Radiohead’s ‘Pick-Your-Own-Price’ Promotion
How much would you pay to download a digital album comprised of the above songs? $1.00? $9.99 plus tax? Nothing, perhaps? These were the questions Radiohead asked fans upon releasing their seventh album, In Rainbows, with the following message splashed across their website: pick your own price. As one of the aforementioned fans, I was thrilled, but also curious about the motivation behind such a surprising decision.
This sales-oriented pricing strategy was likely influenced by the prevalence of free music downloading, which – though illegal – is accessible and socially acceptable. Radiohead’s risk paid off, with critically-acclaimed In Rainbows making $10 million in its first week. And by releasing the album exclusively through their website, rather than an online music store like iTunes, the band actually benefited financially from the increase in sales. Radiohead also profited by foregoing representation by an expensive record label, a partnership that lead singer Thom Yorke notably referred to as a “decaying business model.”
Just as Subway circumvented rivals’ odd pricing strategies with its catchy ‘$5 footlong’ promotion, Radiohead’s ‘pick your own price’ policy differentiated them from the competition due to its being unprecedented in their industry. This is even more significant given that Radiohead is a relatively indie – that is, not mainstream – band, which implies fewer grand-scale advertising opportunities and, consequently, limits the size of their audience. The sales-boosting release of In Rainbows likely attracted new listeners who were able to sample Radiohead’s music with little risk, allowing the band to reach a broader market with future releases.
This assumption will soon be tested, as the band’s eighth album, the King of Limbs, hit shelves computer screens just last month. A physical CD version will also be released on March 28, which I’ll definitely be picking up – despite the $8.99 price tag that will accompany it.