Absurd Interpretation of Fairness

This article condemns Radiohead for ripping off consumers by allowing them to pay what they think is appropriate to download the group’s new album.  Apparently, some consumer might pay Radiohead money that should rightfully go to the major labels.  Read this and laugh.

“Will Radiohead leave fans high and dry?  It may sound preposterous to accuse the British rockers of gouging their followers.  The band is letting them decide how much to pay for a downloaded version of new album “In Rainbows.” But early indications suggest that Radiohead’s loyal followers are paying too much for the band’s seventh disc.”

“According to a poll conducted by United Kingdom music magazine NME, the average fan appears to be willing to pay $10 for a digital copy.  Now, that may not sound like a blow out. It’s the going price for most records on Apple’s iTunes. And that price, in turn, looks to be about right for a digitally downloaded album.”

“Consider the economics of the average CD.  It retails for about $16 and costs about $6.40 to manufacture, distribute and sell in a store, research outfit Almighty Institute of Music Retail says.  These costs are essentially zero when music is sold online.  That’s why iTunes can charge roughly $10 for a downloaded album.”

“Radiohead’s fitter, happier approach slices out even more cost.  The band pulled the ripcord on EMI, so it doesn’t have to share profits or help pay the label’s overhead. As a well-known band it’s also able to take the knives out on marketing and promotion costs, cutting these by as much as two-thirds.  Subtract these expenses and Radiohead may be able to distribute an album for as little as $3.40 a copy.”

“Now, fans may be delighted to pay $10 because they think the album is

so good and Radiohead deserves the extra cash.  But Radiohead prides

itself on its anticorporate and anti-materialistic ethos.  To avoid letting down fans, it might be more productive to adopt a no-surprises policy and fix a simple, fair charge for its record.”

Cyran, Robert, Rob Cox and Mike Verdi. 2007. “What Price a Download? Given the Option to Name Their Own Price for Album, Radiohead Fans Overspend.” (3 October): p. C 14.

http://online.wsj.com/article/SB119136863867147050.html?mod=googlenews_wsj

3 comments so far

  1. Jim Westrich on

    What Radiohead did is not that new (even for “famous” groups as Prince, Smashing Pumpkins, etc. have done the same thing) although there motivations are. Radiohead does seem to have a fairly commercial alternative built in with the $40 physical box deal.

    Issa (Jane Siberry) has been doing this for years and although she is now fairly out of public attention she reports that allowing people to pay what they want (she calls it a sliding scale) has increased her revenue. It is interesting that Issa gets more money per song than commercial download sites or even her “suggested price” That extra money coupled with the fact their is virtually no overhead (Issa, even when popular, never spent a lot of money on decent production of her work) has worked for her.

    Radiohead has gotten some criticism from some progressive people who see record labels in a communal way. That is, a succesful artist on a label subsidizes the discovery and nurturing of new talent on that label. The RegisterUK had an article critical of Radiohead along these lines but I don’t entirely by it myself.

  2. Jim Westrich on

    I apologize for getting my “there” and “their” mixed up above. It is sad that I have to consciously think of the difference to get it right.

  3. mperelman on

    Jim, I did not know about this. I knew about restaurants using voluntary pricing, but they did not get attacked for cutting out the middlemen.


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