New study says that 62% of global downloaders of “In Rainbows” chose to pay nothing, suggesting that perhaps a majority of music consumers feel that digital recorded music should be free and is not worth paying for.
Comscore, a consumer behavior research group, has released the results of a new study measuring online sales of Radiohead’s latest album “In Rainbows.” The album’s unorthodox digital only release challenged the music industry’s traditional distribution and sales model by allowing consumers to determine the price they are willing to pay for the album with no minimum or maximum thresholds.
Using Comscore’s database of 2 million people who have agreed to allow it to monitor their online behavior, it found that approximately 2 out of 5 of those who downloaded the album were willing to pay.
During the first 29 days of October, 1.2 million people worldwide visited the “In Rainbows” site, with a significant percentage of visitors ultimately downloading the album. The study showed that 38% of global downloaders of the album willingly paid to do so, with the remaining 62% choosing to pay nothing at all. The percent downloading for free in the U.S. (60%) is only marginally lower than in the rest of the world (64%).
“I am surprised by the number of freeloaders,” said Fred Wilson, managing partner of Union Square Ventures and well-known music aficionado. “The stories to date about the In Rainbows ‘pick your price’ download offer have been much more optimistic. I paid $5 U.S. and had no reluctance whatsoever to take out my card and pay. It’s a fantastic record, the best thing they’ve done in years. But, this shows pretty conclusively that the majority of music consumers feel that digital recorded music should be free and is not worth paying for. That’s a large group that can’t be ignored and its time to come up with new business models to serve the freeloader market.”
Of those who were willing to pay, the largest percentage (17%) paid less than $4. However, a significant percentage (12%) were willing to pay between $8-$12, or approximately the cost to download a typical album via iTunes, and these consumers accounted for more than half (52%) of all sales in dollars.
“While the band, its fans and artists alike are celebrating what looks like a success for Radiohead’s bold move in releasing their new album using the ‘pay what you’d like’ model, I think everybody has overlooked one very important aspect of this, and it doesn’t bode well for the future of the music industry,” says Michael Laskow, CEO of TAXI, the world’s leading independent A&R company. “Radiohead has been bankrolled by their former label for the last 15 years. They’ve built a fan base in the millions with their label, and now they’re able to cash in on that fan base with none of the income or profit going to the label this time around. That’s great for the band and for fans who paid less than they would under the old school model. But at some point in the not too distant future, the music industry will run out of artists who have had major label support in helping them build a huge fan base. The question is: how will new artists be able to use this model in the future if they haven’t built a fan base in the millions in the years leading up to the release of their album under the pay what you’d like model?”
This is a good question, but it still doesn’t address the issue of how the changing distribution landscape means that record labels must begin to reformulate their relationship with artists.
“The high percentage of users actually paying more than a few dollars for this download is actually pretty impressive,” said Jim Larrison, general manager of corporate development at Adify, a provider of online ad network services. “I expected the vast majority of users to download the album for free or at most a few dollars. With 40 percent of consumers willing to pony up real money, this is a true win for the music industry as it shows there is still perceived value in the digital form of entertainment. Of course it does suggest that the marketplace is continuing to migrate and the music industry needs to shift with consumer behavior. There are numerous methods to monetize the music, via shows and concerts, merchandising and box sets, commercial licensing, and even advertising; which is where the industry needs to progress towards, as the 40 percent paying for music might not be sustainable.”
As I’ve said before, I think that ad-supported DRM-free music downloads is where the future of music lies. Consumers have already become long accustomed to the idea of free music via file-sharing and P2P services and so the chance for the music industry to convince them to shell out money for music – with DRM to boot – has long since past.
Radiohead helped show the world that music labels need not fear file-sharing and that consumers will support the music artists that they like, be it by purchasing their CDs, concert tickets, memorabilia, etc..
Looking for more stuff to watch or download?
Radiohead Shocks Record Industry With Free Download of New Album
Is 2007 the year the CD died?
Trent Reznor Tells Australian Crowd to ‘Steal My Music’
Tips on how to not get busted for file-sharing
3 Quick Ways to Watch Movies for FREE!
3 quick ways to watch TV shows for FREE
BitTorrent torrent sites & search engines
uTorrent – A Beginner’s guide to BitTorrent downloading
News Tip? Comment? Suggestion? jared@zeropaid.com
Related Posts
- Manic Street Preachers: Radiohead ‘Demeaned Music’ by Letting Fans Pay What They Want
- U2 Band Manager: Radiohead’s ‘In Rainbows’ Experiment ‘Backfired’
- Sonic Youth: Radiohead’s “In Rainbows” Made Other Artists Look Bad
- Radiohead Shocks Record Industry With Free Download of New Album
- Marillion Outdoes Radiohead, Releases Album on BitTorrent
Loading ...
this is erroneous; it really shows that around 62% of people who downloaded either:
1.) truly didn’t give two shits about paying for it.
or
2.) Figured out Radiohead ripped them off with a cheap ass gimmicky .zip file of 160kps copies of the album. I could find better copies *for free* if I waited a mere few weeks until the cd was released. These people then paid accordingly: cheap gimmicky copies of an album leads to cheap gimmicky sales for such copies.
@Jay
Good point. Some of the people who downloaded it for free may just wanted to do so for the novelty of it and were never big fans.
I disagree with the articles stance on the future for new artists. As oink myspace etc.. showed us. Bands can get plenty of free advertising online so long as they are good. If your bands good word of mouth will spread and you will be able to generate the funds necessary to do all the things bands currently do. The only difference is the middle man is removed benefiting the fans and the artists. Also if bands want to try their game at the old way of doing things I’m sure there will be a new group of music investors that will loan you money so you can start a band just like how you get a loan to start a business.
Well there are many factors they must account for. Maybe the people that downloaded just wanted to show support for their album idea. Some people aren’t yet comfortable with spending money over the computer. If it is paypal you have to set up an account… wait for verification.. etc. Too much of a hassle for one music album imo. Maybe some of the people that downloaded the album were kids. You forget that there is a HUGE diff between hey let me get $20 for this CD I want… and hey I need your credit card for this album to download electronically over the internet. lol. Parents haven’t all come around to the idea either. Lastly… I don’t care about an artist being advertised etc etc. ALL of my music is word of mouth… or I will get into a friend’s car or go to their house and hear them listening to a song I like and go… hey who is that? Not… oh I was watching tv and this guy said this band is good so I must go buy their cd at target! YEAH! All in all it’s a very big step in the right direction. Also you forget how many new bands are made famous because of stuff such as Myspace etc. Without Myspace I’d be like who the hell is Tila Tequila? Etc.
So many things wrong with this statistic:
* Perhaps some fans are going to download it listen and decide if they like it and then donate if they do but they haven’t had the album long enough yet.
* Maybe some people pay for it at home but then download another copy from their work computer (or vice versa).
* Perhaps the RIAA is downloading free copies like mad to try to make it seem like only a small percent will actually pay (to try to scare other artists away from going independent.)
* Etc etc.
* Perhaps the RIAA is downloading free copies like mad to try to make it seem like only a small percent will actually pay (to try to scare other artists away from going independent.)
^^– That would almost be a sure bet i reckon!
prehaps is true what you say spurge
Did RIAA cronies download some albums for free?
You know they did. They would do ANYTHING to make this whole innovative idea seem like a bad business move.
I would like to know what they made for this album… vs other albums. Also I’d like to know how many albums that got dled off their site vs how many albums were sold through advertising. See that’s what makes a difference. If unloading 100cds people paying $5 is like unloading 500cds with a record label… you are doing good. It’s not like they had to distribute ANYTHING. They didn’t have to pay for people to make the raw cds. If the quality was higher than 160kbps I bet a lot more people woulda bought the album.
This article is suspiciously incomplete. What aren’t they saying – like how well in did in $ over how well Radiohead usually gets from their label in $?
Over half of the people downloading for free where sampling whether they wanted to buy it or how much they wanted to spend for it. There were no preview clips offered. The download was the preview.
A sizeable portion of those downloading were probably ‘new’ to the band and came in largely due to publicity. Of course they aren’t going to anti up hard earned $’s before they listened but as a result Radiohead probably converted new fans their way. That also means more concert $’s in addition to Radiohead keeping 90% of the profit they made along with their full music rights. Radiohead is not dumb.
Failing to look at the whole picture is why the music industry has lost it’s grip. Believing the music industry (or any industry) is why Congress seems so gullible and stupid.
The RIAA does not represent 90% of music sold in the U.S. anymore and they know it.
Besides whatever happened to my rights to civil disobedence to never buy RIAA labels again. RIAA would LOVE to deny me of that right.