A Case Study On the FREE Music Model: “Radiohead”

I don’t feel guilty downloading music for free because it is what I believe in: I give all of my own music away for free! I’ve written, recorded, and produced hundreds of songs over the last decade, and published two EPs on iTunes, but all of my material is free to download from my website. It’s not that I don’t value my music, just that I want it to be shared as much as possible because when a song of mine lands in someone’s music library, it will be there for a long time, and there is no better promotion than that. This concept that giving away your music for free will increase your sales in the long run is not as crazy as it sounds and has actually succeeded for many bands since the dawn of this new era. Most notably, the band Radiohead, who never had an album break into the top 20 in the U.S., but after their album Kid A (2000) was leaked on Napster three months in advance and downloaded for free by millions of people, it had received so much attention, and fans had begun to appreciate it so much, that when it was officially released, the album climbed to the number one spot on the “Billboard 200” sales chart in its debut week. According to Richard Menta of MP3 Newswire, “the effect of Napster in this instance was isolated from other elements that could be credited for driving sales, and the album’s unexpected success suggested that Napster was a good promotional tool for music.”[1] Radiohead is one of the pioneers of the new model for the music industry, and after their contract ended with EMI, the band decided not to renew the relationship, feeling no need for the label anymore because they already had their own recording studio, a dedicated fan base, and a new web server.

In October 2007, Radiohead proved to the world again that it is possible to make more money selling your record if you give it away for free at first. They did this by making a sudden announcement 10 days before the release of In Rainbows, and then releasing the album as a download for free on their website with an option to “pay what you want.” An amazing 1.2 million fans downloaded the album in the first month, and roughly 40% of the fans chose to pay an average of $6, which netted the band an astonishing $3 million. For the first time, Radiohead owned the master to their album, and they sold it direct to the consumer, so they did not lose any percentage of their sales revenues, and they were able to license it to other CD stores and make money the old fashioned way after the first month of “pay what you want” was over. This ingenious strategy worked for the band again with their 2011 release of The King of Limbs. Thom Yorke, the band’s singer, admits that this model probably will not work for everyone. It is an ideal strategy that is based on the belief that people should be able to value the music they listen to themselves, instead of being forced to pay $20 for a CD only to realize they only liked the one song that they heard before buying it. In a conversation about the true value of music with the innovative producer and singer of the Talking Heads, David Byrne, Yorke says, “It’s not about who’s ripping off whom, and it’s not about legal injunctions, and it’s not about DRM (Digital Rights Management) and all that sort of stuff. It’s about whether the music affects you or not.”[2]

In a day when major recording labels are trying to squeeze as much money as they can from their artists to make up for dismal revenues, the advantage of a musician being able to sell his music directly to his consumers has become more and more attractive for the independent artist. It is amazing to compare Radiohead’s In Rainbows album sales, which reached $3 million after giving it away for free and letting the fans “pay what you want,” to Paul McCartney, who was the top ranked rock performer in 2002, who’s album sales only earned $2.2 million that year, significantly less than the alternative-independent band Radiohead. However, McCartney did earn $64.9 million from live concerts too. It is becoming more and more clear that major labels role providing distribution deals and promotions are coming to an end, while the labels still maintain the power to help artists generate a lot of revenues from ticket sales to concerts. For artists who do not want to go on expensive tours, there is not much of an incentive to sell the rights to your music to any record label when you have the power to sell directly to the consumers and connect to your fans through the Internet. The power of the independent artist is at an all-time high right now, and it only looks like it will get better from here on out. Especially because music promotion is becoming much more targeted through social networking sites, and the amount of fans that can be reached on a limited budget or free is seemingly limitless if you apply the right techniques.