Wrote about RadioHead recently when they offered their “In Rainbows" album for any price (including free) you wanted to contribute, for online download. According to Comscore, roughly 3 out of 5 people who came to the RadioHead site and downloaded "In Rainbows" did so for free. Those who paid for the "In Rainbows" album paid, on average, $8.05 in the US and $4.64 outside the US.
"…Approximately 2 out of 5 Downloaders Willing to Pay
During the first 29 days of October, 1.2 million people worldwide visited the “In Rainbows” site, with a significant percentage of visitors ultimately downloading the album. The study showed that 38 percent of global downloaders of the album willingly paid to do so, with the remaining 62 percent choosing to pay nothing. The percent downloading for free in the U.S. (60 percent) is only marginally lower than in the rest of the world (64 percent).
Radiohead “In Rainbows” Online Album Downloads
October 1-29, 2007
Total Worldwide – Home/Work Locations
Source: comScore, Inc.
Worldwide
U.S.
Non-U.S.
Percent Who Paid for Download
38%
40%
36%
Percent Who Downloaded for Free
62%
60%
64%
Total Downloaders
100%
100%
100%
“I am surprised by the number of freeloaders,” said Fred Wilson, managing partner of Union Square Ventures and well-known music aficionado. “The stories to date about the In Rainbows ‘pick your price’ download offer have been much more optimistic. I paid $5 U.S. and had no reluctance whatsoever to take out my card and pay. It’s a fantastic record, the best thing they've done in years. But, this shows pretty conclusively that the majority of music consumers feel that digital recorded music should be free and is not worth paying for. That's a large group that can't be ignored and its time to come up with new business models to serve the freeloader market.”
What I found interesting - in the future album sales will depend on a fan base - and most musicians are not developed by the record label to have much of real fan base - therefore, if this new distribution method for music becomes mainstream someday soon, many artists would not do so well:
"…“While the band, its fans and artists alike are celebrating what looks like a success for Radiohead's bold move in releasing their new album using the ‘pay what you'd like’ model, I think everybody has overlooked one very important aspect of this, and it doesn't bode well for the future of the music industry,” says Michael Laskow, CEO of TAXI, the world's leading independent A&R (Artist and Repertoire) company. “Radiohead has been bankrolled by their former label for the last 15 years. They've built a fan base in the millions with their label, and now they're able to cash in on that fan base with none of the income or profit going to the label this time around. That's great for the band and for fans who paid less than they would under the old school model. But at some point in the not too distant future, the music industry will run out of artists who have had major label support in helping them build a huge fan base. The question is: how will new artists be able to use this model in the future if they haven't built a fan base in the millions in the years leading up to the release of their album under the pay what you'd like model?”