Radiohead's Marketing Ploy Not A Stunt; Just Good Business

from the confused-people dept

Tue, Oct 23rd 2007 7:04am — Mike Masnick

Soon after Radiohead announced its plans to offer name-your-own-price downloads, the band's manager said in an interview with the Financial Times that they were doing so in order to boost CD sales. For some odd reason, this statement has apparently pissed off a bunch of people who keep submitting the FT article over and over again for weeks to say that Radiohead's decision is now suspect. However, that doesn't make any sense. As we said when Radiohead first made the announcement, it was clear from the beginning that they were trying to give them reasons to buy the CD. It wasn't a bait and switch situation at all, as they were quite upfront about it. It also isn't a bad thing. It shows the band is doing exactly what the economics suggests it should be doing: using the infinite goods (the music) to help make the scarce goods (CDs) more valuable. The band never said you had to buy the CD. It just said that you can pay what you want (including nothing at all) while also making it clear that the CD was going to be a lot more valuable to own. That seems like a smart business move. About the only mistake in there seems to be that the band accidentally made people think that it was somehow against selling CDs, even though it was clear from the beginning that the band still wanted to sell a CD version and make it worth owning.

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Filed Under: business models, marketing, music, radiohead

20 Comments

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Donald Christensen, 23 Oct 2007 @ 7:53am

Thank you
Thank-you, thank-you, thank-you for finally pointing out that this WAS NOT a "bait and switch situation". I think these rumors are started by record executives...

One request: can we all now start talking about how amazing the actual music?

Thanks!
Donald
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Trevor T, 23 Oct 2007 @ 8:03am

Werd!
In Rainbows is pretty hot. The second track is by far my favorite, and one of the harder songs to come from Radiohead in awhile.
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teKuru, 23 Oct 2007 @ 8:11am

Yes
I agree with Donald, lets start talking about how frakin' awesome the music is. I have listened to In Rainbows at least once a day since I bought it on the 12th. All this hubub about bait & switch is insanity, especially considering you can get the music for less than fifty cents.
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Music Fan, 23 Oct 2007 @ 8:44am

I think its a great idea
I think its a great business idea. I don't know who was doing it first but I know one of my favorite bands has been doing this for a long time too. "Bomb the music industry" if anyone wants to check them out.
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Anonymous Coward, 23 Oct 2007 @ 9:01am

I think all goods should be sold like this.
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JS Beckerist, 23 Oct 2007 @ 9:37am

Re: #5
Not tangible goods, but services I could see.
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- Anonymous Coward, 23 Oct 2007 @ 9:41am
  
  Re: Re: #5
  No all goods.
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Ethan Bauley, 23 Oct 2007 @ 10:23am

The Music Is Amazing + Radiohead management
I was one of the peeps that submitted the story...my only beef was that their manager was talking about how great a "value" CD's are and how much better they sound than MP3.

Come on...

Anyways, the record is definitely KILLING! Anyone that was a little turned off by the last album should check out "In Rainbows"...it's easy to swallow
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Gunnar, 23 Oct 2007 @ 10:25am

Yeah, when I first read that I thought "Man, their manager is an idiot."

Then when I saw people getting angry I though "Man, people are idiots too."
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- Ethan Bauley, 23 Oct 2007 @ 12:00pm
  
  Re: Gunnar
  Ha! Exactly.
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farkus, 23 Oct 2007 @ 10:43am

Great CD!
Hey I just happen to be listening to that CD right now. I love it, and you know I previously was not a Radiohead listener. So they have earned themselves one more listener and I am almost certain to buy the CD now.

Way to go Radiohead!
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4-80-sicks, 23 Oct 2007 @ 10:44am

re: #4
Bomb the Music Industry! I saw them this summer. They were great--loads of fun. All the kids were singing along--already knew the words. Here's the thing: They were playing in the basement of a private house, and it was PACKED. Those guys get along without a label, and they're not a big act that's been around for years and started on a label. They make their own CDs, finance the tour themselves, etc. and have a significant, dedicated fan base. Will you hear them on the radio or see them on MTV? Of course not. Even with a different name that was more corporate-friendly, they recognize that there are other venues out there, and it's working very well for them.
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- Anonymous Coward, 23 Oct 2007 @ 11:10am
  
  Re: re: #4
  Bomb the Music Indstury... I love bands with gimmicks, because the music is always so good.
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Anonymous Coward, 23 Oct 2007 @ 12:02pm

My beef is that they announced very late, like the day before release, that the tracks would be encoded at a measly 160kbps, no even VBR. I would not have paid as much as I did (~$10) had I known this in advance. I guess it is a case of buyer beware but it still pisses me off.
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- Chuck Norris' Enemy (deceased), 23 Oct 2007 @ 3:03pm
  
  Re:
  I remember, from day one, the site said download 160kbps, if you cared to click the ? button. Of course, the first time I went to purchase it gave me a list of download 1 through 10. So I thought I had to pick a price for each of the 10 tracks. Didn't buy at the time, went back later and paid maybe 14 cents for download 1 (which I thought was one track) that was for the whole album. Oh well, I will be buying the CD anyway so sorry for the being a cheap bastard...for the time being.
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sambo, 23 Oct 2007 @ 5:29pm

& they have made a packet
I also have read that it has been a huge success.

All up already they have made over $10mill & apparently if they had done this via the traditional record label distribution then they would have had to sell 10 times the volume to make the same amount of money.

I thought that according the RIAA the only way for artists to profit was through DRM?
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Steve, 31 Oct 2007 @ 1:15pm

Sorry, have to disagree
You're missing the point: Radiohead never announced that the album, when released in stores, would feature additional tracks, aside from the $80 box set's bonus disc. If they had been upfront about their plans, I would have downloaded this disc for a few bucks, then bought the real cd when it was released, considering this download a preview. But instead I paid what I thought was a fair price for an album, and now I'll have to double that when the disc comes out again with a handful of extra tracks. I feel like Radiohead, whose albums I will always pay money for, just ripped me off, and that sucks. You say they "made clear that the CD was going to be a lot more valuable to own," but they never made any such statement during the preordering of In Rainbows, it was only after they signed up with the record company that they announced a CD was even forthcoming.
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- Mike (profile), 1 Nov 2007 @ 2:24am
  
  Re: Sorry, have to disagree
  You say they "made clear that the CD was going to be a lot more valuable to own," but they never made any such statement during the preordering of In Rainbows, it was only after they signed up with the record company that they announced a CD was even forthcoming.
  
  I'm sorry, you're absolutely wrong on this. At the same time they announced the download program, they announced the CD boxset offering... They were both available on the website.
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Steve, 2 Nov 2007 @ 11:56am

RE: Sorry, have to disagree
Yes, they did make clear from the outset that there were two options: prepay at your own price for either the 10-song digital download, or pay about $80 for a discbox, which included the 10-track download, an additional disc of music, a vinyl LP and a book of art. What they did NOT mention, and the reason for the frustration, is that they planned a THIRD option: a cd with additional tracks to be released in stores for the price of an average CD (that is, not $80). I never intended to buy an $80 Radiohead collector's set, and I understand they're charging more for the discbox because of lots of added value.

But had I known the CD would be available in a month or so and would have additional tracks, I wouldn't have paid full-cd price for the download when I'll have to do it again in a little while for the additional tracks.

See this article for the quote: "Radiohead will release the album on CD in January, and its managers hinted that the physical version might contain more material."

http://www.ft.com/cms/s/0/0a9c779a-7797-11dc-9de8-0000779fd2ac.html?nclick_check=1
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