Tuning In: Radiohead Cuts Out Record Company
Popular English band Radiohead has embarked on an innovative marketing strategy that has shaken up the record industry. They cut ties with their record label and embarked on an independent project that allows them to set their own prices for their music. This new idea has Radiohead selling individual songs off their new album via their Web site and the fans can set their own price, be it free or regular retail price. Musician/drummer and Dominick Peruso, associate professor of accounting, gave insight into this new idea of marketing in an interview that not only gives perspective into Radiohead's idea but the music industry.
Question
Why would a band sell their music off their Web site for prices set at the discretion of the fans?
Answer
The "online tip jar" is primarily a publicity stunt although it's been hailed as a reinvention of the music industry. Radiohead will release a boxed set with a CD, vinyl, bonus tracks and other special features in December. The bonus tracks will not be available online. The elimination of a major record label as distributor is new for an established band. Several other musicians are planning similar flexible pricing online distribution of new music.
Q
Would this help or hurt the music industry?
A
Earning a living from the sale of recorded music remains a problem. Some have argued the tip jar model solves the illegal downloading problem. But for consumers, why steal something that's free? For artists, why try to enforce a copyright if there's no value anyway? Artists are forced to rely more heavily on touring and merchandise for support. Under the Radiohead scheme, recorded music is essentially a marketing expense to attract fans to performances, merchandise, and other special items like the boxed set.
There is a lot of excitement by artists, who have traditionally been victims of unfair recording contracts, about the "death" of the record label. Many artists are envisioning huge windfalls from the sale of their music online, direct to their fans. This idea works well for established artists like Radiohead, Nine Inch Nails, and Neil Young and allows them the freedom of releasing music directly to the public without record label interference or approval. But for new artists with no established fanbase, it's highly unlikely they will find someone to pay for their music in any form. Record labels are less likely to take a chance on a new artist because of the time needed to recoup their investment.
Q
Would the bands you play with consider doing this type of marketing strategy?
A
Like all new and/or unknown artists, offering some music for free is a given if you want to attract an audience.
Q
Is this something the music industry should look toward as a future staple in music marketing?
A
The music industry dropped the ball during the Napster-era. Consumers clearly signaled the desire for online music distribution but labels continued to protect physical distribution outlets. That was a failed strategy. A better plan would have been to partner with online distributors and find ways to add more value to their products.
Q
How beneficial is this for the bands?
A
This is beneficial because the band seizes creative and marketing control. They also get all of their profit directly, assuming they have paying customers.
- Courtney Hruska '08, student reporter