Comments on: Radiohead revisited http://www.truthonthemarket.com/2007/10/01/radiohead-revisited/ Academic commentary on law, business, economics and more Thu, 18 Mar 2010 20:05:20 -0700 http://wordpress.org/?v=2.8.5 hourly 1 By: TRUTH ON THE MARKET » Radiohead results http://www.truthonthemarket.com/2007/10/01/radiohead-revisited/comment-page-1/#comment-120656 TRUTH ON THE MARKET » Radiohead results Tue, 06 Nov 2007 19:30:26 +0000 http://www.truthonthemarket.com/2007/10/01/radiohead-revisited/#comment-120656 [...] thom on Congrats to the GMU Class of 2007.David O'Donnell on Five Affiliated Computer Services Directors Resign.M. Hodak on Five Affiliated Computer Services Directors Resign.Bill Sjostrom on Five Affiliated Computer Services Directors Resign.My Favorite Line I Read Today on I'm a one issue voter.TRUTH ON THE MARKET » I’m a one issue voter on Edwards, Antitrust, and the Return of Von's Grocery?.Brad on "Free is More Complicated Than You Think".TRUTH ON THE MARKET » “Free is More Complicated Than You Think” on The Elusive Profitability of Voluntary Pricing.TRUTH ON THE MARKET » Antitrust Enforcement Levels and Quality Again: A Hypothetical Conversation on Antitrust Activity and Distinguishing Influence from Quality.TRUTH ON THE MARKET » “Free is More Complicated Than You Think” on Radiohead revis... [...] [...] thom on Congrats to the GMU Class of 2007.David O’Donnell on Five Affiliated Computer Services Directors Resign.M. Hodak on Five Affiliated Computer Services Directors Resign.Bill Sjostrom on Five Affiliated Computer Services Directors Resign.My Favorite Line I Read Today on I’m a one issue voter.TRUTH ON THE MARKET » I’m a one issue voter on Edwards, Antitrust, and the Return of Von’s Grocery?.Brad on “Free is More Complicated Than You Think”.TRUTH ON THE MARKET » “Free is More Complicated Than You Think” on The Elusive Profitability of Voluntary Pricing.TRUTH ON THE MARKET » Antitrust Enforcement Levels and Quality Again: A Hypothetical Conversation on Antitrust Activity and Distinguishing Influence from Quality.TRUTH ON THE MARKET » “Free is More Complicated Than You Think” on Radiohead revis… [...]

]]> By: TRUTH ON THE MARKET » “Free is More Complicated Than You Think” http://www.truthonthemarket.com/2007/10/01/radiohead-revisited/comment-page-1/#comment-120231 TRUTH ON THE MARKET » “Free is More Complicated Than You Think” Thu, 01 Nov 2007 15:46:07 +0000 http://www.truthonthemarket.com/2007/10/01/radiohead-revisited/#comment-120231 [...] » Intel’s Loyalty Rebates: Why the Interventionists Are Wrong on NYT's Freudian Slip.TRUTH ON THE MARKET » Yet Another Voluntary Pricing Experiment on Radiohead revisited.M. Hodak on Antitrust Activity and Distinguishing Influence from Quality.David on Antitrust Activity [...] [...] » Intel’s Loyalty Rebates: Why the Interventionists Are Wrong on NYT’s Freudian Slip.TRUTH ON THE MARKET » Yet Another Voluntary Pricing Experiment on Radiohead revisited.M. Hodak on Antitrust Activity and Distinguishing Influence from Quality.David on Antitrust Activity [...]

]]> By: TRUTH ON THE MARKET » Yet Another Voluntary Pricing Experiment http://www.truthonthemarket.com/2007/10/01/radiohead-revisited/comment-page-1/#comment-120084 TRUTH ON THE MARKET » Yet Another Voluntary Pricing Experiment Tue, 30 Oct 2007 20:32:08 +0000 http://www.truthonthemarket.com/2007/10/01/radiohead-revisited/#comment-120084 [...] time from Paste Magazine (HT: Peter Schwartz via Wired Blog Magazine), and motivated by the Radiohead Experiment, and with an interesting twist: Subscribers who choose to pay more than the normal $19.95 asking [...] [...] time from Paste Magazine (HT: Peter Schwartz via Wired Blog Magazine), and motivated by the Radiohead Experiment, and with an interesting twist: Subscribers who choose to pay more than the normal $19.95 asking [...]

]]> By: The great Radiohead experiment: data and potential applications « Voir Dire http://www.truthonthemarket.com/2007/10/01/radiohead-revisited/comment-page-1/#comment-118416 The great Radiohead experiment: data and potential applications « Voir Dire Fri, 05 Oct 2007 12:35:17 +0000 http://www.truthonthemarket.com/2007/10/01/radiohead-revisited/#comment-118416 [...] 5th, 2007 · No Comments A good number of blogs (hat tip to Truth on the Market) have documented the “Radiohead experiment” - namely, the very popular band has decided [...] [...] 5th, 2007 · No Comments A good number of blogs (hat tip to Truth on the Market) have documented the “Radiohead experiment” – namely, the very popular band has decided [...]

]]> By: Paul http://www.truthonthemarket.com/2007/10/01/radiohead-revisited/comment-page-1/#comment-118242 Paul Wed, 03 Oct 2007 00:50:43 +0000 http://www.truthonthemarket.com/2007/10/01/radiohead-revisited/#comment-118242 If there is money left on the table as asserted here, and Radiohead desires to maximize financial wealth, what will be the reaction of fans if this experiment does not maximize financial wealth and Radiohead decides to revert back to selling cds under the old model. Will fans be satisfied with just one free cd? I doubt it. A smarter strategy for Radiohead would have been to release content that is different from the usual studio recorded cd. For instance, release a live album for "free" with varying versions of upcoming studio songs. This would allow Radiohead to satisfy fans with a free product and also allow Radiohead to get valuable "feedback" from their fans. Software companies essentially do this when they release "alpha" and "beta" versions of software. Should be interesting.. If there is money left on the table as asserted here, and Radiohead desires to maximize financial wealth, what will be the reaction of fans if this experiment does not maximize financial wealth and Radiohead decides to revert back to selling cds under the old model. Will fans be satisfied with just one free cd? I doubt it.

A smarter strategy for Radiohead would have been to release content that is different from the usual studio recorded cd. For instance, release a live album for “free” with varying versions of upcoming studio songs. This would allow Radiohead to satisfy fans with a free product and also allow Radiohead to get valuable “feedback” from their fans. Software companies essentially do this when they release “alpha” and “beta” versions of software. Should be interesting..

]]> By: Urijah http://www.truthonthemarket.com/2007/10/01/radiohead-revisited/comment-page-1/#comment-118234 Urijah Tue, 02 Oct 2007 21:48:42 +0000 http://www.truthonthemarket.com/2007/10/01/radiohead-revisited/#comment-118234 What makes you think they receive more (net) than $2 a CD now? What makes you think they receive more (net) than $2 a CD now?

]]> By: market failure, right here http://www.truthonthemarket.com/2007/10/01/radiohead-revisited/comment-page-1/#comment-118225 market failure, right here Tue, 02 Oct 2007 19:27:06 +0000 http://www.truthonthemarket.com/2007/10/01/radiohead-revisited/#comment-118225 Nice comment, Hanno. I'd add that I think that providing a secure download through the official website might decrease piracy through BitTorrent, etc. One of the main arguments people make for downloading pirated music is that most of the money goes to the record label. People can't really make that claim with people like Radiohead, and, on a lesser scale, people like Kristin Hersh: http://www.throwingmusic.com/. So, while Strategy A may lead option 1 to cannablize option 3, it may also cannablize the black market. Also, I'd add that strategy A allows for a far greater level price discrimination, offering everything from the barebones download to the big boxed set. Nice comment, Hanno.

I’d add that I think that providing a secure download through the official website might decrease piracy through BitTorrent, etc.

One of the main arguments people make for downloading pirated music is that most of the money goes to the record label. People can’t really make that claim with people like Radiohead, and, on a lesser scale, people like Kristin Hersh: http://www.throwingmusic.com/.

So, while Strategy A may lead option 1 to cannablize option 3, it may also cannablize the black market.

Also, I’d add that strategy A allows for a far greater level price discrimination, offering everything from the barebones download to the big boxed set.

]]> By: Hanno Kaiser http://www.truthonthemarket.com/2007/10/01/radiohead-revisited/comment-page-1/#comment-118208 Hanno Kaiser Tue, 02 Oct 2007 15:08:21 +0000 http://www.truthonthemarket.com/2007/10/01/radiohead-revisited/#comment-118208 Compare the expected value of two business strategies. <b>Strategy A</b> 1. Free album download 2. Customer information from (1) 3. Album sales in stores with lyrics, cover art, and some other stuff that fans value in the bundle 4. Concert ticket sales 5. Merchandise sales <b>Stragegy B</b> 1. - 2. - 3. Album sales in stores with lyrics, cover art, and some other stuff that fans value in the bundle 4. Concert ticket sales 5. Merchandise sales Obviously, the band expects A to be more profitable than B. In A, the main downside relative to B is (1) cannibalizing sales of (3). The upside is reaching a broader audience and increasing the loyalty of existing fans, which can reasonably be expected to translate into some incremental revenues from (3), (4), and (5). The information collected in (2) may also be valuable. Will that incremental revenue more than offset what Radiohead is leaving on the table? That very much depends (among other things) on how much the band would have made from selling records under a contract with a label. For most artists (teachers, consultants, lawyers, doctors, etc.), piracy isn't the most pressing problem, obscurity is. Thus, a strategy of "giving away stuff in order to sell the same and other stuff" may make a great deal of sense. Radiohead's decision to make copies of their new album available for free suggests that even for a headliner, the business opportunities from further increasing its poupularity (diminishing obscurity) outweigh the expected losses from cannibalization. Compare the expected value of two business strategies.
Strategy A
1. Free album download
2. Customer information from (1)
3. Album sales in stores with lyrics, cover art, and some other stuff that fans value in the bundle
4. Concert ticket sales
5. Merchandise sales
Stragegy B
1. -
2. -
3. Album sales in stores with lyrics, cover art, and some other stuff that fans value in the bundle
4. Concert ticket sales
5. Merchandise sales
Obviously, the band expects A to be more profitable than B. In A, the main downside relative to B is (1) cannibalizing sales of (3). The upside is reaching a broader audience and increasing the loyalty of existing fans, which can reasonably be expected to translate into some incremental revenues from (3), (4), and (5). The information collected in (2) may also be valuable. Will that incremental revenue more than offset what Radiohead is leaving on the table? That very much depends (among other things) on how much the band would have made from selling records under a contract with a label. For most artists (teachers, consultants, lawyers, doctors, etc.), piracy isn’t the most pressing problem, obscurity is. Thus, a strategy of “giving away stuff in order to sell the same and other stuff” may make a great deal of sense. Radiohead’s decision to make copies of their new album available for free suggests that even for a headliner, the business opportunities from further increasing its poupularity (diminishing obscurity) outweigh the expected losses from cannibalization.

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