Radiohead makes millions with free digital content

While the AP headline may be “Most Fans Paid $0 for Radiohead Album”, half the real story is buried in the piece and the other half isn’t really there at all.

In October, Radiohead offered up their latest release “In Rainbows” as a digital download on their website with a “fill in the blank” price to be determined by the customer. Customers could pay whatever – including $0 – that they felt the music was worth to them.

Now the data is in and 38% of the people worldwide, when faced with a legitimate option to pay nothing actually paid an average of $6 for the music. The average for U.S. purchases was $8.

That is an astounding affirmation of the “pay what you like” or “donationware” model.

The first piece of Radiohead’s Web empire

Let’s look at what Radiohead got out of their viral marketing efforts so far:

  • Their website currently has 102,420 inbound links as reported by Yahoo. Pretty nice for a domain that was purchased under 6 months ago.
  • Google is currently reporting a toolbar PageRank of 6, for whatever that is still worth.
  • Technorati lists that the site has been blogged about over 8,000 times.
  • 1.2 million people visited the website to download their “album”.
  • If we assume that a million of those followed through the download process, it means that Radiohead has made about $2,280,000 in sales thusfar – with almost no real overhead except for bandwidth.
  • Perhaps a million people listening to their music – this is a great foundation for their next release as long as the music is quality (I like it anyway!).

This is a great foundation on the Web for them to build on with future releases.

That $2,280,000 is almost pure profit. No packaging, no advertising, no hands in Radiohead’s collective pockets.

Not bad considering that usually only cents on the dollar of a CDs purchase price typically ever make it to the musicians themselves.

The big question is with the ability for artists to produce, distribute and virally promote their music themselves how long do the record companies have left?


  1. Fiar wrote:

    The big question is with the ability for artists to produce, distribute and virally promote their music themselves how long do the record companies have left?

    Not long, I hope. The sooner they die, the better.

  2. radiohead 2008 wrote:

    yes, radiohead guys are the best! i got my album for 5$,and it rocks!!

  3. Sectionals wrote:

    I wish more artists would follow Radiohead’s example. The artist makes money, their audience pays less money for the music, everyone is happy! Everyone except the RIAA that is, faceless soulless corporations that add no value.

  4. Lossofsleep wrote:

    The problem with kind of campaign is that not many bands would get away with it. It takes more than guts, it takes quality. I would gladly pay 10$ or 20$ for a radiohead to assure they keep making music. I wish there was a way i could pay 5$ to make some bands stop making such crap. LOL!

  5. Jason wrote:

    The last point is what hits in the most. Radiohead would have otherwise made mere pennies with each CD sale and we would have to pay $20 like usual. It’s a win-win situation.

  6. kevin wrote:

    all those boy bands like mfly or daft punk please stop making music

    Tenacios d kills

  7. Raymond Genandt wrote:

    Wait, since when is Daft Punk a boy band? That’s one of the most ridiculously stupid comments I’ve heard in a while. Boy bands are things like NSYNC, not Daft Punk.

    Back on track though, Radiohead’s got the right idea but I think Prince did it better by giving his album away and making money on shows alone.

  8. Bill Vincent wrote:

    More power to the musicians, may the employment office find the record execs new jobs at BK or 7-11, and may someone invent a device that keeps clueless, non-spelling dweebs like kevin off our Internet.

    FTR, I paid 8 bucks for Rainbows. Great album.

  9. Jamconnect wrote:

    I can’t wait until August because I’ll be getting to see radiohead live for the first time !!! I was a little bit leery about In Rainbows after their last album (plus, i’m a big fan of Pablo Honey) but In Rainbows is a fantastic album !!!

  10. Nicole wrote:

    It is a great foundation on the Web for them to build on with future releases.

  11. health wrote:

    Its amazing that people realize and appreciate the value of an artist and paid even though they didn’t have to.

  12. MMORPG Runescape wrote:

    yeah i paid $5 the first time and then downloaded 2 times more for $1.00 each.

    Anyhow i like it

  13. Abigail - Forex Foru wrote:

    I think this way of music sharing is quite paying for itself. Usual intermediation of some record label only can cause to lose fan’s bearings. Without it fans can feel the direct connection with their idols enjoying the possibility to revel in music in itself purified from all the impurities. Sounding quite idealistic? Stolen pleasures are sweet, you know