Is Radiohead making a mistake?

Radiohead is a pretty savvy band.  They have remained aloof enough that there’s still some mystery around them, but they know how the stir up publicity with a well-placed announcement.  First news of a upcoming album from a band of their size and reputation is always going to be a big deal, but the announcement of neither In Rainbows nor The King of Limbs would have seemed nearly as momentous had the band been regularly tweeting from the studio or talked more specifically about the time frame for their next album.  The announcements both felt so sudden, and that surprise was amplified by the narrow windows between the announcements and digital release dates.

That narrow window is a smart play, too.   Radiohead is well past the point where they need interviews, profile pieces, and glowing reviews to sell albums, so why not just release the album when it’s ready and let the critics hear it at the same time as the fans?  That strategy builds the hype since any Radiohead fan with an internet connection can hear the album on exactly same day.  There’s no trickle of leaks and advance reviews in the build up to the release, so everyone is coming to the album fresh.  It’s unexplored territory, and that makes it more exciting.

There are serious financial benefits, too.  Radiohead are savvy in that department as well.  The release strategy of In Rainbows and The King of Limbs both acknowledge the inevitability of leaks and seem designed to wring more money out of an album by accepting that inevitability and working around it.  When you bought a digital copy of In Rainbows, you were essentially paying for a leak.  I think it’s pretty likely that more people are going to end up buying your album if it hasn’t been floating around freely on the internet for weeks or months before it’s actually available for purchase.

Here’s what I don’t understand, though: what does the band gain by retreating from the In Rainbows pay-what-you-want model?  Are they actually going to make more money off of $9 digital downloads?  It seems to me they will almost certainly make less.  When you charge $9, you’re entering the realm of iTunes and other legal downloading services.   The people who don’t want to pay for music aren’t going to be paying for the download, they’re just going to wait for the pirated version that will hit within the half hour.  With In Rainbows, there was the chance that someone who would ordinarily never have paid for the album throwing a dollar or two their way.  Those people will be absent this time around.

Of course, the band has remained pretty tight-lipped about how many people actually paid for In Rainbows.  It could have been much lower than what has been estimated.  Maybe they feel they can make more by fixing the price at a more conventional retail number.   I might be naïve, but even taking this into consideration, it still seems like they’re making a mistake.  The $9 price tag puts them in the same purchase vs. piracy zone that has torpedoed record sales, but a lower fixed price might not result in such clear cut decisions.  Just look at Amazon’s $3.99 discounted downloads, which have been credited with boosting first week sales of albums by bands like The Decemberists and The Arcade Fire.  Either of those bands might have hit number one without the Amazon deal, but they probably would have sold a lot less albums.  You’re never going to convince the majority of music listeners that they should go back to spending $12 on a CD or $10 for MP3s, but you can convince a lot of them to spend $3.99.  That might sound appalling to some fans and many artists, but if that stimulates album sales, how is it a bad thing?  The old model isn’t coming back, so there’s no point in stubbornly sticking to the same prices on principle alone.

The digital price isn’t the only thing that’s changed, though, so maybe that played a part in the decision.  The $80 deluxe edition of In Rainbows apparently sold very well for the band, so maybe they’re banking on the $48 equivalent version of The King of Limbs to do even better.  This sounds suspect to me, too, though.  The number of people who are willing and able to drop $48 on a deluxe edition of an album doesn’t seem like it would be significantly larger than the group that paid $80 for In Rainbows.  They are still courting the superfans with plenty of disposable income.  Maybe if the price was closer to a normally priced vinyl record it would be different, but you could do a lot of damage at your local record store for that much money.  Will they sell significantly more of these to make up for the increased number of people that will probably download their album without paying?

Offering a thoughtfully packaged physical product is obviously a great idea.  The rise in vinyl sales is clear evidence that there are still plenty of people interested in a physical product as long as it has worth beyond being just an intermediary between the music and a hard drive.  That part of the release makes total sense.  So does offering a better quality digital version at a higher price.  Listeners are generally more aware of the quality of their digital music than they used to be, and since the average storage space on digital devices is constantly rising, most people can afford the extra megabytes.  I just believe they are leaving money on the table by raising the base download price and turning off a large section of their fanbase that might be willing to buy at a lower number.

I’m sure Radiohead has consulted with people who understand the math behind this far better than I do.   They also have the benefit of knowing how many people paid or didn’t pay for In Rainbows.  It’s just not clear to me how this is a profitable way of putting their music out.   I’d love to hear an explanation if you have one.

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    • bh
    • February 14th, 2011

    not to bash, but you are completely wrong about this. BECAUSE they don’t tweet and overstimulate their fans, there is more of a demand. the mystery of the creative process of radiohead is part of the appeal.

  1. I think you just misread, because that’s exactly what I was saying:

    “the announcement of neither In Rainbows nor The King of Limbs would have seemed nearly as momentous had the band been regularly tweeting from the studio or talked more specifically about the time frame for their next album”

    The aura they have created around themselves means that the announcements they do make have a much greater impact. If they had been providing constant updates on the album, a title and a release date would have just been routine. The release plan would have still been a big deal, but not to the same extent. That mystery definitely heightens interest in the band.

    I’m curious, what about the post made you think I believed otherwise? If something is unclear, I would like to what it is.

  2. Not to mention what seems like a calculated move: announcing the new album release the morning after the Grammy’s. Way to steal the thunder Thom! 🙂

    • Alex
    • February 15th, 2011

    Yesterday I pre-ordered the ‘Newspaper’-packaged album w/ the .wav download. $53 – In part, because I didn’t pay anything for In Rainbows (or ~cough~ their other albums). These days, though, I’m totally on-board with savoring and cherishing the physical artifact of the music I love, especially if it comes in creative/original packaging (thank you for your reminders, Steven Wilson!). Albeit, I personally am gradually becoming more capable of affording the important stuff like this. 🙂 I’m excited.

  3. While this is no doubt a calculated move on Radiohead’s part, I secretly want to believe it’s because they found the pay what you want model distasteful. I fully understand and accept that it’s a legitimate business model, but the fact that it’s predicated on the idea that some fans are willing to donate more and that those fans financially carry those others who only pay little or nothing at all, never sat well with me. With that said, if I was in a band I’d go pay what you want, so there you go.

    • That’s an interesting point about letting the willing fans carry the burden. It’s mitigated somewhat by the $48-$80 packages, though, where you have people electing to spend way more money on a different product. I think those purchases are what ultimately made up for all the free downloads.

      It’s very possible they found it distasteful, though – they definitely said they would never do it again fairly early in the In Rainbows cycle. Maybe the decision really wasn’t financial and they were just uncomfortable with it.

    • Emrah
    • February 18th, 2011

    Just listen and think and enjoy or hate. Most people dont give a f… about how an album is released. And how much will it cost. If i have money i buy it. If i dont i download it. If i try to buy every album i like than i have to pay like thousands of euros. But if its radiohead i will pay whatever i like or whatever they want. Just because of the experience they gave me in the past musically. Thats it. Nothin more…

  4. Radiohead are one of the few bands whose sales seem to reflect the actual quality of their music.

    As I blogged earlier, they’ve built up a die-hard fanbase through doing a lot of groundwork before they were famous, for which they’re reaping the rewards now because people are willing to spend money on the band.

    I’m just pleased and relieved that it’s actually a good record.

  5. You make some good points, but you have to realize that Radiohead was extremely lucky with their previous pay for play scheme. It was so new and well reported in the media as an effective promotional and marketing strategy for all music.

    But now most of the hoopla surrounding pay for play has ended and even Radiohead has to live with the diminished record sales that EVERY artist in the music business is dealing with from 50 Cent to regional artists like So Many Dynamos.

    To me, it’s not a question of whether or not their release of King of Limbs will be profitable, it’s more at what pt will Radiohead be affected by the current ills of the music business and when will their bottom line also decrease.

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