Thursday, 27 November 2014

How giving away music for free can be profitable: A Radiohead case study

This research article completely slipped past me, but then again, there's so much research out there that it is hard to keep on top of it all.

Some seven years on from Radiohead's pay-what-you-want model of distribution 7th album 'In Rainbows' for free online, academics are still investigating the practicalities of the so-called 'honesty-box' system for other artists.

In this recent article (which is free to download), authors assess that Radiohead earned greater revenues from giving away the album for free, exploring sales data on previous releases and making comparisons with other artists over a long period of time. Notably, the research also considers Nine Inch Nails and specifically 'The Slip', which is reassuring as for the longest time it appeared it was only me who considered Reznor's work in an academic context. I will take credit for getting the ball rolling, thank you very much.

Of interest, the research finds that Nine Inch Nails did not benefit in the same way as Radiohead when giving away The Slip in 2008, but it is important to note that this album is still available for free online, a full six years after it was released: Radiohead's 'In Rainbows' was only online for free for 3 months. The key difference here is that 'The Slip' was fully intended as a gift to fans; it was after all released but months after the album 'Ghosts I'-IV' (compare that to the six year gap between 'The Fragile' and 'With Teeth'). As noted in the paper, Radiohead received far more publicity as well - this is important.

To tie in with my recent posts, the core difference here is your existing audience. What works for one band does not necessarily work for another. Consider U2's recent move with Apple which I discussed recently; the authors of the paper in fact draw critical comparisons here in a recent article on the excellent resource The Conversation where they discuss the outcomes of the paper in the context of U2 and their deal with Apple, should you wish to ponder the bigger picture.

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