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.