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Economic News, Data and Analysis

Sun-y Day

Three Levels of Assets; Radiohead’s Happy Tune – November 8, 2007 – The New York Sun

RADIOHEAD A WINNER
The BBC reported that the strategy employed by the band Radiohead to release its album online and let fans decide how much to pay was a failure, with 62% opting to pay nothing. But John Irons at argmax.com writes that it was a huge success. Of those who did pay for the album, the average price was $6. “So if my math is right, this means that the average across all downloaders is $2.28. Now, I don’t know what the industry standard is for the per CD royalties that the band collects (vs. what the record company keeps), but I wouldn’t be surprised if this is not too far off.” Plus, Mr. Irons notes, Radiohead’s strategy “probably introduced thousands of people to the band and will help expand their fan base for future releases and concerts.”

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