Study: Free beats fee for Radiohead's 'In Rainbows'

Research firm ComScore says that 62 percent of those who downloaded album paid nothing. Even with only a minority paying for the album, a former record industry executive estimates that Radiohead may not have done too badly.

LAST UPDATE: 3:54 p.m. PT--Those who predicted that Radiohead would see mass financial support after allowing fans to pay whatever they wanted for the band's latest album appear to have been a tad optimistic, according to a study released Monday.

Of those who downloaded Radiohead's digital album, In Rainbows last month, about 62 percent walked away with the music without paying a cent, reported ComScore, an Internet research company.

About 17 percent plunked down between a penny and $4, far below the $12 and $15 retail price of a CD. The next largest group (12 percent) was willing to pay between $8 and $12--the cost of most albums at Apple's iTunes is $9.99. They were followed by the 6 percent who paid between $4.01 and $8 and 4 percent coughed up between $12 and $20.

Last month, Radiohead, one of the world's most recognized music acts, thrilled fans across the globe by giving them the option of paying whatever they wanted to obtain a digital copy of In Rainbows.

Music blogs lit up with excitement. Pundits crowed that the file-sharing crowd would prove that they weren't really just free loaders by happily supporting artists who had walked away from the labels . That appears not to have happened by and large.

But an important question still unanswered is whether the band is making any money. While Radiohead is believed to have had to pay the costs that go with distributing music online, the group also didn't have to share revenue with a record company.

Chris Castle, a long-time music attorney and record executive, cautions that it's way too early to try and assess whether Radiohead's experiment has failed or not.

"I think if (the music industry) had done this kind of thing a long time ago we'd all be better off."
--Attorney Chris Castle

Castle, who has represented singer Sheryl Crow and worked for A&M Records, said that the money-generating lifespan of an album can last as long as two years. It starts when an act releases a record and is extended when the performer goes on a concert tour.

The real question, Castle said, is whether Radiohead can equal the same kind of money it made when it was still making records for music company EMI.

Castle offered an educated guess about what the British band was earning at the label. He figures that in every year a Radiohead album was released, it was EMI's top-selling record. The band likely negotiated a larger royalty rate than most performers earn.

He guessed that when royalties were combined with money earned from publishing, Radiohead saw between $3 and $5 for every album sale.

Castle also estimates that the band typically sold between 3 and 4 million units worldwide. That would mean Radiohead hauled in between $9 million and $20 million per album. An EMI spokeswoman declined to comment for this story.

If Castle is right about the band's cut, then the money it received from letting fans pay may not have been a huge drop. According to ComScore, the average amount spent for all downloads came to $2.26.

Castle also said that not only is it too soon to try and measure Radiohead's success, but that they are not a good band to use as a test case. The group is a phenomenon with an enormous following and not all acts will see the same success by going independent.

"I may not agree with what they are doing but I think people should respect what the artist wants," Castle said. "If they want to give their music away, let them."

Radiohead's experiment with a different business model may benefit the entire music industry if record executives can learn from it, according to Castle.

"I think if we had done this kind of thing a long time ago," Castle said, "we'd all be better off."

Already, Radiohead's promotion has given rise to similar offerings from other bands. Last week, rapper Saul Williams released the album The Inevitable Rise and Liberation of NiggyTardust. Williams gave fans the option of obtaining the music for free or for a $5 donation.

An important difference between the offers of Williams and Radiohead is that those who paid for Williams' music received songs at higher bit rates and thus better quality.

Trent Reznor, the front man for Nine Inch Nails, produced NiggyTardust, and he offered kudos to Radiohead for experimenting with a new business model.

"I think there were some serious flaws with how they executed," Reznor said in an interview with CNET News.com last week, "but it was a good idea."

Coincidentally, on the same day that ComScore released Radiohead numbers, EMI announced that it was releasing the group's first six studio albums and one live album in several formats including uncompressed WAV files.

The WAV files come on a USB drive and goes for $167.

 

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