Radiohead(ing) A Marketing Revolution
Radiohead, one of the world’s most renowned rock groups, has started an industry revolution. After producing six albums for EMI records, the band has parted ways with their old record label and independently produced their first album in four years. In Rainbows will be available for FREE download October 10. Or people can opt-in to pay at least 47¢ to cover credit card transaction fees, and add any additional amount they choose. Radiohead, you guys are ingenious. “Why?” you ask, “How do they expect to make money?”
While other major groups around the world are trying to milk every last cent they can from their dwindling overall sales of records, Radiohead has gone ahead and said, “Our fans come first, and the money will follow.” Now, I can listen to the music and decide how much it is worth to me before purchasing, and not liking, the other half of the CD I haven’t heard on the radio, legally and free. Personally, I’m going to spend $30 on the download and also by the box set for $40 that will be available in January of 2008, just to show my support.
This is all a much bigger deal than what is at the surface and the answer to making money isn’t as straight forward as charge $15 and profit 15¢. Radiohead trusts in their fans to support them. They are putting so much confidence in their product that they know people will give them money, even though they don’t have to.
The Larger Picture
Seriously, if you are unaware of the current situation, please research it further to protect yourself from legal action.
Millions of music listeners are “sharing” their music online. Nielson SoundScan has found that CD and download sales combined are shrinking, and media agencies claim it is a result of this digital piracy. This digital piracy has been estimated to “cost” the industry billions of dollars. The RIAA (Recording Industry Association of America) and MPAA (Motion Picture Association of America) are waging a full scale war on piracy to help protect artists consumers, the equivalent of, a union for a dwindling service industry. Downloaders are being sued for hundreds of thousands, media companies are being sued back for sabotaging servers and setting up fake websites as pirating mousetraps, and very angry consumers are caught in the middle with piracy as their only voice of protest with artists who are joining in the fight on the side of the consumers. Radiohead has joined the crusade with their upcoming release.
The Vegetable Grocer
In my frontyard is a chain grocery store where I go to buy vegetables. I have two choices, my first choice is to buy an assorted mix of “enhanced” vegetables for $15, that I can purchase knowing I won’t like, or eat(CD). My other choice is to buy the individual vegetables, that I personally choose, for an increased price per unit, since I’m not buying in bulk (iTunes).
There is also a third choice (piracy). In my backyard is a farmers market. There isn’t much protection there. No flashy storefront, workers telling me where to go and what to buy. The guy who sells the (organic and “enhanced”) vegetables is a little shady and I don’t know if I can trust how good his vegetables will be. The price is hard to beat though. He gives his vegetables away for free, and if they are good, they are exactly what I want. Sometimes shady backyard seller guy steals them from the store, and other times they were legally obtained from local farmers. That shady guy could be me, a family member, and a friend.
The person in your backyard, and whoever grew that fruit, doesn’t make a dime. They are sharing the vegetables because they want them to be accessible to everyone, to spread the vegetables they enjoy. Meanwhile, the store front that only offers “enhanced” vegetables makes a majority of the money, very little profit trickles down to the farmer, and consumers have limited buying options.
War
In the last few years, the shady backyard market upgraded (Bit Torrent). More people went to the market. In turn, the market became less shady. Farmers started to show up at the market endorsing their own organic and “enhanced” vegetables. Inherently, more people also started to steal from that frontyard grocery store, and they brought them into the backyard. They also stole from the back of the store, where the freshest vegetables were contained. People could steal the vegetables before they could even be bought legally in the store.
The store owners became angry at how the free market was becoming successful. Meanwhile, the “enhanced” vegetable market was struggling. To combat the free market, the store owners started to make fake market shops in the back yard. When someone went to the shop, they thought they were going to get some vegetables like usual. Instead, she left with a $220,000 lawsuit charging for the vegetables she wanted and every vegetable she had ever eaten, even though they were digested and long gone. People also noticed that the tents (websites like piratebay) were more rundown than usual because vandals, hired by the frontyard grocery store, were trying to take it down at night. Speed-bumps were put around the open market by the grocery store and a satellite hovered over it 24 hours a day watching everyone. Meanwhile, the frontyard grocery store stayed the same.
There was a time when the frontyard grocery store could have downgraded, rewritten the business plan, and figured out new ways to attract customers and keep them. Instead, they became evil, single-minded and vengeful against the consumers. They weren’t concerned with finding new farmers, offering a more diverse vegetable line, and pushing the vegetables to consumers in new ways. As the market evolved, the frontyard store stayed the same. The frontyard grocery store didn’t want things to change, but the market had been changing all along, and they couldn’t do anything about it. As a result, many more people went to the backyard market, people who never even shopped at the frontyard grocery store. The store didn’t know what else to do besides flex power (hire lawyers, slap lawsuits on POTENTIAL consumers, and devise plans to make people fear not shopping with them). The business was lost.
Potential customers became the grocery store’s enemy, farmers felt pushed around, used, and processed, and the grocery store couldn’t see beyond their own dwindling profit margins.
In Steps Radiohead
Radiohead has joined the backyard consumers. They are a true Anti-Metallica, sitting in the open market, amongst other grassroots artists, with a psychedelic colored storefront, asking people gently for donation if you want to support them.
A humbling moment for the major record label artists. Here is one of the top groups in the world, top groups in my time, using the same grassroots strategy as other artists who are growing their fan base. Not griping that they need more money, everyone knows they obviously do not. They’ll be selling out shows for years to come. They are set for life. Why not spread our gift to everyone who can enjoy it?
Music has never been about major record labels. Its been about the artists reaching the mind and emotions of its listeners. The major record labels aren’t necessary for distribution to the masses anymore. The artists can market and distribute themselves now. The major record industry, we knew, is a fossil of the past, gasping on their last breathe of air. There is a better system now that connects me to artists for free. Consumers obviously don’t think major record labels are worth a dime anymore otherwise they would pay for it. Now, the record labels are choking on capitalism. They are a living fossil of the past.
Artists concerned about the money before the good of their fans, aren’t artists anymore. They are a business formerly known as an artist. Real artists have real fans that will support them with the money they need. Radiohead knows they have dedicated fans. All they need to do, is ask for money. The free market will decide what they are worth. Radiohead is the proud new sponsor of grassroots artists.
Radiohead is taking a revolutionary step in marketing. They aren’t talking trash about record labels, but they are definitely making them look silly and unnecessary. Today, anyone can have a website, produce their own music, have their music hosted on another website, and spread themselves virally on the net. Radiohead is positioning themselves, as a band that is still trying to grow their fan base. Even though they are already huge, they still want to appeal to even more people. They knew their music would be pirated, so they are providing their fans with even more value. They are exclaiming that people downloading aren’t just pirates. Downloaders are also fans. You don’t need to be in the shady market anymore. Radiohead gives us a nicely decorated storefront for all to see and hear their music.
In return, Radiohead, I’ll share your music. I’m going to tell all my friends about the new free CD. I’m your biggest fan because I know you’re on my side. And, by the way, I’m going to give you my money because you can relate to me. You’re treating me like a fan, not a criminal.
Thank you.
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