- February 12, 2008

Radiohead Redux

Many of the readers of this blog will probably remember the firestorm caused by Comscore’s release of statistics regarding Radiohead’s unique online offer to “pay what you want” to download their new album, “In Rainbows.” Comscore’s data showed that about 62% of the people who had initiated a download of the album did so without being willing to pay anything. Radiohead claimed that our data were “wholly inaccurate,” but refused to provide any of their own statistics.

Recently, in an interviewRadiohead’s Thom Yorke let slip that the free download percentage they were seeing was actually “about 50%,” which is, in fact, not very different from Comscore’s estimate of 62%.

Rather than leading to the band’s conclusion that the Comscore data are wrong, I think Thom Yorke’s acknowledgment that the free download percentage was “about 50%” confirms that Comscore’s statistics were probably very much in the ballpark. In fact, when taking into consideration the fact that Radiohead is probably counting the percent of completed downloads that were free, whereas Comscore counted the percent of initiated downloads that were free, I believe the numbers are very consistent. I say that because we need to bear in mind that when Radiohead’s offer was announced, traffic to the download site was too heavy for the site’s server to handle and it wasn’t unusual to be put into a downloading queue. No doubt, a greater proportion of the people who didn’t pay anything were likely to abandon the download attempt if they had to wait in the queue than were people who had already used their credit card to pay something. This would lead to the band seeing a slightly lower percentage of completed downloads being free (~50%) than Comscore’s 62% estimate of initiated free downloads.

That said, the inescapable conclusion – from Comscore data as well as from Radiohead’s own comments – is that anywhere from 50 to 62% of the people who initiated a download of the “In Rainbow’s” album did so without being willing to pay anything.

While that may sound like a disappointing result, it’s certainly better than the experience of hip-hop artist Saul Williams, whose album “The Inevitable Rise and Liberation of Niggy Tardust” was released online in two versions (with the help of Nine Inch Nails frontman Trent Reznor, who financed and produced the album). One version could be downloaded free, while another higher-quality digital version could be downloaded for $5. CNET news.com reported recently that 82% of the people who downloaded the album chose to do so for free.

I think these results confirm that the majority of consumers – when offered the choice to download music free or to pay for it – will choose the free option. However, this doesn’t mean that this distribution method is economically a failure for the musicians. The fact that they get to pocket most of the cash could well mean that they end up making more profit than if they had distributed through a record label. Of course, we’ll never know for certain until someone discloses some detailed financial data, including profits. I wonder who will be first to do that?

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