Radiohead Lets Fans Set CD Price; Most Say $0

Six out of 10 fans paid nothing to download the band's new album.

ByABC News
November 6, 2007, 12:49 PM

Nov. 6, 2007 — -- Last month, Radiohead announced it would let fans set the price for its new album, available for download on the British alt-rock band's official Web site.

Now, the statistics are in and it looks like offering fans free downloads turns them into freeloaders.

More than six out of 10 fans worldwide 62 percent who downloaded "In Rainbows" between Oct. 10 and Oct. 29 paid nothing for it, according to digital research firm ComScore Inc. The 38 percent who did cough up cash paid an average of $6 each. A total of 1.2 million people downloaded the album.

Though the majority of downloaders didn't pay a dime, Billboard senior editor Jonathan Cohen stressed that Radiohead's experiment wasn't a wash. Though the band hasn't revealed how much it's made off downloads of "In Rainbows" thus far, Billboard estimated Radiohead could eventually rake in between $3.2 million to $4.7 million, based on sales of its past albums and digital sales of John Mayer's "Continuum," the most downloaded album of last year.

But those estimates were based on Billboard's pre-release assumption that the average sales price would be $5, an apparently generous assumption. ComScore's initial figures put the average price at a paltry $2.28, according to calculations, for a grand total of $2.736 million in sales. That's not bad, but it's a far cry from the nearly $12 million in sales the band may have seen from selling its album at the regular album price on iTunes.

So was that name-your-price idea a total bust? Maybe not. Because Radiohead made the album available online, the band does not have to pay any of its sales earnings to a record label.

"We estimated that $2.50 or $3.00 per album would've been their royalty rate [had Radiohead put out their album through a label.] Most of the purchase price of an album is money that is recouped by the label for what they spent on promotion, studio costs and administrative costs," Cohen said, adding that since they don't have a contract, Radiohead gets to keep almost all of the revenue generated by the digital sales of "In Rainbows."

Beyond that, Radiohead raised its profile by doing something completely out of the hard-edged, translucent CD box.

"There's no way you could consider this a failure because of the amount of attention it generated," Cohen said. "I think for them it was more about trying something different. And from that perspective it was a home run times 10."