My friend PJ went on a trip to Australia and told me about a bar-owner who allowed customers to pay “whatever they wanted” when they had finished their drinks. The bar is still in business, and PJ ended up spending some good cash there. The bar-owner’s ability to stay afloat has to do with the type of people who come to his bar, of course. It’s the same with most industries: we generally pay what we feel a good or service is worth. If it’s not worth the price, we stop buying until the price is right.
This particular Australian just happened to trust his customers. In a way, this is a brilliant bit of marketing. Radiohead is releasing a new album in 10 days, and their marketing will not be done through any label or PR firm. They will rely fully on the relationship they have with their fans.
Ever since we figured out how to squeeze audio into a tiny file playable on any computer with a soundcard, we started breaking down the walls of the music industry. The industry leaders stood strong as Napster, CD Burning, MySpace, BitTorrent, iTunes, and other technologies started tearing down their walls, leaving them cold and naked inside.
The system consists of a listener who buys a compact disc, whose money goes to an assortment of companies and people. Everyone from the people who manufactured the disc to the artist who designed the cover gets their cut, leaving the artist with a small amount for themselves. Digital music seemed so detrimental to this model because without a physical CD, the good became intangible. The industry, after a lot of pushing, finally embraced digital downloading, if they could restrict the sharing of files with DRM.
If Amazon broke the rules earlier by selling cheaper, quality, non-DRM digital downloads, Radiohead just rewrote the rules. The release of their new album was announced today, as well as the news of how it will be distributed. It’s available for download only, and it costs as much as you feel the album is worth. Yes, this means you can enter in any value when you order the downloads. They’re not signed, so they’re probably seeing most of the cash you spend on them (or they’re at least seeing more than they would on a label).
My guess is that most people will choose to get it for free. My second guess is that many will pay more than they normally would for a CD. It probably won’t be enough to outweigh the amount of people getting it for free, but it doesn’t matter. Radiohead will make a profit, and they will do so without a label backing them.
They won’t even need to pay for traditional advertising. They won’t need posters, banner ads, promo CDs, or anything of the sort. The internet’s social networks will carry the entire thing, and this remarkable story will spread like wildfire in the next week. Their message will be clear: we don’t need you, music industry.
Way to go, guys.
EDIT: It would be cool if Radiohead gave this concept a name, like “variable value” or something. That way, other bands can copy them without feeling like poseurs.
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