62% of fans paid nothing for Radiohead’s web album

As record labels are slowly lured into releasing music without any digital rights management protection, Radiohead has drawn quite a lot of attention with the release of its seventh album, In Rainbows. The album became available last month on the band’s website with no content protection and on a “pay what you want” basis, allowing users to pay anything between £0 and £99.99 ($208) for the music.

After over a month of sales, the results are in, and the Associated Press suggests they don’t look too good. According to the AP, which quotes numbers from a study by comScore, a staggering 62% of users who downloaded In Rainbows chose to pay nothing at all, while the remainder paid an average of $6. comScore’s numbers say 40% of U.S. residents paid for the album, and that their contribution was an average of $8.05. Outside the United States, only 36% paid, and their payments averaged just $4.64.

That’s an average of $2.28 for all downloads—not too encouraging compared to the price of a full CD. However, since the band didn’t go through a record label and pocketed all the money itself, it’s hard to say exactly how the “pay what you want” model actually compared to traditional CD sales.

Comments closed
    • tremelai
    • 12 years ago

    The boat has been missed by all the news rags as well as this blog.

    Fact #1: Bands that sign with a major label do not own their own music.
    Fact #2: Bands that sign with a major label do not see a penny from CD sales.

    A band like Radiohead is popular enough, for this very common practice among working rock groups, to make a media splash. “OMG, they are giving their music away.”
    The way the band see’s it, they are ahead by a wide margin vs signing over their work to a label.

    Reason #1: They own the rights to the music they wrote.
    Reason # 2: (and the most important) Label executives will tell bands that CD sales are merely marketing for them to drive up concert ticket sales. The labels are correct on this point as the band see’s a good margin of the ticket sales.
    Reason # 3: most highly successful bands, such as Radiohead, are not successful enough to be in a position to re-negotiate their original contracts. Only mega-successful bands can negotiate a percentage of their CD sales and only the legendary bands can negotiate back the rights to their music.

    Bands are quickly discovering that the more MP3’s of their’s
    that float around the internet, the better the ticket sales become. This way, Radiohead gets to see some sales, I call them donations, for the distribution of their music. That’s revenue that they would have not seen anyway if they signed it over to EMI Records.

    • Tarx
    • 12 years ago

    RadioHead? Vaguely heard of them.
    As $0 was an option to check it out, I went ahead and downloaded the album for $0
    Depending on how I like it over the next few days, I’ll either delete it, return to pay $1 for any song I plan to keep or if it is really good, pick up the album.
    I haven’t bought/obtained almost any music in the last few years (had tons of older stuff to keep me going) so just getting the chance to “demo” it is great for me plus for them this has the potential of converting into a sale that wouldn’t have happened otherwise.

    • muntjac
    • 12 years ago

    TR, you missed the point.

    62% of “fans” paid nothing?

    you are including everyone who downloaded the album as a fan. I think when a band offers an album as a free download plenty of people who are not “fans” will download it.

    If anything, this story proves that good music will make money without a major publisher.

      • muntjac
      • 12 years ago

      same story on slashdot (http://yro.slashdot.org/article.pl?sid=07/11/06/2035244)

      that story obviously takes a completely different slant.

      The comments there seem to indicate that radiohead is actually doing well. In the online sales they’re getting 100% of the money.. In normal CD sales when you have a contract with a recording company you get only a small portion!

      I think this discussion needs a lot more nuance before it really begins to properly address the issue.

      • UberGerbil
      • 12 years ago

      Picking nits with headlines also misses the point. Nowhere in the body of the story are they called “fans” — you’ll find the rather neutral term “users” instead. Among those in the news media, readers who take exception to a headline while showing no evidence of actually having read the story get a term applied to /[

        • Heiwashin
        • 12 years ago

        hmmm, sadly i doubt this includes any kindof piracy numbers. i’d be interested to see what effect this had on people pirating compared to obtaining through the proper means.

        • Roscoe
        • 12 years ago

        Sadly you missed the word ‘fans’ in the headline… you know, the big bold text at the top of the story? So you’re counter-nitpicking has been shot down in big bold flames 😉

          • clone
          • 12 years ago

          *[

          • UberGerbil
          • 12 years ago

          Uh, no, I didn’t. Since you clearly read my comment, I’m curious why you’re incapable of understanding it.

          Like I said, people who take issue with the wording of a /[

        • eitje
        • 12 years ago

        headlines are what sell.

          • UberGerbil
          • 12 years ago

          To the perpetually clueless, sadly yes. The rest of us are willing to read a little further.

    • UberGerbil
    • 12 years ago

    Theory: two thirds of the people who acquire music /[

    • MadManOriginal
    • 12 years ago

    I like Radiohead’s music quite a bit. I tried within 24-48 hours to download it and the site was terribly slow. Haven’t bothered trying again since. However despite being a big fan I would likely have chosen not to pay anything at this time for what I would consider a low quality preview of the CD and then just bought the CD later. I have issues with buying compressed music :-/

    • Voldenuit
    • 12 years ago

    I think there were several hurdles to In Rainbows being successful as a pay download:

    1. Server capacity was not high enough at launch
    2. No preview capacity – seriously, how many people buy an album without being able to listen to it first?
    3. Quality – 160 kbps mp3 FTL. What is this, net radio?
    4. Incomplete – it’s missing almost half the tracks on the physical boxset
    5. Lack of full disclosure – they don’t advertise the visa processing fee, so even if you’re paying them and want a nice round number on your CC statement, you end up with an extra 75p* surcharge.

    I paid the band £5 for the album, but only after, ah, “sampling” the wares first.

    Considering every track was a live recording, I’d say they’d already made their money off the performance before even releasing the album.

    * Or was that 45p? I can’t remember.

    • BoBzeBuilder
    • 12 years ago

    So who are the 38% idiots who paid for it? :p

    • Shining Arcanine
    • 12 years ago

    Did anyone else read the title as “62% of fans paid nothing for Radioshack’s web album?”

    • Shining Arcanine
    • 12 years ago

    Cyril Kowaliski, the average is actually $2 and not $2.28 upon adjustment for significant figures. If the average of those who paid was $6.00 and 38.0% of those who downloaded the music paid for it, then the average would be $2.28. The numbers as stated simply do not have the precision necessary for three significant figures.

    • blitzy
    • 12 years ago

    dunno if its just me but i would probably download it first then decide how much to pay…..

      • shank15217
      • 12 years ago

      you could do just that. Pay nothing and then if you like it pay some more.

    • My Johnson
    • 12 years ago

    This may be nothing compared to how much they may get touring. Look how much the baby boomer bands make touring. They never made that much off albums.

      • Mithent
      • 12 years ago

      There’s a school of thought that the recording industry is dead, but the concert industry is where it’s at. After all, Madonna has now signed purely with a touring company rather than a traditional record company.

        • UberGerbil
        • 12 years ago

        Touring and merchandise and licensing, yeah. This business model was pioneered by the Grateful Dead, in the pre-digital era: they would encourage their fans to tape and trade their shows (there was even a special “taping area”). Instead of primarily record sales, they made their money from ticket sales and t-shirts, etc.

        Looked at this way, the show is the product and the recordings are just advertising. The only way your band makes any money from the songs directly is by licensing them for use in TV commercials, etc, and from your devoted fans who want to support you (and are willing to do so because they know the money goes to you directly, and not your record company). The trouble is getting the whole thing rolling — you need money to record the songs you give away, but nobody pays to come to your shows until they’ve heard your songs. There’s a role for a new kind of “label” that acts purely as a venture capitalist, doing the old-fashioned A&R work to find promising bands and invest in them to get things started, and to work contacts to get them heard by the taste-makers. But this wouldn’t work for existing record labels, bloated as they are with unnecessary personnel and an ill-suited cost structure. Consequently they’re fighting tooth and nail to prevent that version of the future from ever arriving.

    • PRIME1
    • 12 years ago

    I wonder how many of those were Radiohead fans and how many were just free stuff fans.

    • BigMadDrongo
    • 12 years ago

    I really wish Radiohead would release some statistics. And release the right statistics (number of downloads, number of /[

    • K9-Cop
    • 12 years ago

    As soon as Radiohead came up with this idea, I knew what all the headlines were going to be a few months down the round: “Large percentage of Radiohead fans pay nothing!”

    The problem is, you are posing the wrong question! The question is not, “how many people paid nothing?” Rather, the question is, “how much money did Radiohead make on this album compared to traditional distribution models?”

    Asking the right question is important because:

    1) I guarantee you a high percentage of that 62% would never have bought a Radiohead CD. They would have done without it, or would have pirated it.

    2) The fact that a ‘special-release’ album is forthcoming skews all the numbers. If they never announced the physical CD the on-line sales may have been better.

    3) The bottom-line is what’s important, and you can spend an awful lot of money shipping CD’s.

    • HalcYoN[nV]
    • 12 years ago

    One thing I have seen on music message boards is that several people downloaded the music several times to their multiple PCs, not bothering themselves with burning and ripping, etc. The first download was paid, the others were $0.

    Moreover, I have read many other posts that suggest people are $0 downloading, but intend to buy the album on vinyl/CD/DVD-A when made available. Again, this is in relation to the fans.

    The “all the fuss about” people, what a great ad campaign. Maybe Radiohead won a few fans that will buy previous songs off itunes and in record stores, or even better attend a concert. Touring is where the money is…

    I love the new album. No envelope pushed, not revolutionary, but certainly an album for fans of the band. Thank you, Radiohead. You earned my $8.34 after conversion.

    • Bookrat
    • 12 years ago

    “The results of the study were drawn from data gathered from a few hundred people who are part of comScore’s database of 2 million computer users worldwide. The firm, which has permission to monitor the computer users’ online behavior, did not provide a margin of error for the study’s results.”

    … So, wait a minute, they looked at a couple of hundred people, and then generalized those patterns to determine that 1.2 *million* people downloaded the album? I understand the concept of statistics, sample size, and generalizing from a few to the many … but the error bars on that particular analysis have to be *huge*. No wonder they didn’t release the margin of error. “1.2 million” sounds a lot more like you know what you’re talking about than (f’rinstance) “Somewhere between 800 000 and 1.6 million.”

      • droopy1592
      • 12 years ago

      I’m in total agreement with you

      • totoro
      • 12 years ago

      Statistical analyses like this one are usually paid for by /[

    • wierdo
    • 12 years ago

    A few things are not clear… for example how many people did actually consume their product (and how that compares to the normal sales count for such a period)? is it a relatively large number or is it a small one?

    The other thing is how much indeed did this provide in terms of profits, the distribution costs are pretty low since it’s all digital, there’s no middle man, and there’s hardly much in terms of marketing costs, the band’s big name and the free nature of the offer was marketing enough. My guess is they made good money, all things considered.

    Also, 36% imho might be a good number, I don’t know what’s so disappointing about it: If people start measuring success of a song by how many people paid for it vs how many didn’t – instead of considering how many listened to the music – then they can perform the same exercise on CD/MP3 sales and think they’re are pretty bad too, considering how many people download them off P2P sites. That skews the numbers and, I’d argue, measures something else altogether imho. At best it’s a glass half empty approach to calculating success.

    Another point to consider is perhaps this is what the market is willing to pay for. Supply and demand. Is a couple million dollars bad, or is this one of those cases of people still stuck in the past, market dynamics-wise? Time to get with the times.

    Also. lastly, how did they factor in those people who dl them for free and perhaps came back later to show support for the artists’ work?

    Too many variables, yet some are quick to draw negative conclusions and still live in the past.

    • albundy
    • 12 years ago

    I’d question AP’s sources, as propaganda is involved more than the sales of the album. The numbers that they provide I’d take with a grain of salt.

    • muffin_mutt
    • 12 years ago

    I wonder how many people paid nothing to try the album then went back and paid for it. I did that for Saul Williams’ release.

    Edit – Shinare beat me to the punch.

    • impar
    • 12 years ago

    Greetings!

    An average of $2.28 for each download?

    Compared to $3 to $5* from a traditional album launch?

    And they still have to pay the bills?

    *-
    “He figures that in every year a Radiohead album was released, it was EMI’s top-selling record. The band likely negotiated a larger royalty rate than most performers earn.
    He guessed that when royalties were combined with money earned from publishing, Radiohead saw between $3 and $5 for every album sale”.
    From here:
    §[< http://www.news.com/8301-10784_3-9811013-7.html<]§

    • JJCDAD
    • 12 years ago

    I would guess that a large majority of those who paid nothing simply downloaded it to see what all the fuss was about. I would also say that ~90% of real “fans” of the band did pay something.

    Edit: torax beat me to it.

    • torax
    • 12 years ago

    I’m guessing that the majority of the 62% non-payers were not regular Radiohead fans. Rather, I’d bet they were people downloading the album because of all the publicity surrounding this first of its kind offering. If more artists offer their music in the way Radiohead did, the novelty of being able to legally and freely download music will fade and the percentage of paying downloaders will increase.

      • d2brothe
      • 12 years ago

      Heh…I wonder if the RIAA downloaded it?

    • muyuubyou
    • 12 years ago

    It’s not only the money they get, but also the money the MAFIAA is prevented from getting.

    • Shinare
    • 12 years ago

    I wonder how many of those were people who paid nothing, downloaded it, liked it, and then came back and paid $10 for it.

    • Sargent Duck
    • 12 years ago

    What would be interesting is too look at how many theoretical cd’s they would have sold, (which one could assume that anyone who paid for their album would have bought a cd), and then how much money they would have actually received (in pocket) from those cd sales. Then compare.

    Although 62% chose not to pay, I’m gonna guess that same amount of people would have pirated the cd anyways. All-in-all, I don’t think RadioHead is out any more than had they sold cd’s.

      • eitje
      • 12 years ago

      i don’t think you can validly assume that. paying $2 for an album does not mean one would pay $12 for an album.

      maybe if you did the math off of all those people that paid half-price or more (~$6?).

    • lex-ington
    • 12 years ago

    If I “assume” that all 1.2 million people downloaded the song . . an average of $2.28 = $2.7 million – SO FAR. That’s a hell of a lot more I make in a year.

      • odizzido
      • 12 years ago

      yeah really. I dont think anyone who makes 2.7million dollars in such a short period can complain.

    • king_kilr
    • 12 years ago

    I assume not going through a label means they also foot all the costs themselves.

      • StashTheVampede
      • 12 years ago

      That’s a large part of the money. The artists have to pay back:
      – Recording studio costs
      – Advertising
      – Duplication costs

      Once the money from those (and other) expenses, then the artists make money off album sales. Trouble is: those costs are quite high. Very few artists can push enough album to cover those costs.

      Touring is what makes artists money, not album sales.

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