Having Their Cake and Eating It, Too

It may not be a business model that can work for everybody, but those who can pull it off may be looking at the future. Radiohead released physical copies of its latest album In Rainbows, this week, and as is their pattern, they immediately saw it leap to number one. Most of you probably know why that was seen as a surprise to some, but for those who don't, here's a quick explanation. Back in October, Radiohead, between record contracts, released their seventh album only on the Internet. Available to anyone and everyone who had an Internet connection, the band asked merely that downloaders pay what they feel they should (you can click through if you want to, but the offer's no longer available). None of the statistics for that experiment are available--Radiohead is keeping the numbers to themselves. Did most people pay something, of did a majority take the files for free? For those who did pay, how much did they pay? One study claimed that only 38 percent of downloaders paid anything. Figuring all those who didn't pay into the average, Radiohead brought in $2.26 for each download. Speculation is that their royalty rate through a major record company would be more than that, $3.00 or more. Radiohead wasted no time in denying those figures, although they refused to release their actual numbers.

Regardless of how many people downloaded the album, for free or otherwise, 122,000 buyers were willing to pay regular CD prices to buy a regular CD of In Rainbows. The general explanation for this is that the downloads served as kind of teasers or advertisements for the "official" prerecorded CD. Content providers worry that if they make their content available online for free that no one would bother paying any real money for it. But it turns out that many (most?) people want to have a physical artifact in addition to any digital material they might have. In the context of comics and webcomics, Todd Allen has been making that argument for ages (although he didn't make it in the column posted today, so you might want to check out his archives. Radiohead's experience will encourage a few more content providers to experiment with free Web material. It's a slow build as a business model, but with each success, it becomes more and more obviously viable.