Wednesday, December 5, 2007

3 in 5 'didn't pay a cent' for Radiohead album

Radiohead's grand experiment in 'honesty box' music sales may have gone a little flat after a report found that three in five people downloading the band's latest album did not pay a cent for it.
Of the 1.2 million people who have downloaded In Rainbows since it was released last month, 62 per cent did not pay anything, and 12 per cent accounted for more than 52 per cent of the revenue from sales.
The average price paid was $6 (£2.90) globally, but this figure was propped up by the 12 per cent who were willing to pay between $8 to $12 (£3.90 to £5.80) - the approximate cost of downloading an album from a retail service like iTunes, the report, by comScore, concluded.
American music-lovers were the most generous, paying on average $8.05 (£3.89). Outside the US, the average amount parted with was $4.64 (£2.24).
ComScore tracks - to the last detail - the online behaviour of more than two million people worldwide, so its figures are not based on a survey. Shortly after the album's release nearly a month ago, online polls suggested that the average purchase was £4.
At the time, the band's decision was viewed by some as a future direction for the industry, which has struggled to combat declining sales in the face of widespread illegal downloading.
Other prominent musicians, including Trent Reznor from the band Nine Inch Nails, praised Radiohead for experimenting with a model, and Guy Hands, head of the private equity firm Terra Firma which recently bought EMI called the move "a wake-up call which we should all welcome and respond to."
But labels and other industry representatives expressed disappointment in the wake of yesterday's report, saying that while a band with an established fan base was able to take such risks, it was not an option for new bands, who still benefit from the support of labels.
Tim Dellow, co-founder of Transgressive, a smaller, London-based label, said: "It's depressing. Radiohead might have made a killing off this, but it was largely because of their fanbase built up over time with the help of a major label and its distribution and marketing channels."
"Most new acts don't have fans who would shell out £40 for the box set, and any profits (from this type of venture) would be impractical for making a living out of music."
Mike Driver, editor of DrownedinSound, a music news site, said that younger bands would find the honesty box method "unlikely to raise their profile any more than making a couple of tracks available on MySpace."
Fred Wilson, managing partner of Union Square Ventures, which invests in small, internet start-ups, said: "This shows pretty conclusively that the majority of music consumers feel that digital recorded music should be free and is not worth paying for."
A source at one of the major labels said that allowing fans to pay what they wanted for music would never work, because people would always steal. "Radiohead tried to spin this is offering a service for fans, but it was nothing more than a marketing ploy to make themselves relevant again and prepare for their next release. The reality is music has real value, and there has to be a way of capitalising on that."
A spokesman for Radiohead was not available for comment.

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