Something New

Unless you are a fan of alternative rock music from the 1990s you may not have heard about the band Radiohead and their new album, which is being offered for download from the band’s own website. It’s one of the first new ideas to come along in business in a long time, and has been called both “dumb” and “a possible solution to the illegal downloads epidemic.” Even more remarkable, it’s a possible solution that might work for both the downloaders and their recording industry adversaries – assuming that it would work at all. It’s worth thinking about.

Basically, the idea is that the new Radiohead album, called “In Rainbows,” is available for download at whatever price the person downloading it feels is reasonable. If you go to the “order” page on the website you will be prompted with an empty “price” field and allowed to input whatever amount you like, including zero. You can read the New York Times story about it here if you want to. Several of the experts interviewed for the various news stories about this venture claim that this is the recording industry’s worst nightmare, even worse than iTunes allowing people to buy the one really good track on an album for a dollar without having to shell out the other $17.99 to get the stuff that the band only recorded because they had a contractual obligation for an album with 10 or 12 tracks. Because this is, in effect, legal file sharing…

All right, so Radiohead is just giving their work away for free? Not quite. According to some of the follow-up stories, while about a third of the downloaders are not paying anything, the average price (voluntarily paid!) by the downloaders is about $8 US – which means a lot of people are paying $20 or more, because that average includes all of the people paying nothing. There’s no word yet on how many people have downloaded the album, but some of the Internet stories are claiming it’s as many as 1.2 million…

Or, if you like, something along the lines of $10 million US in sales. In less than three weeks total, since the “album” was released for download on September 30, 2007. Even better, since the band released this album without a record company, they don’t have to share any of it. It remains to be seen if the album will make as much money as some of their more traditional releases did, but it seems highly likely that the band itself will earn more on this venture than they would putting up with all of the “promotional fees” and “creative accounting” a record company would have subjected them to. But most importantly of all, there will be no losses to illegal file sharing. It is functionally impossible to pirate this album…

Needless to say, the record labels will try to dismiss this venture as a “fluke” or a “meaningless stunt” and then do everything they can to prevent anyone else from trying it. And in fairness, it will be difficult for any band that does not have six previous releases and legions of fans to duplicate this feat. What I am suggesting is that the record companies themselves are the ones who should try this. If it can be proven that the total amount paid through these voluntary downloads is equal to or greater than the amount made by selling an album through conventional channels, then the free downloads (the people who refuse to pay for the privilege) will make no difference – these are the same people who would share the files illegally in the first place. In fact, if you factor in the money that the recording industry will not have to spend trying to prevent illegal downloads, there’s a chance that this might actually be much more profitable than going through conventional channels…

And as of the end of last month, there IS something new under the sun…