate button
OR
Having an order form that explicitly lets you type in $0 for the purchase price.
Your method will not work because the audience at large feels no obligation to to "donate". Radioheads makes you feel like you ought to pay something, even if it's minimal. Those 62% must feel really bad about now, unless they didn't like the music, in which case they probably appreciate Radiohead for not charging them.
"In this scenario, they're responsible for all the marketing, recording, and distribution costs. In the scenario where they're getting $2/album they don't have to foot any of those bills."
Huh? Typical music contacts often give you a set amount of money for a record and then X$ per CD, they then charge you for marketing, recording and distribution. so often an artist will come out ahead only if they sell X number of CDs to make up for those charges.
If every user expected every /. article to contain hyperlinks to define every little word larger than two syllables, the it would indeed be a pile of shit.
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When you go out to dinner how much do you tip? 15%? 20%? Why pay that when you can get it for nothing? Is it out of guilt? For future service? Either of those motives work well enough in this case. And unlike the waiter they don't need everybody to do it. Just a reasonable portion.
Comparing it to current sales and profits is not very meaningful. The industry is changing, and so is the profit model.
If Radiohead did not have record labels such as "XL, ATO, Parlophone and Capitol" marketing them or in essence providing seed funding/capital, would Radiohead have had the ability to make a name for themselves in today's internet era? My band gives away their music for free and do you think KROC in LA would tell the world that my band gives away our music for free? Nope. Radiohead was taking advantage of the marketing that had already been done (and yes they paid for it with the labels taking their cut of Radiohead's work).
So how could you market your music? Mail CDs to the radio stations, doubt it. Battle of the Bands, local gigs, works fine but takes a while to build up a non-regional following, and even that might not lead to radio play. So you're still left with word of mouth.
and this is where Radiohead cheated. Their word of mouth was spread via the mass media. I heard about it on not less than 3 radiostations. Radioheads "Can we get people to download something for free?" is not much different from a local ice cream shop offering a free scoop on their anniversary. Since the ice cream is free, I'll give it a try even if I normally don't eat ice cream in February. Sure I might return one day and purchase some on my own, or maybe i'll never go back there.
While I envy Radiohead's experiment on downloading free music (or name your price), I think it would be far more interesting for a study to be done on the viability of the thousands of bands which do not already have an international following of giving away their music.
It is receiving oral sex while relaxing and listening to the radio.
I considered putting a Democrat link instead of a Republican one, but ultimately decided against it. The Democrats could never get organized enough to form one pile. Therefore, I stand by my original post.
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Rather than stealing I think this is a very interesting glimpse into a post-scarcity economy.http://en.wikipedia.org/wiki/Post_scarcity
The most interesting thing about this is that while 60% of the people paid nothing, the band still made more than they would have under the old method. Perhaps we could do this with the food we currently pay farmers not to grow, give away staples like rice and flour for "pay what you want".
We are all just people.
Whoa; Completely wrong.
Did they 'break' when they were vinyl? No. BUT, I worked for major chains, pal, and the automatic returns system (accounting) was valid because an enormous number of records ended up as returns. You have no idea what you're talking about. Big stores usually had staff whose sole purpose was to validate returns. The main cause of the returns? Warpage. And the reason for that? Two things: Thinner LPs, with less actual vinyl, and the killer cause: The major labels never veered away from tight 'shrink-wrapping', which, in combination with the standard 60 LPs to a box in trucks with higher heat... equaled Warp City.
On big number pressings, where sales were easily predicted at hundreds of thousands of units, the returns could hit 15-20% easily in Southern California, which makes the notion, that the "10% breakage" policy was an unnecessary artifact from the past, all the way wrong.
I worked, briefly, all over Southern Cali, for WEA, doing Inventory, and part of it was dealing with returns. Did the labels mitigate some of the loss as part of overall contract strategy? Sure. But a mitigated LOSS, is still a LOSS. And trust me, when we shipped X number of units we wanted wholsale times X back. Nobody wanted to lose shit, mitigated or not. That's Business 101. Nice paranoid try, though.
Sorry if I sound harsh. But I hate the way the labels have treated artists and the fans. I always have. But we can expose these people, and their methods by stating the facts and telling the truth. It's not valid to get the facts wrong in pursuit of any 'point' one is trying to make. I hated the 'returns' thing, back in the day, because it was simply more evidence of the cheap-assed cynical methods that were being employed and 'perfected' before, during and after my stint in that part of the biz, before I went back to 'just' being a working, touring musician.