If you want Radiohead's new direct download CD (see 10/1 entry below) you'll have to pick your price. What should it be?
Radiohead is letting fans determine the price they'll pay for their new album "In Rainbows." But...maybe devotees are paying too much. According to a poll by UK music magazine NME, the average fan says they'll pay $10 for the 10 song download. No surprise, this is the existing pricing model already developed by itunes.
Here's what making the average CD costs, according to the Almighty Institute of Music Retail (real name). At retail, the average price is usually $12-$16. To manufacture, distribute and sell in a bricks and mortar store costs about $6.40 per CD. Online distribution eliminates almost all these costs. That's why itunes is so tremendously profitable.
Radiohead has eliminated even more costs by dropping their label (EMI) so there's no need to share costs or profits. They may be able to distribute an album for as little as $3.40 (The Wall Street Journal 10/3/07). What's most important is that the band has eliminated distribution AND almost all marketing costs to date due to their viral strategy and tremendous "name your price" coverage on the internet and beyond.
Most everyone I've asked that likes Radiohead (but are not rabid fans) says they'll pay $5. Maybe not the $10 NME has found....but certainly a profitable venture. What will/would you pay...and why?
Wednesday, October 3, 2007
What Should You Pay for Radiohead's "In Rainbows": $10 or $5?
Monday, October 1, 2007
Radiohead's New "In Rainbows" Marketing: Revolutionary or Monumentally Stupid?
Just another sign of the growing power of the internet.
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Radiohead is introducing a sales and distribution model that's either revolutionary or monumentally stupid. The band is self-releasing a brand new 10-track LP, "In Rainbows". It will only be available for the first two months as a digital download and only via the band's official website. Most important, forever iconoclasts, Radiohead has decided fans can pay whatever they want.
"It's up to you," appears on the checkout page after you click on a question mark next to the price. (There is, though, a $1.00 credit card transaction fee)
If you want something you can touch and feel (and have the big bucks), there's the "In Rainbows" discbox available on Dec. 3. It's about $80 and includes the digital download material and an extra album with eight new songs. The discbox will also include a double-vinyl record, photos, artwork and lyrics encased in a hardback book and slipcase.
The 10-track digital download can be accessed on Oct. 10. It can be preordered at http://www.inrainbows.com
