Jonathan Richards
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Radiohead's grand experiment in 'honesty box' music sales may have gone a little flat after a report found that three in five people downloading the band's latest album did not pay a cent for it.
Of the 1.2 million people who have downloaded In Rainbows since it was released last month, 62 per cent did not pay anything, and 12 per cent accounted for more than 52 per cent of the revenue from sales.
The average price paid was $6 (£2.90) globally, but this figure was propped up by the 12 per cent who were willing to pay between $8 to $12 (£3.90 to £5.80) - the approximate cost of downloading an album from a retail service like iTunes, the report, by comScore, concluded.
American music-lovers were the most generous, paying on average $8.05 (£3.89). Outside the US, the average amount parted with was $4.64 (£2.24).
ComScore tracks - to the last detail - the online behaviour of more than two million people worldwide, so its figures are not based on a survey. Shortly after the album's release nearly a month ago, online polls suggested that the average purchase was £4.
At the time, the band's decision was viewed by some as a future direction for the industry, which has struggled to combat declining sales in the face of widespread illegal downloading.
Other prominent musicians, including Trent Reznor from the band Nine Inch Nails, praised Radiohead for experimenting with a model, and Guy Hands, head of the private equity firm Terra Firma which recently bought EMI called the move "a wake-up call which we should all welcome and respond to."
But labels and other industry representatives expressed disappointment in the wake of yesterday's report, saying that while a band with an established fan base was able to take such risks, it was not an option for new bands, who still benefit from the support of labels.
Tim Dellow, co-founder of Transgressive, a smaller, London-based label, said: "It's depressing. Radiohead might have made a killing off this, but it was largely because of their fanbase built up over time with the help of a major label and its distribution and marketing channels."
"Most new acts don't have fans who would shell out £40 for the box set, and any profits (from this type of venture) would be impractical for making a living out of music."
Mike Driver, editor of DrownedinSound, a music news site, said that younger bands would find the honesty box method "unlikely to raise their profile any more than making a couple of tracks available on MySpace."
Fred Wilson, managing partner of Union Square Ventures, which invests in small, internet start-ups, said: "This shows pretty conclusively that the majority of music consumers feel that digital recorded music should be free and is not worth paying for."
A source at one of the major labels said that allowing fans to pay what they wanted for music would never work, because people would always steal. "Radiohead tried to spin this is offering a service for fans, but it was nothing more than a marketing ploy to make themselves relevant again and prepare for their next release. The reality is music has real value, and there has to be a way of capitalising on that."
A spokesman for Radiohead was not available for comment.
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yeah i think it was a really smart move
they were kinda sayin "yeah we know that ur gonna get it for free anyway, lets just act like it not a real issue"
lots of people got it for free, true, but many paid, and it was a great "radiohead" thing to do
its quite like there band .... simply good experimentation
and 1 of their best albus btw
aaron peters, Cape town, South Africa
I paid nothing for the download because that's what mp3's are worth. Many people just don't want to pay for compressed, low quality audio, especially if the've spent thousands on Hi Fi equipment. I've been a fan since the start and will pay for the cd when it's released.
Steve, Swansea,
Radiohead made a $2 profit per download. I wonder what the profit comparison is between this album release, a proper CD, and ITUNES? In addition, the additional impact of the hype is somethig worth considering when examining the success or failure of this experiment. That being said, I would tentatively conclude that it was not a failure.
NJT, Newark, New Jersey, USA
Personally I wouldn't download a Radiohead album if you paid me...
Clive, Key West, FL
Just look at the numbers... 1.2 million people paid an average of $6.00, thats $7.2 million for this album; ANY artist would kill for that kind of money off an album, especially since the only expense that has to come out of that total is studio time fees (I assume... I'm not their accountant, who knows what they need for expenses). Most artists make their money touring, not from album sales. 7.2 mil is a huge success by any standard, and think about how many "new" fans got into radiohead for free: what % of them will go shell out for some of the older albums? I think this will, in the long run, be a huge success for the band.
Matt, NY, USA
The point is that Radiohead weren't trying to make a 'Brave New World' for music. They knew full well that the moment they put their album out there for review, etc. it would be leaked and those who wanted to hear it would get hold of a copy.
All they did was provide a method to get back some money for that download. As an experiment it proved that people will pay for something they could get for free. The real trick will be to see how many copies of the physical album sell. Certainly comments on a lot of internet message boards and the like make it clear there are people out there who grabbed it for nothing because they want a proper CD copy of the album, which they'll buy when it becomes available.
Theo Graham-Brown, London, UK
Totally bizarre conclusions thought up be record execs desperately trying to save their failing business model.
Of course people are going to download albums without paying for it if they can.
What they're missing here is, everyone could have downloaded it for nothing, but they didn't. People were willing to shell out money for something they can get for nothing.
The average price of a physical CD here is $9.99CAD to $14CAD (~5£ to ~7£) so let's get some perspective here.
Don, Edmont, Canada
Welcome to the Internet, Radiohead!
Craig, Ajax, Canada
It's bizarre that the tone of the overall article is so negative on the experiment. Radiohead themselves netted over $4million in a few weeks. This is far more than their share would have been through the traditional label channel, where they get less than 10% of the proceeds.
It is natural that the labels will spin this as negative, since they are being cut out of the loop: their business model is obseleted by this approach.
However, it would be surprising if the band themselves viewed a quick $4million as a bad thing.
One flawed assumption that always surrounds music downloads is that every free copy is a "stolen" copy representing lost revenues. In reality, many people who "steal" music would have forgone the music if they had to pay for it.
BTW, I paid 2 pounds sterling. More than Radiohead would have gotten via traditional chanels, but less than I would have had to pay any other way. This is a win-win solution.
Brent, Ottawa,
Maybe if Radiohead released their album at a bitrate slightly higher than that of an AM broadcast, they might have statistics to be a little more proud of. I think it's all a publicity stunt at the expense of the last few honest music consumers.
Strike, Winnipeg, Canada
One question though: when calculating that 62 percent didn't pay anything for it, does this take account of people who 'bought' it for free, listened to it, and then went back and paid for it? I only ask because if everyone did that (as many people in online forums have been saying they did) then the stats would say that only 50 percent paid for it, when in reality 100 percent paid for it, but downloaded it once for free.
Robert Thorpe, Reading, UK
This is a fantastic idea for established bands to do; many people cannot afford an awful lot of music and with the availability of music online to illegally download it is all too tempting to break the law. Radiohead are effectively saying 'have this album, leave a tip if you want', playing on the better nature of people; if people can afford it, naturally they should. I feel the experiment can be seen to have worked, as a little under £3.5 million has been brought in through online 'sales' according to the figures above, and all people who have downloaded it will have done it from there, as it makes no sense not to. As I have heard that there are 25 illegal downloads for every legal one, I think that this was a resounding success.
N. English, Birmingham, England
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