Radiohead Fans Like Band, Love Freebies

It’s been nearly a month since the British rock band Radiohead shook the music industry by releasing an entire album on its Web site and allowing fans to pay whatever they wanted, down to and including nothing, to download and own the music forever.

Now, the preliminary sales results are in, as tabulated by comScore.

The online tracking firm released a report Monday in which it found that almost two-thirds of those who downloaded the album, “In Rainbows,” decided to pay nothing for it.

While 1.2 million people visited the site, comScore said, the tracking service could say only that it detected a “significant percentage of visitors ultimately downloading the album.” Of that group, only 38 percent of downloaders volunteered to pay anything for the tracks — the remainder paid only the processing fee of about 50 US cents, a fee attached to every download regardless of the price decided upon by the listener.

ComScore’s numbers are based on data garnered from the 2 million Internet users that allow the company to monitor their online behavior.

The Numbers

Among the 38 percent of global downloaders who paid for “In Rainbows,” 40 percent live in the U.S. where the average purchase price was $8.05 for the album. Americans paid almost twice as much as the 36 percent of downloaders who live in other countries. Outside the U.S., the average price paid for the album was $4.64, significantly less than what users must pay for an album at the iTunes Music Store, the most popular music download destination online.

The difference, according to comScore, could be attributed to a larger amount of disposable income in the U.S. and the greater popularity of free file-sharing applications in other countries.

Among those who paid anything above the service fee, less than one in five, 17 percent, paid $4 or less; meanwhile, just over one in 10, 12 percent, paid between $8 and $12. Only 4 percent paid more than $12. The larger payments amounted to 79 percent of transactions conducted in dollars.

Sixty percent of U.S. downloaders decided to pay nothing; 64 percent of non-U.S. users opted to take the album for free.

Success or Bust?

Although only 38 percent paid for the download, that does not mean that Radiohead did not have the right idea, Mike Goodman, a Yankee Group analyst, told the E-Commerce Times. The upcoming release of the “In Rainbows” discbox, which includes includes a vinyl album, bonus CD and other trinkets, is priced at $80 and will go on sale sometime after January. The group, he said, has initiated what amounts to a two-pronged selling strategy.

“I don’t think it was a bad idea. One thing that’s really important here is that you’re separating the digital downloads from the CD market. Remember, Radiohead still intends to put this album out as a CD,” he explained.

“They’re going to make money off of that as well. And they just signed a deal for national distribution,” he added. “Radiohead is controlling the rights, so they can decide how, when and where it’s being distributed without being at the beck and call of the recording industry.”

Without knowing how much the group spent to make the album, it’s impossible to say what sort of profit they made from digital sales, Goodman stated. ComScores numbers are hard to make any reliable calculations with, he continued. However, if 1 million users downloaded the album and 380,000 paid the average U.S. price of $8.04, then the band made perhaps $2 million to $2.5 million.

“That would be way and beyond the price it cost them to make this album. Not only does it make it profitable, it makes it nicely profitable. And they don’t have to share it with a record label.”