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October 11, 2007

Radiohead's New Business Model

The band Radiohead is making its new album, "In Rainbows," available online for the price of...whatever the buyer wants to pay. Radiohead, who road-tested the songs from "In Rainbows" in 2006, tolerates live bootlegs, so many Radiohead fans have been listening to these songs for over a year now. However, the entire edited album is just becoming available. Since Radiohead is no selling its album under a record label, the band decided to try something new.

Given that most listeners no longer pay for music anyways (they download it online regardless of copyright infringements), Radiohead's new business model could be rvolutionary. Though some buyers will not pay a fair price for the album, avid fans may spend greater amounts simply to establish themselves as diehard Radiohead fans. Furthermore, many people realize that in order for Radiohead to continue making albums, they must have some income. In the end, Radiohead will be worth what people are willing to give them.

Though this model may end up working for Radiohead, it is largely because of the band's previous success in the traditional music market. It would be very difficult for new bands, who presumably do not yet have avid fans, to sell CDs for whatever price the buyer names. Therefore, this "pay what you like" system does not solve all of the music industry's woes. But at least some individuals in the music industry realize that they must change with the digital age in order to survive.

By the way, if you are interested in Radiohead's new album, you can buy it at http://inrainbow.com.

Posted by leslieph at October 11, 2007 06:44 PM


For an update on Radiohead's success visit http://www.nytimes.com/2007/12/09/arts/music/09pare.html?_r=1&ref=arts&oref=slogin. According to Jon Pareles, "...For the beleaguered recording business Radiohead has put in motion the most audacious experiment in years... Radiohead’s pay-what-you-choose gambit didn’t just set off economic debates. It should also establish 2007 as two kinds of tipping point for recorded music. One is as the year of the superstar free agent...The second tipping point is the decisive migration of music to the Internet..."

Posted by: leslieph at December 9, 2007 10:10 AM

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