Radiohead release their seventh studio album today and it's only available online and you set your own price. Will you buy the album? Do you buy the idea?
I think I will buy the album… probably drop $10.00 on it and support it as a cause that I believe in. Actually I wrote an article about it last week for a blog that's not quite up and running yet. I figured I might as well post it here. It's for a philosophy-in-business blog called Coaction Theory. I'll likely be writing more about it in the future to share with you.
Radiohead Creates Album sans Record Label – Buy it For… whatever you decide to pay?
Radiohead is creating buzz these days whether you like their music or not. The band has left the labels behind to create their latest album In Rainbows, they’re not selling it through a major record label, there will not be any tracks available on itunes. Instead you can only go here and buy it directly from them, and here’s the catch, you can pay whatever you want for it.
Okay technically you can pay as little as a dollar for the album and there’s a 45 cent processing fee, but that’s the essence of what they’re offering. And honestly it isn’t as bad an idea as it sounds. The audacity of the move creates buzz, and buzz generates traffic. If the album is at all worthy musically that viral traffic will generate into massive sales and they’ll spark a revolution. This is the major record label’s worst nightmare, a band with credibility is proving that it doesn’t need them, and doing it in a very public way. If In Rainbows succeeds then the industry is going to flip on it’s head and where it finally lands remains to be seen.
While I hadn’t expected such an audacious event to spur the revolution against the record label, it was inevitable and frankly I’m surprised it took so long. The record label might shoulder the brunt of the cash required to promote a label and distribute it, but bands don’t get their worth. Some numbers even say that a band will make more money off a reasonably successful album by playing in the park on Saturday nights, selling self-printed tee shirts and CD’s and working a minimum wage job, than it will touring for a year promoting an album. Added on is the real risk that these bands could lose the ownership of their works, and you’ve got a seriously one-sided market in desperate need of shakeup.
The internet is enabling this; the biggest enemy of the majors is not illegal downloading, it’s self-production! Anyone can produce a record, but it takes a label to get it to the masses right?!? Not anymore, youtube has proven that the small creative producer can get a fanbase through a free distribution network, why not the bigger boys? Social networks are allowing nearly free promotion of a product. Those that keep abreast of internet trends know this is called Viral marketing, where the buzz of a product amplifies its self through it’s fans and advocates.
In this case viral marketing along with an efficient, affordable means to transfer their product and communicate with fans is working in Radiohead’s favor. They are using social networks and affordable information transfer to gouge out the biggest profit drain between their work and the purchasing consumer. But really, how much can they be making if they’re only selling their album for as little as a dollar? The answer is about as much as they would by selling it through a label over store counters. The fact is for every dollar you spend on music 7 to 14 cents goes to the artist. The rest goes to the recording label and the distributor. Radiohead is now all three, so if their CD would be $15.00 on the store shelves, and 90% of us greedy consumers only pay the minimum $1.50, well they’ve paid their processing fee and are getting a reasonable approximation of the usual payout. BUT if the band’s fans are like me and decide not to be cheap, they of course will support them with a few more bucks. I mean seriously, who’s going to pull out their credit card for only a dollar?
What makes me smile the most about all this is that it spells the woes of the recording labels more ominously then any other aspect of the internet. While the RIAA sues college students and other fans for file sharing, a band moves in from the unguarded front. Sun Tsu’s art of war says:
Exploit your enemy’s weaknesses
Keep him engaged and expending energy.
Disrupt his communications and alliances.
And that is exactly what is happening.
This development proves Coaction Theory; that with the latency and cost of information getting so low, a creator is able to find success using social networks and developing an alternative advertising and distribution model. They’re using their fans and their blogs as advertisers and self as distributing rather than working on conventional terms. It’s also further proof that as a means of communication the digitization of music will lower its cost to the consumer, as it has with all other means of communication, and bands will be able to gather profits as free agents rather than become the property of large media corporations.