Radiohead Use Supply And Demand To Sell Music Online
The music industry is rapidly changing and music distribution is going to change alongside this
. It is very important for the wider music community to understand that the way we listen to music is developing and that we cant continue to by and sell music online in the same way as before. This is not something to panic about. It is just time to re-evaluate how to promote a band in this new era of technology and online audio samples. New bands will need to find new ways of promoting their new music. What is obvious is that we need to think outside the box. New music websites such as Songeist.com are thinking about this and producing new ways to sell music online with an emphasis on supply meeting demand. Id like to take the example of Radiohead and the way that they decided to sell music online as an example of how these music distribution techniques can be implemented. How can we get those who listen to music for free to download music and pay for it? If we cant figure this out the music community is doomed. There will be no new bands or new music because they will not be able to sell music online and therefore will not be able to make a living from their work.
So back to Radiohead. According to an article on adage.com, their manager, Bryce Edge, who had worked with the band since 1991, came to a conclusion in his negotiations with EMI.
"They weren't prepared to give us control over how the catalog would be sold and marketed," says Mr. Edge, who met with Warner Music Group, among others, before deciding that the band's influence over how their music distribution was handled should be of primary importance.
"It was totally a gut-instinct call," he says. "The idea came from trying to solve the problem of the band being very picky about how and where they promoted themselves and looking to prevent the new music from leaking onto the internet before release."
The group announced Oct. 1 that they would accept orders to download music track "In Rainbows" and allowing fans to pay as much or as little as they wanted. In addition, fans could order a deluxe "discbox," with a CD/vinyl of more new music, along with a photo book, for $82 to be delivered in December.
When word got out about the Radiohead plan, music websites and bloggers drove buzz and linked to the website. Crucial to the surrounding media event, fans who purchased the download were alerted they'd receive instructions on how to fulfill their orders within 10 days.
That waiting time was one of the fortuitous elements of the promotion; Mr. Edge says if consumers were given access to the new music right away, they might not have paid for it. "Psychologically, it helped people consider the value they put on a Radiohead download," he says.
While Mr. Edge so far has refused to release official data, according to ComScore, 1.2 million people downloaded "In Rainbows" during that 10-day period, and 68% paid nothing, but 32% decided it was worth from $1 to more than $15, with estimates of the band's take at $6 million to $10 million. While calling those claims exaggerated, Mr. Edge says a "little less than 50% paid a reasonable amount of money," and the band made "twice what they would have in a traditional record deal."
Radiohead also has harvested an invaluable database they can use to keep in touch with fans -- announcing a remix contest for new single "Nude," for example.
The physical album, on Radiohead's TBD label, entered the U.S. chart at No. 1, selling 122,000 copies, with 25% of those sales as iTunes downloads at $9.99 apiece, certainly a curiosity considering fans could have had it for free three months before. "It just shows there's still a market for CDs," Mr. Edge says. "And they sound better than MP3s."
Factoring in a summerlong tour that started this month, Mr. Edge says Radiohead will net about $25 million this year. While he acknowledges "there aren't many bands with a worldwide, hard-core, active fan base" who could do something similar, he doesn't discount the efficacy of the download model for a new group.
"Every time you make a fan, be sure to hold onto them," he says. "Get their details and keep in communication. You don't need more than 50,000 of them to make a business model happen. The future is in micromarketing, selling directly to your audience. That way, you won't be at the beck and call of the major-label checkbook."
by:John Robert
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