Latitude

This post is part 2 of a 3-post series:

Part 1 – “Reznor vs. Radiohead: Sing-Alongs From That Place Between Business Models”

Part 3 – “Reznor’s Future Music Model: Streaming & Shareable?”

Radiohead’s Stunt Marketing

In explaining the rationale behind “the most audacious experiment in years,” according to The New York Times, Yorke remarked: “every record for the last four—including my solo record—has been leaked. So the idea was like, we’ll leak it, then.”

For its October 2007 release of In Rainbows, Radiohead implemented a pay-what-you-want digital download model (which ended 2 months later, piggybacked by a limited edition discbox set in December and the physical album release in January 2008).

The purchase statistics surrounding the “experiment” have been well-sought after, as one might imagine, but many of the reports come to a lot of grand conjectures from band partisans and he-tallied-she-tallied talk. In the end, it seems few would claim that the overall outcome was an unfavorable one; the album, once released in retail format, reached #1 on both UK and US charts, selling over hundreds of thousands of physical copies in its first few weeks, and more than 3 million copies (both physical and digital formats) in total:

Factoring in free downloads, ComScore said the average price per download was $2.26. But it did not specify a total number of downloads [...]. Under a typical recording contract, a band receives royalties of about 15 percent of an album’s wholesale price after expenses are recovered. Without middlemen, and with zero material costs for a download, $2.26 per album would work out to Radiohead’s advantage — not to mention the worldwide publicity.

The New York Times, “Pay What You Want For This Article”

Reznor’s Reaction & Replication

Trent Reznor outspokenly expressed his feelings that In Rainbows was “low quality” and “insincere.” In actuality, he seemed to take more umbrage at what the album’s release meant for artists rather than fans– essentially, a relinquishment of value self-determination: “Some have argued that giving music away free devalues music. I disagree. Asking people what they think music is worth devalues music.”

To Reznor, free is a price, not a value– and some fan-prescribed prices are, at least to his mind, cheaper than free.

But one has to wonder if some of his philosophically-buttressed vehemence doesn’t stem from a similar replication of the In Rainbows experiment– gone sour. Reznor promoted Saul Williams’ November 2007 album release The Inevitable Rise and Liberation of NiggyTardust! on the NIN Web site, giving fans the option to download lower quality mp3s for free, or pay $5 to support the artist and receive higher quality files. In the end, only 18% of fans opted to pay the $5. (Supposedly, the band still made more money than they would’ve via major record label production).

Side by Side: The Cost of Comparison

Reznor was sorrily disappointed in so few fans’ willingness to support the artist when given the choice, but perhaps also surprised that so few opted for the higher quality mp3 files that came with the $5 purchase. He gets what Wired recently termed the tri-faceted “rubric of accessibility,” when it comes to desirability in the digital age: “ease of use, continuous availability, and low price.”

In a sage post on the NIN forum, he listed “give your music away as high-quality DRM-free MP3s” as a promotional must-do for little-known artists. Being downloadable, shareable, and a mere $5, what went wrong? Or, perhaps it would be more judicious to ask: what could have gone better?

The Mp3 Effect (or a predilection for Good Enough tech), as Wired recently termed it. Mp3s were originally snubbed because they sounded low-quality (and they were) compared to their cumbersome CD counterparts; ironically, now we accept even more compressed digital formats in light of increasingly size-efficient players and storage devices. Why?

A Stanford University professor conducting a trending study on student perception of digital music formats reports:

Every year, more and more students preferred the sound of mp3s, particularly for rock music. They’ve grown accustomed to [...] the percussion sizzle–aka distortion–found in compressed music. To them, that’s what music is supposed to sound like.

Radiohead offered one (according to Reznor, “low quality”) format of In Rainbows for pay-what-you-want digital download: a 160kbit/s mp3 version.

Whichever way you slice it, mp3s leave something to be desired quality-wise– so with Reznor’s / Saul Williams’ free format already offering higher quality sound than Radiohead’s In Rainbows, it’s little wonder, perhaps, that the majority of today’s increasingly low price / low-fi fanbase didn’t feel very incented to shell out $5 for the yet higher quality version of their album.

Singing a Different Tune: Potential Confounding Factors

It’s worth acknowledging that the two “case studies” aren’t entirely analogous. Radiohead is the first to admit that its business “models” aren’t models at all– they’re not intended to be transferable or even replicated by the band itself: “This was a solution to a series of issues. I doubt it would work the same way ever again.”

Still, Saul Williams, a relative unknown, can be seen as a smashing success story here; it’s no small feat that 18% of fans opted to pay $5 for the band’s album, promoted primarily through the NIN Web site (and with a higher gross profit per sell than if it had been distributed by a major record label). Not to mention–what this kind of promotion for artists-by artists may have meant in terms of “impressions,” as well as concert ticket, tour merchandise, book (in the case of Saul Williams), and album sales.

One also wonders if the psychological responsibility that accompanies personal value determination (as with Radiohead’s pay-what-you-want model) compelled fans toward payment; after all, with no differentiation in mp3 quality (i.e. no reward for payment), Radiohead averaged $2.26 per album sale (including free downloads).

There’s something strangely incenting about being asked, as guitarist Jonny Greenwood put it: “Why don’t you pay us what you think it’s worth?’”

Photo courtesy of psc631798’s Flickr.