Radiohead shafted by freeloaders

"it will be interesting to see if this “name-your-own-price” idea is ever used again."

Don't see why not - Magnatune have been doing it successfully for years.

Slight differences in the model :

1/ Streaming playback so customer can check music out prior to purchase.
2/ Suggested fair price, overrideable by customer.
3/ no registration, just straight to CC details/Paypal.
4/ Choice of formats, including mp3, ogg, wav, flac
5/ Option to license music for public use/broadcast.

Not to mention it's *real* indie music - independent, no labels. Written as music not a product; niche audiences, broad range of genres. A few years ago I found the artists to be pretty dire...but on rediscovering the site recently it seems that things have changed enormously, for the better.

Seems to me that Magnatune have got their model absolutely right where RH made a few mistakes. Perhaps RH should just have released "Rainbows" on Magnatune.

...at the top of the page reads

A bore is a well you wish you'd never fallen into

Sorry, did someone say something?

So...

These guys get to take home $2.7000.000,- for no substantial investment, *and* get a bunch of contact information into the bargain for their demographics analysis pleasure, and they are *moaning*?

Furrfu!

That's quite a nice pay-check! Even if they spent a whole year working on their album and they had to split the $2.7M between band members.

...Plus there's the priceless bonus of them being able to look themselves in the mirror and sleep peacefully at night since they didn't rip-off anyone while earning those 2.7 million greenies.

Trent Reznor as already stated he intends to release his next album in essentially the same way.

The real question would be what would Radiohead have received if 1.2 million people had purchased the album through the 'normal' channels at 'normal' retail prices.

Did Radiohead make more or make less with this?

Do you really think Radiohead is going to be disappointed by over 2.5 million in profit? And, if they keep the site, they'll continue to accrue income from the album. Any complaining about "only 40% paid" is assuming that those other 60% would normally have paid for the album.

that Radiohead would have receieved less than a dollar pr. album, sold maybe half a million albums, if they had been on a big label, I'd say they came out pretty much on top.

Besides, the quality s*cked. If they had had the option of downloading, say, FLAC, maybe people would have payed more.

And the averages aren't that bad. I suppose they reflect what people think an album should cost, at least one with no cover in worse than piratebay quality...

just my, what was it? dollar fifty?

How many record sales would they have had to make to earn the same amount through a record label?

Who is really ripping people off, the Record Lables or the public (willing to pay fair price for fair work).

Who are Comscore? Who commissioned their "research?" What is their agenda? Why should we care what they say? A straight regurgitation of a "press release" with a comment amounting to "gee that's interesting" is not what I would call great journalism. I would expect The Inq do dig around a bit more.

Another thing that bothers me is nobody SEEMS to have gone to the trouble of actually asking Radiohead themselves for their take on the matter (are Radiohead keeping mum?). They have the most reliable information regarding the number of downloads and payments. Until they go public with their own figures all we are going to get is FUD from various parties with vested interests in this business. Maybe Radiohead are too busy counting the ridiculous amount of money they made in comparison to previous album releases?

They still probably made more money than if they got the record label to sell it on Itunes

how many downloaded the album without paying because they wouldn't know a RadioHead song from a swan song?

When you consider how little artists are paid by RIAA when music is downloaded online, this could be more profitable for the artists AND make albums way cheaper.

You gave me the freedom to tell you how much I wanted to pay, and then complain about my choice? Sounds like the past two US elections. BTW, I deleted it soon after listening to it.

I purchased "In Rainbows" but I paid very little (around 1 USD) for two reasons:

1. I've never heard the album before (radio, music subscription service, etc.) so I wasn't sure if it was going to be an OK Computer masterpiece, or a drab "Hail to the Thief".

2. The low sound quality means I'll end up buying the CD eventually, so Thom and Co. can receive my monetary "thanks" then.

Even on my mp3 player I can tell the bitrate is a bit low.

Of course, all the article does is split hairs over how much people were paying for the album, with particular emphasis on how they weren't paying what would be considered "full price" by the record companies. This conveniently leaves out the reported fact that Radiohead has made approximately $8 million off the sales so far. Pray tell, how much would they have made had the album been sold through normal retail channels? This experiment has been a resounding success, and the record companies should be VERY worried about now.

The numbers here aren't complete (what is a "significant portion"?). But the "free" album seems to have brought in most of a million dollars. If Radiohead had instead released the music as a CD, they would have had to shift around-about a million CDs to net the same money. 

So they've only been "shafted" if you think they would have shifted significantly more than a million CDs. Really? With only 1.2 million visitors to the music site, I have to wonder where all those supposed CD sales could have come from.

I could use a million-dollar shafting or two. Where do I sign up to get one?

i can only speak for myself, obviously, but i didn't even waste the space on my hard drive for free copies... i can listen to a monotonous turtle that doesn't even come out of it's shell and enjoy about as much as i enjoy radiohead music.
however, if, say, glassjaw (daryl palumbo) was to come out with a new CD under the glassjaw name and style, i'd prolly fork out about 20 bucks just to support good music.
hope people don't give up on this sort of idea, it was a good idea, just not my taste...

Well i tried to pay. First of all they wouldn't take my AMEX, which is the one i always use online as it's international. So i gave it a shot to a mastercard i think, that i never use online , it didn't work, no surprise there as it's it's meant for Costa Rica only. So I say great idea, poor execution on the billing side of things.

I've heard that the digital download is a much lower quality than the physical album you can buy in shops. Maybe I'm wrong, I'm not a fan.
In any case, that is still more than two and a half million revenue for the artists, which is a respectable sum from a personal perspective.
So it can pay off to do almost-free, but I would prefer that the digital version be of comparable quality to the CD.
A pipe dream these days, I know. But I can still dream.

OK, 40% paid for it, but how many people downloaded it and then found they didn't like it? Would they pay for it?

A more interesting figure would be the % and price paid by people who genuinely wanted the album, i.e. excluding the tyre-kickers from the numbers.

The idea will be used again. In fact didn't Cliff Richard say last week that his next album will be distributed in the same way?

Let's break out a few points here:

1. Despite the number of downloaders getting it for free, and others paying less than retail, Radiohead have probably made substantially more per buyer than they would have through a record company;

2. The album will be retailing through shops, just not yet. It's quite likely that a fair proportion of people who downloaded the lowish bitrate MP3 for free were taking the try-before-you-buy approach, and will buy the retail version for the better quality;

3. The "pick your own price" approach was a publicity gimmick. It worked, spectacularly well, and drew a lot of media attention to both the album launch and to the downloads market. Offering music for free isn't likely to become an industry standard, but it does encourage groups to move to a direct-sales model, bypassing the RIAssA, etc., and I imagine the minimum price will probably settle at around £2-3 ($4-6) per album. Kudos to Radiohead for taking the (small) risk, and boosting the direct and online markets.

Radiohead aren't the first nor, I suspect, will be the last. Saul Williams released his new album for free and at a better bitrate (192). If you paid you could get a 320 or flac copy.

don't forget cliff richard!

This is nothing new, and it works - look at Jamendo.com - music is free, but you can donate if you want.

Saul Williams is doing the same "pay what you want" for his new Album Niggytardust.

Though his spin is that you get better quality version if you give over $5

Surely the real irony here is that Radiohead, with all their anti-capitalist sentiment, have generated a tidy sum in processing fees for the company handling their payments. All those people who "didn't pay anything" still shelled out 45p, which adds up to a cool half a million by my reckoning. Not a huge sum maybe, but a sizeable chunk of the band's profit - even using PayPal would've been cheaper.

As for the album itself, I found it pretty underwhelming, despite being a total Radiohead fanboi. But it was well worth the £3 I paid for it, if only to stick it to the music industry. As an independent musician myself, I'm glad we're finally getting around to cutting the leeches out of the equation, and getting the money straight to the people who deserve it.

It sounds like Radiohead did a lot better than they would have in a record store. While their fans may have gotton off cheap, the money went to the band. The people who didn't pay at all, they wouldn't have anyway. Those who did pay $4 to $8 paid many times what the recording industry actually passes on the band.

...should have been the headline. What's the cost of producing an album and running a server anyway? I'd say with $2.7 M in gross sales in under a month, with a very low per-paid transaction cost, Radiohead did *very* well!! I was never a big fan, I liked a couple of their tunes, but most of the stuff I downloaded in the past off file sharing sites (I'm in Canada, so don't preach to me about it being illegal) really didn't grab me. I downloaded In Rainbows for free, and there's about three songs on it that I can honestly say I would listen to more than once, most of it I skipped past because it was a little boring. How many of those downloaders felt the same way? How many of them are now exposed to Radiohead's music and might become future paying customers? Nobody knows, but I'd say there are some. So take the number of people who paid, and average the gross amount of money they made aver that quantity, and you'll have a much higher $ amount per download. Thos are the people that Radiohead is betting on, and I'd say their bet paid off huge! The only ones this hurts is the record companies who really really really need to redefine what their value proposition is to artists and *more importantly* to consumers. Distribution and promotion are the two things they bring - are they worth 80-90% of CD sales? Time will tell, but Radiohead scored big with consumers here I'd say.

What I don't think alot of people in the industry understand is that - alot of people that downloaded it for free may not have been ones that would've purchased it anyways. I have never been a Radio Head fan but considered "buying" it for free just to check out their music. If I liked it and became a fan - concert ticket sales, t-shirt maybe older albums would be things I would purchase. 

They expect to sell X copies and when alot of people were taking it you gotta wonder just how many were people that weren't fans but just curious about their music.

Also, with this self online distribution why not sell the album at a flate rate of say $6. A steal for consumers and the band gets 100% of the sales. I don't understand why with PC games and digitial dist. like Steam are they still charging full price. I pay $50 and get packaging, disc, manual or $50 and get a downloaded version!?? Make the digital dist. $20 less and alot more people would be buying this way. 

Back to the Radio Head thing I think that the industry must understand alot of people that downloaded their album for $0 probably weren't fans of the band that would've bought the album anyways...


They went about this the wrong way. They should have charged at least $1 for it, when the user had the plastic out, the user most likely would have donated more than that. Most people dont want to pull out a card for anything less than $10.

It's hard to say this is a good/bad sales model.

Personally I paid 0.01 for it. All Radiohead's stuff since OK Computer has been rubbish, so in effect this was me giving them a 2nd chance. If it had been a band I like, and consider consistently good, I would have paid full price.

The new album is rubbish, so even if they use this model again I wouldn't bother downloading it, even for free.

It would be interesting to see how this would work for a more mainstream band/act.

A friend said he would have paid, but they needed you to register, which he wasn't prepared to do.

So he downloaded it from a peer-to-peer network instead.

Can't beat free, eh?

How much would the musicians have made if they sold 1.2 mil albums? Maybe it is a viable option.

an album sold nets the group/artist about $1-3 each. this is on par with what they get now, sans the contracts and such. they were hardly shafted.

Will this strategy be sustainable? No fees for the record company, but low margins too. Can it pay the recording, web hosting and salaries for about 2 years?

What if the album is REALLY good, the band's masterpiece. Wouldn't this percentage change somehow? People would pay (actually donate) if the album were really good. If it's not, people download, check out, nothing special, leave without paying. Am I right?

I paid around $4 USD for the downloads, I guess making me a cheap American. I would have paid more if it had been encoded at a higher bit rate than a barely acceptable 160 kbit/s. However, I enjoyed the download so much, I coughed up another $85 USD for the deluxe CD and Vinyl LP package. So much for being cheap...

Shafted? 

Yeah, hell whatever.

I'd like £~ashedloadacash.00p in my bank for skipping the agents and label fees on the work that I do.

No I didn't pay for the download.

Then again, I haven't actually listened to it yet either.

OK, the above statement doesn't make me out to be a good guy, or a freeloader (if there is such a thing in this round or Label Vs Artist wrestling) in any sense, but being able to sample music, and choose my own format; and bitrate, may change my option to pay in the future.

I have been using bleep.com for a couple of years, and have a massive amount of respect for the people who decide to release their works for sale in a high-bitrate, DRM-free format.
I will continue to use this service with no quibbles - as long as the music remains worthy of my money in my opinion.

Let us not even get me started on the trail of allofmp3[dot com] - and its sad, sad demise.

A crying shame that Karmadownload [dot com] perished for such things as their belief in non-DRM tunes.

Booyah sucks to the name-riding-fee-gleaning monopolies who saw "no threat to the music industry" back when t'internet and all that goes with it, were announced - convergence was coming towards us all, not just the punters!

Your own fault for continuing to trying to rip off the very people who keep you stationed where you ought not to be.

Hurrumph.

Shonky.

That's a bit strong.
If you peddle your wares, and you ask that people pay what they think it's worth, and it turns out they don't pay much. There's always the possibility that your goods aren't worth much!!

Want proof? I didn't download it at all!

But, are we comparing the average spend against a £10 CD (shop price)? How much of that makes it back to the band? I'll bet, not much. Ok, so they've had to pay for the digital distribution. But, wouldn't it be more interesting to compare the income (for the band) per sale to how it would have been for shop rrp?

an estimate of 2.7 million bucks revenue....in a month.....well it hardly seems low when you consider this is nearly pure profit from that end of the equation compared to traditional distribution. 

I doubt Radiohead is complaining.....or maybe I'm just too poor. That's a nice monthly income if you ask me.

You have to count it the odd audiophile like myself who is waiting for the CD-release. 160kbps isnt exactly state of the art soundwise.
And, no. Not getting the big package either, just the CD for backup and superior audio quality.
Yeah, I know. I'm a dinosaur.

I wonder how that $3million from downloads, plus whatever they made selling their physical media and "collectors' editions" direct, compares to what they received from their previous, label-supported album. 

I would suspect it would be much, much higher. Wouldn't it be ironic if "Hail to the thief", released through standard means made the artists less than releasing directly to the "thieves", aka the fans and interested parties who would both not hesitate to use P2P. 

Sadly, though, no matter how well this album does, it does so on the back of a tonne of free PR - they are the first major artists to try this model and, as such, generated countless pages of commentary. Will the next 10 artists? Maybe. Will unheard of artists in two years' time succeed in getting their message out?

The answer is clearly a resounding "no". While "In Rainbows" is likely a wonderful success for Radiohead, in financial terms but also in terms of challenging the current system, there remains a place for labels - somebody must support, get airtime for and generally promote the new creations of artists alone.

Thou cannot rely on MySpace alone. 

However, what has been proved is that the labels are arrogant beyond all belief, and their worth is considerably over-stated. The future will still have record labels, but they will be smaller, and less profitable. 

Cue the world's smallest violin.

Love, Chip xx

Its funny how one place can view their experiment as a great success while another sees the exact same event as a complete failure. 

First, the sales were not set up in such a way so that you could download it first and then pay for it later if you liked what you got without it counting on two separate downloads (and if I am wrong, I guarantee someone will correct me). Second, 36-40% I would consider pretty incredible for a first effort. I am willing to be a lot of people could not believe it to be true so they tried not paying and actually received the content. If this had been a regular practice, perhaps they would have thrown in a buck or two. Lastly, how much would they have gotten for each of the 1.2 million downloads if they were recieving the standard royalties? Honestly I do not know, but I suspect 1.68/sale is not too bad if not better than the standard.

Nice way to take a positive and spin it to a negative. Bravo.

I'm a fan of Radiohead and have almst everything they've put out till now and I would happily pay 'normal' CD price for a physical disc that I can rip at any bitrate or with any codec I want and listen on a CD player too. The choice we were given, though, was 160 bitrate MP3 for next to nothing or a mega fancy special pack with vinyl and cd with extra gubbins. Can't justify the £40 quid for limted edition nonsence but can't stand poo poo bitrates either. So what option do the rest of us anal audiophiles, too cheep and cynical to cough up for marketing packs, have?

They've made more money than they would have done if they did it through a label, and they still have money to come from the physical release of the album and the Discbox, not to mention the ludicrous amount of publicity generated.

I'd say they've done extremely well out of this.

First, it is my opinion that we never want to compensate the musicians in this way for their work. What we want to do is to compensate artists. Anyone can be a musician (good or bad). The Artist is the one that makes the music affect us.

Second, according to all I have read the RIAA member companies compensate a band approximately 7 cents per song per album.

If you calculate a hit that sells a million copies the artiest is only making about $700,000 on the album. To really benefit from the album the artist has to perform in concerts, sell merchandise, etc.

From a 10 million album hit the band brings in roughly $7,000,000 dollars.

These numbers of course are predicated on the what I believe are the facts that a band gets $.07 per song per CD with the average number of songs per CD at 10. It doesn't matter how much the album is sold for. It could be sold for $12.00 or $28.00.

That makes it $.70 per album for the band. The rest of the revenue from the album goes to the RIAA member company.

I heard that Radiohead made something like $6.5 million on this new marketing scheme, for one album which didn't even sell 1 million copies. 

You could still double the revenue a band gets per song per album and still not meet this. If you doubled that number you still wouldn't get near that amount. If you doubled that you still shouldn't get near the $6.5 million they brought in.

The only way they could get close to that amount is to have a big hit that sold 10 million copies. Of course, that comes over a long period of time, that is not one of these "2-4 month sales" figures.

Many people ordered during the pre-release hype, before a bitrate was announced and album was reviewed. I think as (or IF) this pricing model matures, people will be more than willing to pay decent costs ($7-10) for higher bitrate (>220 kbps) or lossless albums. Interested to see how NiggyTardust! did as well, being the second big online distribution with high-bitrate and lossless options.

I myself being an avid "pirateer" download a lot. Movies music software whatever. If i like it ill go buy it regardless of whether or not i can download it or not. When i go to buy a cd of my favorite artist. i dont mind paying $14.99+ too much because thats my favorite artist and i want them to keep making music so i buy the cd. I would rather only pay $6-10 IF i like the whole cd. more like $5 if i dont know if ill like it or not. Lets be honest here no one likes feeling like they wasted their hard earned money. If i plonk down $15 on a cd and its 80% bullshit then im gonna be pretty mad and more likely to not buy the next one arent I? 

I didnt download the radiohead CD, i dont even like radiohead. But assuming i had any interest in radiohead at all i probably would have downloaded the cd. if i liked it i would go paypal em like $5 to keep up the good work. 

I dont think 100million$ in sales is gonna make the artist any happier vs 100thousand$ in sales if they sell the same # of cd's in each case and reach the same fans and get the same amount of respect. 

Thats just my thoughts, maybe theyre all in it for the money and want every penny.Regardless you will only be getting what i give you. nothing more. You need me more than i need your music.