The recording industry is an easy target for an example of “getting it wrong” when it comes to understanding their customers. In the digital age it is as easy as going to YouTube or opening a P2P program to download your favourite song in seconds. When downloading first became mainstream with Napster and Kazaa, the industry responded with lawsuit after lawsuit, instead of trying to understand their customers. It seems that the industry is still stuck in their old ways , but the musicians are figuring it out for themselves.
According to an article on billboard.com, Radiohead seems to be “getting it” when it comes to understanding their audience. If people are going to download their songs, they might as well make it easy for them to get their songs legally. On October 10th you will be able to download songs from their latest album “In Rainbows” off their website, and you (the consumer) get to decide what you want to pay.
At first glance, this seems like an odd model to work with, but upon further inspection it makes sense. First of all, it seems that artists get very little of the $19.99 price tag on the CD, roughly 72 cents; the real money is with the lucrative concert tours. Having figured out that their customers will download the song anyways regardless, they had to figure out what else a customer would want to buy from them. Instead of offering you the standard CD only purchase (which you can easily replicate yourself), you can get their new album on CD, a vinyl record and a second CD of additional photos, artwork and lyrics, all packaged in a “discbox”.
Radiohead isn’t the first in the industry to try something new, but they are definitely on the right track. Hopefully the rest of the industry will look at this as a best practice and change their tactics.
This move will play on the psyche of an entire generation of people that have used the web as their main channel of discovering new music. I just hope that when this is all said and done, Radiohead will release the figures of what the average person actually paid. These numbers will make every label in the world shit themselves. Well, maybe.
Also, this move will raise questions about the seeming slap in the face to record stores. At first, I really thought that indie stores will be super pissed and burn Radiohead records in the streets. Well, not so fast. If you stop and think about it, this entire packaging scheme actually drives the value through the roof because Radiohead fans will absolutely go to stores to purchase this uber-cd release. I hope indie record stores take a deep breath before they start smashing Radiohead records in the aisles. With an actual product of value and uniqueness, Radiohead may actually have an incredibly positive impact on driving traffic to record stores. Everything just changed. In the not so distant future, just putting an album out on CD in a jewel case will no longer be enough. Could the box set be the future of physical products?
The last bit is the utter disregard of lead time in press. They are totally avoiding leaks by putting this out all at once. When I first started thinking about this, my immediate concern was that, with no press time, who the hell is going to write about it and review it? It was at this point that I logged into my RSS feed reader to see if anyone was writing about it. Every music blog in the world had a bit about it. It is a music press coup unlike anything the world has ever seen. Most notable and interesting of all, Billboard didn’t have a post up about it when I first logged in. Only music blogs. Fans of music. Mainstream press, the folks the industry as a whole is aiming to please is now on the backside playing catch-up.
Have the labels (or anyone else) ever considered a pay-as-you go system? I would be very interested to see a file format that lets you listen once free, then charge a nickel per-listen up to some price cap ($.99?).
It’d be successfully monetized by standardizing a method for tracking listens, not restricting where it can play.
This way I can try music out, and if I like it (who doesn’t come back to music they like with some frequency?), people make money.
Porter –
Although the idea of a pay-as-you go system sounds appealing; it would most likely be fairly difficult to implement. You would need the support of a platform like iTunes to be able to track and deduct from an account (so as to reduce transaction costs). I agree though that a system that fairly compensates artists for songs you “like” and is legal makes logical sense. The question is which models can be easily rolled out, and make economic sense?
What about a global license fee?
Like the music industry, I would definitely be skeptical of a state-imposed license fee. What would be the state’s incentive here?
Also, wouldn’t it have similar infrastructure challenges as a pay-as-you-go system? (Or, is the global license fee a “one price fits all” mechanism, at which point it’s socialized entertainment spending?)
I would think that “simple” upgrades to current music playing software would effectively do the trick. Integration with a service like Gracenote could also help identify and tie music of varying formats and sources back to the appropriate content provider.
Of course, I would want to see that artists are getting a fair share, too - since we’re dreaming here. (This would encourage consumer adoption, actually.)
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