Radiowar
Drums, please…… The guns are out: iconic Radiohead released their latest album for free with the hope that people would pay something for it. I would call that busker-style pricing. You park yourself on a strategic corner, open the guitar case in front of you, throw in some sad, old coins, and you sing for whatever money is tossed at you…. The Radioheads thought they were proving the industry wrong, I guess expecting that the “goodness” in fans would set a price that would make everyone happy… Apparently, the tops people paid for the album was two quid… most geezers just got it for free and strolled into the sunset.
But the record label has not sat around festering hateful thoughts with a you’ve-been-dumped attitude. EMI has new controlling owners, remember? a private equity fund. For those who cannot read between the lines, these are the guys you don’t mess with… And boy, did it show: EMI has just released a special USB stick containing all of the band’s back catalogue. You wanted digitalised music? Here you go, on a Radiohead bear-designed 40Gb sticky… at £80 quid the puppet…
Now, that’s where I sense they’ve missed the boat. Who’s got £80 quid for old albums that you either (a) you already own, (b) you can buy online for less (c) you can buy for even less on the highstreet (the ones you don’t have)?
Pricing is the mother of all evils where it comes to digital content. What’s the added value to something that is just invisible bites? And here, for back catalogue bites, not even unreleased tunes?
I don’t see the iPhone queues here…
My price suggestion: £45
Why? It’s a ballpark figure that enters the lifestyle pricetag of “stuff I don’t need but I can splash on”. This, in marketing terms, is how we price for this segment of the population: people in their late twenties (the average age of a Radiohead fan) whose average salary allows them to, let’s say, “throw away” a specific amount of money without too much suffering at the bank account level. In retail, you go for volume, specially if you are selling “old catalogue stuff”….
Entry Filed under: Consumer Rant
5 Comments Add your own
1. Lucas Gonze | November 15th, 2007 at 4:19 am
Because they had virtually no marginal costs, Radiohead didn’t necessarily lose any money on the pricing flexibility. To maximize profit they have to extract as close to the maximum that each person will pay. It doesn’t matter whether some people pay $1 and some pay $10. Even the people who pay nothing don’t necessarily lower profits. As long as these self-imposed prices are close (on average) to the maximum they will pay, Radiohead earns more with this style of pricing than they would with fixed pricing.
The name for this is “price discrimination.”
2. Inma Martinez | November 15th, 2007 at 7:49 am
Marginal costs may allow the band to still keep a certain level of profit, but my concern is the eternal devaluation of free services. If I pay £2 for the album, and then I realise everyone’s got it for free… the good will soon quickly evaporates.
Music should be affordable, not 100% free. People should pay for it because there is human effort and creativity behind it, and there must be appreciation for such exchange. The price for CDs in the UK is absolutely above what most customers can afford and it is literally forcing many people to go for the pirate download, which destroys the eco-system. Releasing the album busker-style sent the wrong message to the audience…
Nevertheless, I can envision a music industry where an album, in any format - digital , CD or blue-ray, is for free and people pay for live concerts and merchandise. I reckon this could bring the paradigm to a new level of appreciation, where live music becomes the real value and the music, acquired for private use or heard on the radio, become the marketing element for the band to bring their fans to a given venue. Madonna has been clever enough to understand this releasing her latest single for free on the MSN platform for Live Earth.
3. Randy | November 16th, 2007 at 3:36 pm
Do you loose your good will if you paid $2.00 for the album? Really? Or do you feel bad for the people who think they got away with something? I always try to drop a dollar or spare change in the subway musician’s guitar case … if they are really good. I give what I think the value is I receive. I certainly don’t get pissed at the musicians because I paid an no one else did, I get pissed at the people how recognize value and choose not to contribute - those who abuse the commons.
4. Inma Martinez | November 16th, 2007 at 11:16 pm
Precisely.
I advocate that one should pay for value received and not walk away not giving back. The band deserve our monetary recognition because, after all, it is their craft and how they make a living. Some people, driven by the wrong ethics, live with a different agenda… Getting music for free or paying £80 ($165!!!!) for it is an unsustainable polarity.
Making music, entertaining people, composing songs that become part of the fibre of life and its memorable moments should be rewarded. Likewise, setting astronomical prices on this enjoyment, which is part of our popular culture, is shameful and should be more regulated. No one sells bread at $10 the baguette… Same should go for music and film…
5. Sharon Jackson | November 13th, 2008 at 3:01 am
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