Radiohead addendum: Quick Math

Comscore, an Internet measurment company, released a report earlier this week detailing some data from Radiohead's pay-what-you-can marketing stunt. Here's a quick recap:

1.2 million people visited the site in Oct.
62% of people paid nothing.
38% paid something.
Of that 38%, the average paid was $6.

Coverage of the report has been predictably skewed, with many - including the report's titular jab at freeloading - concluding that the experiment was a failure, that the poor results confirm that the tip jar model just doesn't work.

Here's some quick math:

- 38% of 1.2 million paying $6 = $2,736,000 (almost all of which goes to the band)

Or, factoring in the 62% who paid nothing, the average price people paid was $2.26:
- 1.2 million paying $2.26 = $2,712,000

Hail to the Thief sold 300,000 in its first week. If it continued at that pace for the whole month (which it didn't), that gives about 1.2 million. Or, for even more fun, let's assume that Radiohead could sell as much as Kanye West's Graduation (which it couldn't, Graduation was the highest selling album in 4 years). It moved 957,000 units in it's first week. It moved 226,000 the week after. It continued to decline. Again, 1.2 million in the first month is a good guess (but incredibly high estimate for CD sales).

- 1.2 Million units at $15 - $18,000,000

Of course, not all of that goes to the band. Usually bands get a 10-15% cut. Higher, obviously, for bigger bands.

- 18 million with 15% cut = 2.7 million
- 18 million with 20% cut = 3.6 million

Set aside the fact that Radiohead was doing this as a publicity stunt, some pre-hype for their upcoming CD release. Even at 38% pay what you can, the band made about as much as if they had released it traditionally. Sure, being Radiohead, they may have gotten more than a 20% cut. But, being Radiohead, they probably wouldn't have sold 1.2 million physical copies of their album anyway.

Radiohead Addendum

Here's a range of commentary on Radiohead's marketing plans:

The first, is a fairly generic article from two weeks ago, talking about how the band is changing the rules of the game

The second, from MTV news on release day shows how some fans are a bit sour over the low quality audio files, and over the realization that the files are just digital placeholders until the album comes out (which Radiohead expects them to pay for, again)

The third and most vehement, from the eternally cranky Bob Lefsetz, blasts Radiohead for duping fans with a marketing scheme (far greater than one any label could have concocted).

The interesting thread here is not that people are angry. It's that people somehow feel cheated that the electronic launch of this file is actually just marketing. Its not some kind of sonic or industry revolution, as they had hoped (though, as I said in the last post, it will have a relatively revolutionary impact: people paid for digital files).

Almost every digital music file online, whether it be streamed on myspace, sold on band websites, or available for download from an mp3 blog is a piece of marketing for other things the artist in question is doing. It may be band-driven promotion or user-generated hype, but it's rarely the end goal.

If you bought In Rainbows, you weren't duped. You got what you paid for. Which was up to you.

In Rainbows - Marketing Radiohead Style

I'm listening to the new Radiohead album, In Rainbows, that I *bought* yesterday from their online store. If you've read any paper/blog today, you know the deal. Radiohead are finally without a label and have decided to release the album themselves, online. Perhaps more radically, they're letting fans set the price. All you have to do is go to their website and, server crashes notwithstanding, pick the price.

I'll spare you my opinion on the songs, since describing an album after only 24 hours of listening is at best futile and bound to be inaccurate in the long run. But I will talk the album's marketing, or rather, its anti-marketing, since that may be ultimately what's most interesting about In Rainbows.

Radiohead have long been masters of anti-marketing. After the intense press hype and intensive touring schedule for Ok Computer the band had a near meltdown. Their follow up album, as a result, was a different album (complete with electronic glitches and odd time signatures) that was marketed differently. For Kid A, Radiohead abandoned traditional music videos, pre-released radio singles, and they did very little initial touring. Instead, they held private listening parties and used their website to update fans on the development of the album. Kid A’s semi-secretive campaign created an air of intrigue that became an important statement about the band. Far from a lack of marketing, Kid A’s anti-marketing said much about Radiohead and positioned them as avant-garde, anti-corporate musicians.

Now, sans label, Radiohead is extending this strategy even further. To get the word out about the new album, they've relied solely on touring, their website, and the immense peripheral press (mainstream and online) that comes from a band as huge as Radiohead deciding they're going to let fans set the price they're willing to pay.
But they've also had over a decade of brand building done on their behalf (courtesy of Capitol/EMI). Without this, they could never have pulled this stunt as successfully as I'm sure it will work out.

And it will work. People will pay, because Radiohead represent a valuable product (in the eyes and ears of its fans). Also, the faith they are placing in their fans shows a level of respect for their fans not seen elsewhere (like the 6 recording companies who just last week sued a woman $222,000). Radiohead realize that people can and will get their product for free. Rather than fight through legal or technological means, they simply created a mechanism for people to show their appreciation, should fans feel its worth it. Importantly, this appreciation goes directly to the band, not through any label or (apparent) middleman. This only increases the likelihood people will support the initiative.

With Kid A Radiohead successfully convinced consumers the band was anti-corporate and unbranded, despite being on the roster one of the world largest recording labels. With In Rainbows their greatest achievement will be that they got consumers to pay for a product they increasingly frequently get for free. It's just too bad Radiohead didn't go the full 9 yards and allow fans to sample the work before deciding how much it was worth.