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Two out of Five downloaders paid for ‘In Rainbows’

ComScore released a study of online sales today on Radiohead’s ‘In Rainbows’. The results of the study, based on data obtained from ComScore‘s worldwide database of 2 million people, showed that 2 out of 5 downloaders were willing to pay an average of $6 for “In Rainbows.

During the first 29 days of October, 1.2 million people worldwide visited the “In Rainbows” site, with a significant percentage of visitors ultimately downloading the album.  The study showed that 38 percent of global downloaders of the album willingly paid to do so, with the remaining 62 percent choosing to pay nothing. The percent downloading for free in the U.S. (60 percent) is only marginally lower than in the rest of the world (64 percent).

“I am surprised by the number of freeloaders,” said Fred Wilson, managing partner of Union Square Ventures and well-known music aficionado. “This shows pretty conclusively that the majority of music consumers feel that digital recorded music should be free and is not worth paying for. That’s a large group that can’t be ignored and its time to come up with new business models to serve the freeloader market.”

While freeloaders appear to be as prevalent in the U.S. as in the rest of the world, the U.S. paying customer is willing to pay far more ($8.05 per download) than his international counterpart ($4.64). Of those who were willing to pay, the largest percentage (17 percent) paid less than $4. However, a significant percentage (12 percent) were willing to pay between $8-$12, or approximately the cost to download a typical album via iTunes, and these consumers accounted for more than half (52 percent) of all sales in dollars.

“I think everybody has overlooked one very important aspect of the ‘pay what you’d like’ model,” says Michael Laskow, CEO of TAXI, the world’s leading independent A&R (Artist and Repertoire) company. “Radiohead has been bankrolled by their former label for the last 15 years. They’ve built a fan base in the millions with their label, and now they’re able to cash in on that fan base with none of the income or profit going to the label this time around. That’s great for the band and for fans who paid less than they would under the old school model.  But at some point in the not too distant future, the music industry will run out of artists who have had major label support in helping them build a huge fan base. The question is: how will new artists be able to use this model in the future if they haven’t built a fan base in the millions in the years leading up to the release of their album under the pay what you’d like model?”

“The high percentage of users actually paying more than a few dollars for this download is actually pretty impressive,” said Jim Larrison, general manager of corporate development at Adify, a provider of online ad network services. “I expected the vast majority of users to download the album for free or at most a few dollars. With 40 percent of consumers willing to pony up real money, this is a true win for the music industry as it shows there is still perceived value in the digital form of entertainment. Of course it does suggest that the marketplace is continuing to migrate and the music industry needs to shift with consumer behavior. There are numerous methods to monetize the music, via shows and concerts, merchandising and box sets, commercial licensing, and even advertising; which is where the industry needs to progress towards, as the 40 percent paying for music might not be sustainable.”

“It is important to note that Radiohead has single-handedly accomplished a milestone that the recording industry has failed to achieve – they’ve eliminated much of the profit attrition related to piracy or illegal copying,” said Edward Hunter, comScore analyst and part-time songwriter. “Moreover, they have garnered good faith with the music consumer at a time when it’s all the rage to bash the industry and the artists who ally themselves with it. And then you have the reduction in cost of sale, cost of promotion and production. I’d call this a resounding success for Radiohead and music fans everywhere – and a fantastic artistic effort as well.”

34 Comments

  • Bullshit, Bullshit, Bullshit…that article is based on a very small sample, compared to the over 1.2 million downloads

  • allow me to repeat my previous question here, as i believe it placed too far down the line to be noticed on the previous thread:

    Does anyone know specifically what are
    the terms of radiohead’s old contract
    with emi? does ownership of the music
    and artwork belong to emi or to radiohead?
    do the publishing rights at some point
    revert to radiohead after a period of time?
    does emi’s ownership apply only to
    officially released albums, or everything
    radiohead recorded while under contract?
    like many respondents here, i wonder
    about an eventual box set of singles,
    eps, unreleased, perhaps bundled with
    live material and/or dvds. there is a lot
    of money to be made off of us loyal radiohead
    buyers, but they have to put out the right product.
    this box is shite, and it won’t save emi
    or hurt sales of in rainbows. i’ll be
    buying the physical cd in addition
    to the disc box of in rainbows.

  • new artists will have to find a new way
    to promote themselves. the major labels
    are dinosaurs. music is worth money,
    but with the death of radio and mtv
    as viable sources for new music, free
    downloads and streaming content is the
    only way to find new music, and the
    independent artists and labels will thrive
    in this atmosphere. they will profit
    from selling cds and records and memorabili
    at live shows. the idea that radiohead
    have harmed future bands that would
    have benefited from major label promotion
    is absurd. very few legitimate artists
    benefit from anything done by a corporate
    label. radiohead have taken the next step
    in destroying the major label system,
    but that was well on its way as soon
    as napster hit the scene.

  • The research is flawed. The sample is based on only 200 people who visited the Inrainbows website. Also, they didn’t provide a margin of error, i.e. the research is crap and inconclusive.

  • the ‘research’ is also stolen network traffic off of ComScore’s spyware. What I don’t get is why everyone is reporting this like it’s real news.

  • “The results of the study, based on data obtained from ComScore’s worldwide database of 2 million people…”

    Where are you seeing “200″?

  • Rhys:
    There was another article with more detail. Out of the 2mm people that they monitored, 200 visited the Inrainbows site. The report they compiled is based those 200 people.

  • With regard to mike’s question regarding rights of release -

    Nobody really knows. It’s usually joint ownership. With the band owning their own publishing, and the label owning all recordings (released or unreleased).

    While it’s typical for a major label to be able to put together a best-of, Radiohead may have gotten EMI to drop that provision somewhere along the way. At most, EMI only has the power to “repackage” officially released pre-2004 material.

    This also means that both sides have to mutually approve the release of anything from the vaults. So, if EMI and Radiohead piss each other off, that is very bad. It means nothing “new” from the EMI years comes out. So, unless Radiohead suddenly have a buring desire to record new versions of songs like “Big Boots/Man-O’-War”, don’t expect an official release of that song for a very long time (like after the band splits up)…

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  • I totally agree with poster “onafriday510″ … there was also an article on yahoo titled “Most Fans Paid $0 For Radiohead Album.” Which I think is total bs because I doubt all the dowloaders were fans, probably curious people that aren’t fans at all.

  • I wonder how many fans that paid nothing for the download purchased the box set for 40 quid (which isn’t captured in the research and would run counter to the assertion that “This shows pretty conclusively that the majority of music consumers feel that digital recorded music should be free and is not worth paying for.” Talk about gross generalizations.

    In my case, i happily paid for the box set, and figured after dropping $80, grabbing the download for free was a pretty fair deal.

  • TO YOU 3 out of 5′ers:
    Goddamn freeloadin’ sons’ o’ bitches!!!
    TAKERS, PARASITES!!
    Is that what Radiohead means to you….nothing?

  • i got the download for free..i dont have a credit card.
    but i will get the album when its out. i have all their cds and some eps and singles…so dont kill me…

  • [...] statement added: “However, they can confirm that the figures quoted by the company comScore Inc are wholly inaccurate and in no way reflect definitive market intelligence or, indeed, the true [...]

  • I think the most important info to get out of any of this is that this will not work for Pop stars such as Britney Spears, etc. I don’t believe they have the kind of loyal fans that respect them as artists like I (we??) do with Radiohead and the slew of other bands I’d gladly pay for. (I still pretty much buy all my music on CD still and barely download)

  • Though it’s now been proved that this story is false, it must be noted that people like me who ordered the discbox will also be counted among those who paid nothing for the download as it was automatically free for us.

  • [...] here for [...]

  • this is pure shit,
    don’t you realize over half of the world doesn’t have money to do things that they would love to do?

    we live in a poor world

    yeah freeloaders sounds just bad
    i mean they aren’t a minority, so i say, the people who own the money of the world should rott in hell

  • i’m just sad

    the labels put theirselves on the ‘good’ side, and the ordinary people who can’t afford records are the ‘bad guys’, come on people, radiohead is humankind culture, i don’t know how you put a price on that, affordable for most of the world……

    why we should pay for music? that’s nonsense, when we buy a record, we’re feeding this big parasite that make regular people look like shit.

    i’m very glad radiohead quit emi or whatever, and it’s very funny seen emi doing some sort of box set, they are so desperate for selling stuffs.

    use your mind and look around you.
    i bet over half of the world doesn’t have a warmth bed at night.

  • I see all of these lame ass comments about the poor, and people that have no money…blah, blah, blah.
    You know what, if you have a damn computer to post your bitch then you have 2 bucks to pay for a download now don’t you. PISS OFF!!

  • it is true that half the population of the world lives under-nourished and in poverty… let us thank god that we can squabble about bands and record companies…. I paid 7 bucks for my download and it was worth it

  • [...] statement added: “However, they can confirm that the figures quoted by the company comScore Inc are wholly inaccurate and in no way reflect definitive market intelligence or, indeed, the true [...]

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