Answer Yourself! A blog by Sukhpreet Singh

A blog on personal development, entrepreneurship & change.

9th October 2007

How much would you pay for a free music album?

In my previous post, i had discussed about how would you compete with free. Here is a perfect example of a music bandcheckoutscreen-radiohead.jpg that found a way to add more value to its listeners and let each listener (or fan) decide how much they want to pay for that “value”.

Recently, Radiohead announced that they will let anyone download their latest album – “In Rainbows” from their websiteitsuptoyou.jpg for any price the listener decides to pay. Is that cool or what? In traditional setup, musicians have never made money on record sales. Most of it went to the labels. So artists like Radiohead and Prince, who gave away his newest album (3121) for free inside of a newspaper, are at the front of new wave.

What are the benefits of this new model?

1) Its easy to distribute music and so low overhead costs.
2) Band gets to keep more and more profit.
3) Its easy for fans to download music. They will prefer to download the album from original source rather than some unreliable peer-to-peer network.
4) By giving the choice of having their music for free, bands would generate good will for themselves.
5) All in all there is no loss for a band to go for this model.

Its interesting to point out that an artist only makes about $1.25 USD per each $16.98 retail album and record companies receive approximately $10.00 from that CD. I’m sure many will opt to pay at least $1 and loyal fans would pay more for the album. It’s possible that Radiohead will make more money selling “In Rainbows” directly to consumers than they would have otherwise.

The new model that Radiohead has chosen is great for everyone except for Label Industry. By embracing this model the best band in the world is telling Label Industry “We don’t really need you and we are going on our own.”

I am not a big fan of Radiohead, but just to checkout their new album, I’ll pay about $3 for their album. I am a big fan of Bob Dylan and so if he does something similar, I would not mind paying $8-10 for an entire album.

How much would you pay for a downloadable album from your favourite band?

  • $3 to $5 (40%, 2 Votes)
  • $5 to $10 (40%, 2 Votes)
  • more than $10 (20%, 1 Votes)
  • less than equal to $1 (<=$1) (0%, 0 Votes)
  • $1 to $3 (0%, 0 Votes)

Total Voters: 5

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