Radiohead, The Eagles and the Future of Music Distribution

The music group Radiohead broke from their record label and placed their latest album, In Rainbows, for sale online without a suggested retail price. The choice on how much to pay was left up to the consumer. There has been lots of talk about the potential success of this strategy, and questions about how many consumers will pay and what they will pay. ComScore, a company that measures the digital world through consumer panels, has released data that shows roughly 2 out of 5 downloaders are willing to pay. United States visitors paid an average of $8.05 per download while consumers from all other countries paid $4.64.

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You may remember that author Stephen King tried to sell downloads to one of his books online. He asked readers to pay for it a chapter at a time, and if no one bought, then he wouldn’t write or post the next chapter. This approach failed, and Mr. King quickly went back to the regular distribution method. For sure this was many years ago and he was ahead of the curve related to online sales, but holding art hostage will not succeed and is disrespectful to creativity and the people who enjoy it. Even with such a large fan and readership base, Mr. King could not, or would, not go it on his own. In Radiohead’s case they had a much better chance, because they have spent years working within the music system, being established through releases, radio play and concerts. Their fan base is large enough and very loyal. However, if you are a new act, struggling to get your music heard, this online route will be very difficult.

Just as Radiohead has gone outside the system, so have The Eagles. Their latest album, Long Road Out of Eden was released exclusively at Wal-Mart. Details of the deal are not well known, but it is assumed that the band did better with the retailer than the record labels. Sales have been stunning with over 710,000 copies sold in the first week. Again an established group who is using their power to call the shots.

Apple transformed the music business with the release of the iPod, and there are numerous online music stores and services for consumers to choose from. Thanks to iTunes, most consumes think that a song is worth about $0.99. Try to go to a popular concert these days and you will be hard pressed to land a good seat for less than several hundred dollars. True, one is a single song and the other is a live experience, but it’s all music.

I am sure there will be many more music experiments over the next year or so, and it will be fun to watch and participate. It’s not the end of music, but it might be the end of the music business as we have known it. In the meantime, keep listening, and keep buying.

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