An excellent case study in alternative funding models for cultural works. Radiohead aren’t making their latest album copyleft (maybe next time?) but it is available as DRM free downloads a week after it was recorded and mixed.
The site is currently down which is hopefully a sign of high demand. I paid four pounds (8 dollars) for the album plus credit card fees. It’s currently on my Ogg player.
Radiohead have released the album as downloads now and are taking orders for a deluxe package of the album in various formats in a couple of months. This is a smart strategy. They are getting what money they can from downloaders before the finished album can be leaked. And they are targeting collectors with a package that costs four times what a simple CD release does. This simultaneously captures value that would be lost to filesharers and unrealised with collectors if the tracks were released on a CD through supermarkets some time next year. This is all the value that can currently be captured for an album without alienating fans and thereby paradoxically reducing value by trying to maximize it.
One interesting effect I’ve seen is that the existence of the cheap downloads has driven some people towards the more expensive deluxe package. I’m sure economists and psychologists will have a lot to say about this.
Some commentators have complained that this strategy will create a burst of revenue but destroy long-term sales. I’d like to introduce these commentators to Napster, and more importantly to the stagnation of popular culture that has resulted from maximizing distribution of old recordings. Popular culture is meant to be disposable. If it creates something lasting, like the recordings of Elvis Presley, then these will keep their value however they are released. Elvis tracks in the public domain are now being profitably released in the UK.
Oasis, Jamiroquai, Ian Brown, The Charlatans and other UK acts are hot on the heels of Radiohead with plans to release music online. America’s Nine Inch Nails are, like Radiohead, now free of their recording contract and seeking to release music online and build a direct relationship with their fans.
Build a multi-pronged strategy and capture value in as many places as possible. Radiohead have put some good ideas into effect here:
- Release early. Don’t wait for leaks and “pirates”.
- Work with downloaders. Get any value you can from them.
- Work with collectors. Release packages they will pay many times the odds for.
- Build buzz and translate that into live performance revenue.
- And take all this and see if any recording companies are smart enough to work with it.