In retrospect, I have come to partially disagree with my own assessment. I did not account for the fact that Radiohead also released an $81 box set with the digital download, and that 100,000 loyalists bought the set -- earning the band a cool $8.1 million in addition to the revenues they earned from the digital download (believed to be in the ballpark of $3 million). When you factor this in, the band did very well for themselves. Not quite as well as they usually do on big-label albums (even after middle-men's takes). But for an experiment, I would call it a success.
What's fascinating about "In Rainbows" is that roughly 8% of the users accounted for approximately 80% of revenues from the site. That speaks volumes, and it dovetails really well with recent blog posts (linked here and elsewhere) about the new metrics of success in digital distribution: i.e., monetizing loyalists. A small core of loyalists who are willing to follow you to the ends of the earth are worth more than fairweather fans.
I'm actually contemplating doing a more in-depth analysis on this, Louis C.K., Reznor, and others in this space. While I believe the jury is still out, and I believe that most people will pay nothing if offered the opportunity, there are clearly those who will pony up -- and even those who will pony up big. Piracy -- or free acquisition, in this case -- doesn't seem to matter too much if the loyalists are there, and you can differentiate the product for them. (In this case, the notion of a "fair price" actually seems to be relative).
It's interesting how Radiohead seemed to succeed by recognizing this fact, whereas Reznor's experiment failed to account for it. And Louis C.K. avoided the free option altogether, which is another way to go.
What's fascinating about "In Rainbows" is that roughly 8% of the users accounted for approximately 80% of revenues from the site. That speaks volumes, and it dovetails really well with recent blog posts (linked here and elsewhere) about the new metrics of success in digital distribution: i.e., monetizing loyalists. A small core of loyalists who are willing to follow you to the ends of the earth are worth more than fairweather fans.
I'm actually contemplating doing a more in-depth analysis on this, Louis C.K., Reznor, and others in this space. While I believe the jury is still out, and I believe that most people will pay nothing if offered the opportunity, there are clearly those who will pony up -- and even those who will pony up big. Piracy -- or free acquisition, in this case -- doesn't seem to matter too much if the loyalists are there, and you can differentiate the product for them. (In this case, the notion of a "fair price" actually seems to be relative).
It's interesting how Radiohead seemed to succeed by recognizing this fact, whereas Reznor's experiment failed to account for it. And Louis C.K. avoided the free option altogether, which is another way to go.