Tuesday, November 06, 2007

How to Prove the Naysayers Right

Just saw this stat scroll across my TV at work (tuned generally to CNBC).

Radiohead recently released their new album independently online. You could buy the box and CDs for $80, or download and pay whatever price you wanted ($0 being acceptable).

Only 38% of the downloaders paid anything, and the average price for those 38%? $6.

SIX FREAKIN' DOLLARS? Those are American dollars too no doubt, so it's almost exactly like paying nothing.

So after years of people claiming that online distribution would kill the major labels; that people who download music illegally are more likely to buy CDs; that music lovers are generally good people and the market will pay a fair wage... thpppbt.

Granted, for 100 sales, that works out to $228, or $2.28 per album sold. That could very well be a better take for the band than EMI would give them per album.

So then the question becomes - how many albums got downloaded? When they go on tour, will this increase ticket and merchandise sales? Radiohead could end up ahead after all.

Still, a $2.28 average per album sounds pretty crappy to me. Gotta love deadbeat fans.

I once paid $10 for a single song to Jonathan Coulton after I downloaded it because it made me laugh, still makes me laugh, and I think was worth every penny. Then again, I'm a generous guy. Or maybe just stupid.

So how do you tweak this sales model? Do you allow payment after download? Ie.- you really like the album, so you might now pay $20? That's some serious honour system there. Do you set a minimum? $10? Then everyone pays that and no more, but that may still come out ahead here. Bonuses the more you pay?

Just thinking.

1 comment:

Dillo said...

Interesting post mate. I've been interested in this for years, as a die-hard music fan and someone who's worked in commercial radio all my life.

I've always felt that there are two types of people who download music or share files. 'Casual music lovers' and 'fans'. Casual music lovers are happy to sample new music for free or aren't passionate enough about a particular artist to justify the expense of purchase. Fans are more likely to acknowledge the artists' right to earn a living off their work and are happy to 'thank' the artist by paying them for the privilege of owning their music.

I'm not a cynical person by nature Astin, but the truth is that we humans are less likely to pay for something when we can get it for free. Like you hinted at in your post, if the average price paid is only $2.20 something, it's a sad reflection on us. That 38% of these 'fans' paid nothing is unfathomable, to me at least. Look I'm as guilty as most of us whne it comes to downloading stuff that I'm interested in. But I'm more likey to turn around and buy it if I like it. Soulwax and Datarock are two that come to mind.

Strangely, this model will inevitably put more money on the pockets of artists. The only flaw I can see is that the artists themselves will have to wear the costs of publicity, which normally the record company would carry.

You do make some great suggestions though. A minimum fee makes sense, as do extra tracks, demos and stuff the more you shell out.