Radiohead’s In Rainbows: A Look at Anti-Marketing in the Music Industry
Critically acclaimed British rock band Radiohead has just announced the release of their seventh album, In Rainbows. I am a huge Radiohead fan but what I really wanna talk about is the remarkable way they are launching their new record.
Radiohead is offering the entire album in through their website and fans can pay whatever amount they want to digitally download it.
This donation-style system is significant because of Radiohead’s reputation and the size of their fanbase, which easily reaches into the millions globally.
The band is able to do offer their songs in a DRM-free mp3 format because they don’t have a record label and hence own complete distribution rights over their music. This essentially bucks the industry trend of reliance on record companies and marketing teams to produce, commercialize and promote music records.
Time Magazine has a brief quote from Radiohead on their independent status:
Radiohead’s contract with EMI/Capitol expired after its last record, Hail to the Thief, was released in 2003; shortly before the band started writing new songs, singer Thom Yorke told TIME, “I like the people at our record company, but the time is at hand when you have to ask why anyone needs one. And, yes, it probably would give us some perverse pleasure to say ‘F___ you’ to this decaying business model.”
Fascinating. I was quite intrigued when I first read about Radiohead’s latest album at Boing Boing and I definitely think Radiohead has initiated something that may have some considerable repercussions for other musicians and record labels.
I also thought it was a great marketing strategy (intentional or not) and I thought I’ll just go into detail on why I think this is brilliant venture for both fans and the band.
It’s Not All About Money: Reaching Out to a Loyal Audience
Listening to your fans is one of the greatest ways to show that you appreciate their support. From the simple act of taking a song request on stage to lowering ticket prices for your audience across the board, there are many ways to reach out to fans and show them you care.
Cutting out the middlemen and selling directly to a target audience is something that rock bands have been doing for a long time. Many of you might have been to local indie rock shows and visited the merchandise table where you can often purchase the band’s self-produced CD albums and even a T-shirt or zine.
Radiohead revisits this familiar business model and throws it up online, simultaneously connecting with millions of fans. The simple act of letting their audience decide the value of a product (by determining the price) is a mighty way to show their generosity and commitment to art instead of just business.
Bob Lefsetz, an American music industry critic and consultant to major record labels talks about the importance of Radiohead’s actions:
It’s not like Radiohead’s living in a different world. But they’re playing by a different rule book. One that says the money flows from the music, that people have to believe in you, that you’ve got to treat them right.
This is big news. This says the major labels are fucked. Untrustworthy with a worthless business model. Radiohead doesn’t seem to care if the music is free. Not that they believe it will be. Because believers will give you ALL THEIR MONEY!
This is the industry’s worst nightmare. Superstar band, THE superstar band, forging ahead by its own wits. Proving that others can too. And they will.
Anti-Marketing Buzz: Radiohead and the Free Model
New album releases from major label bands or artists are often surrounded by a huge company orchestrated marketing campaign; Talk show performances, media interviews, new touring schedules, store autograph sessions and ad spreads in relevant traditional and online publications.
Why not just let your fans do all the talking? Distributing a much anticipated music album online and not setting a fixed price (“Its up to you”) is a gesture that generates buzz. It’s flippant. It’s casual. It’s a me-and-you relationship.
Take a look.
I’ve mentioned before that giving something away for free is a business model that never fails to work. Radiohead might not earn as much money for In Rainbows as their earlier albums but they do gain many other benefits like credibility, which are difficult to replicate through overt commercial marketing.
Alongside the digital download of their album, Radiohead is also selling a £40 box-set which consists of the CD album, vinyl records, additional songs as well as artwork and lyrics. Some of the hardcore fans will inevitably purchase the box-set, which will ship a month after the album is available for download.
The Telegraph suggests that Radiohead stands to gain a lot from this strategy:
Radiohead could even benefit from those who ignore the box set and choose to pay nothing to download the album from Radiohead’s online shop, where they will be required to register their details and therefore become targets for future marketing campaigns.
Free albums also drive demand for live tours, which translate to pound signs for the artists behind them.
A great example of this is Prince, who in July gave away his album 3121 for free in the UK through the Daily Mail. He subsequently announced 21 tour dates in London, all of which sold out.
In a world where marketers want you to pay top dollar to demonstrate your loyalty to an artist you favor, Radiohead is making a refreshing statement. They are going down a different path. Showing us it isn’t all about money.
Anti-Marketing Bypasses Obstacles to Massive Popularity
Music piracy and file sharing have been a cause of concern for the music industry since the advent of Napster, a popular file-sharing network in late 90s. Artists and musicians have dealt with this problem differently. Rock band Metallica sued Napster in 2000, which distanced them from fans and led to a major PR disaster for the band.
Image Credit: Interscope
Nine Inch Nails (pictured above) took a drastically different route. They streamed an entire album (Year Zero) for free on their website, willingly uploaded torrents of their new music, called their record company ‘thieves’ and publicly asked their concert audience to download their music for free instead of buying it from pirates.
Giving away something for free and interacting with the web-savvy fan community will help to sidestep piracy and file sharing issues. Why download a torrent when you can easily get it from the source? Why not support someone who understands your desire to share music?
Radiohead’s strategy of offering the album for next to nothing also deals the problem that comes with the leaking of major records online before they are released.
Matthew Solarski of Pitch Fork Media explains:
What Radiohead’s doing here is actually pretty cool. Rather than preface their new album’s release with the usual three months of press ballyhoo, only to have it leak at some random time before it comes out, they’ve kept it completely under wraps, then essentially gone and leaked it themselves.
What’s more, they’ve turned this into a moral question of sorts, by giving us the freedom to pay actual money for what amounts to an album leak. Only a band in Radiohead’s position could pull a trick like this. Well played, gentlemen.
Radiohead’s publicist has confirmed that a physical CD album will be probably released in January 2008, three months after the online launch of In Rainbows.
The physical quantity needed would be minimal, given that most fans would have purchased either the box set or entire album online. This low level of future demand makes it easy for Radiohead to manage distribution; they could possibly sign a short term distro-only deal with a smaller label or even sell through their own website.
Traditional Profit-Driven Marketing is a Dead End
The RIAA sees file sharing as mere copyright infringement but pundits fail to understand that file-sharers are music fans, first and foremost. Some of them are far more willing to support independent ventures if you understand or reach out to their community.
Unfortunately, bureaucratic major labels are profit driven. Like any other business, it focuses on making the biggest amount of net revenue and measures costs against potential profit. Don’t expect funding if you don’t have a track record of success. It’s not going to happen.
Street teams have long existed before it was co-opted by professional companies interested in the almighty dollar. Before it became a marketing theory to be applied on clients needing exposure. But it was always just a two-way relationship between two parties, the fans and the musician.
Marketing on the grassroots level is achievable by anyone without support from profit-driven record companies. How? By consulting and recruiting active fans in online communities. By building long term relationships at the expense of initial profits. There are other ways to generate income, apart from the sale of records.
The brand is always most important. American model and singer, Tila Tequila is a good example of someone who understands this perfectly. Tila became popular in the U.S. and eventually landed a record deal through active interaction on MySpace, the popular social networking website.
She gradually accumulated 2 million friends on MySpace and build a loyal following of supporters. Her profile has been viewed 73 million times, possibly making her the most visible and befriended person in the entire network.
It doesn’t hurt that the Myspace is the exact demographic she needs to support her musical or modeling ventures.
Image Credit: NGottwald
Rock band The Smashing Pumpkins released their Machina II album for free on the Internet by sending 25 physical copies of it to fans active in the online music community, with explicit instructions for re-distribution. It was then uploaded to the internet (download it here) and shared with other Pumpkin fans.
While the Pumpkins only did this because Virgin refused to release the album (due to poor sales figures for their previous album), this demonstrates that viable alternatives can and will work when you want to reach out and share your work.
Look beyond commercial side of all ventures and embrace your audience before everything else. Especially if you are someone who believes in the value of what you are offering to the entire world.
The Internet as Midas: Sharing Brings You Fame and Money
The growth of accelerated and shared communication channels are catalysts for globalization. Youtube has the ability to turn average folks into online celebrities, to be watched, followed and obsessed by tens of thousands across the globe. All you need is a webcam, an internet connection and a willingness to share.
Blogs and personal websites are similar. A simple blog post can disseminate an opinion that reaches millions over time, especially when others pick up and share it through links, recommendations and citations.
A singular opinion piece can spread throughout a lateral hierarchy of channels: Thousands of blogs, each reaching other bloggers and their own circle of readers. Never underestimate your own ability to share what you deem important.
What Radiohead has done isn’t completely original. Other bands and artists have offered their material for free through the web. The question is, can smaller and unknown bands or musicians do the same and achieve success?
Definitely. The strong file sharing community is itself an indication of the demand for free or donation-funded creativity. Social networks and citizen media abound; both can be easily leveraged for attention.
It’s so much easier when you are trying to share instead of sell.
Radiohead is a band that is very much respected and loved, so what they have done may send some real ripples throughout the recording industry. Will it change the way artists or marketers produce, promote and think about music?
I would really like to think so.
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Thanks Maki. Good post. I remember reading about a restaurant that had started using this model too: people could pay whatever they felt like for a meal. That restaurant got a lot of free press with this model (I don’t recall the name right now).
And in the long run, the restaurant’s revenue averaged out. Some people paid just a couple of dollars a meal. While a few paid more than they should for the same meal. And the majority paid what the meal would have cost them in another restaurant.
Most of your posts are very long but I always end up reading the rest of it. I’m not really a fan of long posts but your’s is an exception. I guess it’s because of your effective writing and great content.
Thanks for all the great posts. Cheerio!
This is a really interesting model, and I very much appreciate the in-depth writeup. I’m assembling different possible strategies for selling my ebook/book as I definitely don’t want to go the standard ‘buy it at this price’ model, and this raised another possibility.
I doubt it would ever be produced, but I’d love to see a report on album sales and profits for In Rainbows after all is said and done. It would be *really* interesting if they actually sell more albums this way. I suspect that it may end up being heard by more people than any other Radiohead album, at the very least.
This is a really interesting & well thought out piece; we wrote something similar yesterday following the decision of The Charlatans to release their next single & album for free online. They feel that it will drive further revenue not just in increased audiences at gigs (which seems to have been one of the primary reasons behind Prince’s decision [along with the bucket-load of cash the Mail gave him]), but also in soundtracks & licensing.
However, whilst there are obviously cases where bands have based their success on the models that you mention, it is also worth noting that most of the bands you quote can afford to give their music away, because they already built their fortunes on the back of the old record label model.
This doesn’t mean that I don’t think it can work for new bands, just that we shouldn’t get carried away when multi-millionaires such as Thom Yorke give away downloads; and it’s worth mentioning that the £40 box-set (that’s $80!) sold out on the first day.
Anti-marketing? I think it’s just clever marketing.
Dugg, and Stumbled. Awesome read.
Great post! A very good overview.
Another example of such anti-marketing I guess is UK band, The Charlatans. They are making their latest album free to download through radio station XFM. Their manager Alan McGee is also quoted as saying that the current business modeal is dead and he sees such things like this as the future business model.
The article is [URL="http://www.xfm.co.uk/Article.asp?b=news&id=485685"]here[/URL]
That post is great! Really detailed and an excellent overview.
I think what Radiohead are doing is very interesting and a great idea. The idea itself to me is almost as if Radiohead are asking the fans how much they think a new CD is worth, let alone a Radiohead CD.
Another example of anti-marketing are The Charlatans, who are releasing an album for free in conjuction with XFM, a UK radio station. Alan McGee, their manager, said that this is the future business model and that the old business model is ‘redundant’.
Great write up here Maki. While this might not bring in the same revenue/sales as past albums, you’re right in that it will establish credibility for the band. That said, it may gain them many new fans who in turn buy previous albums and use word of mouth to promote the band in general.
Interesting stuff. I’ve seen more artists doing this lately, plus a couple new startups (SellABand.com and Strayform.com) setting up shop to capitalize on this.
Indie labels should also be jumping for joy. Traditionally bands would build a following on an indie before being picked up by a major. If bands and indies can work together with more focus on the music rather than just the money, more indie labels and bands should have better options for creativity and moving music forward without concern for having “the hit single” that is required from majors.
This is going to be exciting.
Great piece Maki, but I would like to point out one thing. Artists don’t make much off of album sales anyway, at least when a label is involved.
So, if the average donation works out to about 30% of the regular album price, Radiohead is in the same place for profit. But the big money for the band is in concerts and merchandise.
Bloggers and online marketers can profit big time by sharing freely, but if you don’t have something to sell on the backend, you’ll never make any money. Advertising is not going to cut it in the vast majority of cases.
Great post Maki, and good comments.
Of course, it’s no longer about the music. The old business model is gone and its only bands like this that will survive the shake-down. Give away your core business, build a loyal following and make money on secondary activities: merchandising; live appearances; book-deals etc etc
Interestingly enough the revenue from CD / music sales might even out. Assuming they’re handling all the payment processing / boxed set shipping through 3rd party service providers, Radiohead will be getting a much larger chunk of the revenue than they would get from a CD sold through a major label.
Under the old label model you’d have to sell 10 times as many CDs to make the same amount of money. For most bands (especially indies) the real money comes from touring anyways so the music is a kind of loss-leader to get people to come to the live shows and buy merch.
I’m really excited by the sponsorship model as well. The sponsor wins because they get a kick ass freebie to reinforce loyalty with their consumers and the artist wins because he/she likely makes enough on the sponsorship to cover the cost of production and gets a substantial marketing push as well. Throw in a sponsored tour where the ticket prices are dirt cheap and you’ve got a huge audience in the making.
Very nice post Maki.
It’s funny I was thinking of this free model on the way home after some correspondant on the radio seemed to bemoan AOLs $450million dollar purchase of skype remarking that not many skype users had migrated to the pay for calls aspect of the service. The upshot being that whilst ‘free’ is good, people tend to like the whole ‘freeness’ aspect of it which from a perspective of looking to hook on to the freeloaders and get them to spend may not necessarily be the best course of action.
There is an interesting lack of paralells between the free model of Skype and that offered by Radiohead. One immediate one being the clear lack of fanbase and perhaps, good Karma on one side, versus a clear abundance on the other.
Perhaps this is related to a squirreling collective side of our nature that likes to collect and stack and hoard things for future tactile and strokability reasons. That nice box set or t-shirt might be looked at with fondness in years to come too, further enhancing the potential for an emotional connect.
Skypers on the other hand, especially the earlier adopters I suspect are more aligned with that smart web savvy set who found a way to talk to their friends for nothing. I suspect that a degree of them may have also used Limewire and Napster and any other number of hip things that opened something up and made it free. Perhaps it’s as simple an equation as free is very cool versus paying for it isn’t, unless (as in the case of our Karmic policing friends above) , you already have that cool factor in abundance.
Wow this was interesting! I just like their business ideas, They will make a killing with this new concept. Giving away your music, and asking the fan to set up the price. I know as far as I’m concerned there are some bands that are worth a lot more than $29.95 for one album, and I will willingly pay them more if I could. This is a true new online marketing strategy to promote your music.
LOVED THE ARTICLE!!
“This donation-style system is significant because of Radiohead’s reputation and the size of their fanbase, which easily reaches into the millions globally.”
And how did they get that fanbase to begin with? Wouldn’t happen to do with signing to a profit-driven record company?
There is indeed a middleman in this process —indirectly — and that is one’s ISP.
Anyway: Trying to share instead of sell?
Screw that noise! You make it sound as if these are mutually exclusive. I may as well only play for alone in my bedroom/dumpster since I still stay poor like I would be when I am “sharing”. At least by playing alone I’ll end up resenting other people much less because I won’t be constantly giving and giving without even getting a new pair of socks return.
The purpose of selling one’s work is to make a living. But what the standard of living is, depends on the individual. Record companies are organized to make the most money possible which means worldwide tours and distribution. Those who find their standard lower than than somethnig that large can try to agree to a different contract, or not sign at all. It’s pretentious to villify a process that is completely innocent —>
“They are going down a different path. Showing us it isn’t all about money.”
The only reason anyone thinks that is because mobs of people willingly buy music that certain other people do not approve of for whatever reason. If no one appreciated it on some level no one would buy it. Thus the value exists regardless of whether Mojo Magazine reviews a Britney Spears album postitively, or not.
When art becomes consistently “free”, all that reveals is that the artist doesn’t have very high standards for his work — or — is willing to self-immolate to make whatever futile point about the laws of economics.
@Ankesh,
Yes, I think I’ve actually eaten in one of these restaurants before. Unfortunately, it closed down within a few months. . It’s always risky to go this route when you have rent to pay. Still it might work with some nifty promo work.
@Skellie
I doubt they’ll put up a report on sales or profits but that would be something that would very interesting. It’ll definitely spread faster than the other albums, that’s for sure.
@Ciaran
I think the point of my article was mainly about connecting with the community and prioritizing relationships before anything else. Sure, Radiohead is already rich and has the reach to do something like this and pull it off.. but that doesn’t discount the effect it will have on fans and public perceptions.
Most of the music forums I visit regularly have long threads on how fans think this is an excellent move on their part. People are reacting positively.
Why anti-marketing instead clever marketing? Anti-marketing IS clever marketing but it is only clever because it purportedly goes against traditional marketing principles.
Did you see the launch announcement on Radiohead’s official site? Less than 50 words. Informal.
I used the term partially because of the other examples I listed in the article as well. NIN railed publicly against commercialism and advocated free open-source music.
Do this often enough and you’ll get people on your side. I’m sure you know how many times NIN has been on the Digg homepage because of what Trent Reznor has said.
This is anti-marketing in its most obvious form.
@Max
Thanks for the link about the Charlatans article
@Brian
Good point. There always has to be something that generates income. The cool thing about blogs and marketers is that the costs involved are quite low (hosting/production costs/domain etc.) so there’s a lot of leeway in determining how far you want to go with the Free model before you eventually monetize it one way or another.
@Rob
Great parallels with Skype. Skype is a great product and integration with larger commercial entities always tends to arouse caution, particularly if what they implement breaks the habits of others.
Keeping with the familiar and branding to attract new adopters are both important. Radiohead has a great back catalog and I think this provides them with a lot of leeway in branding. Note how they became more experimental with song structures after ‘Creep’ and The Bends gave them widespread fame and popularity.
In a sense, they are giving away In Rainbows because they have a safety net in place already.
@Anon$
You are completely missing the point with your comment. Nobody is denying that Radiohead has made their fortunes or built their fanbase on a record label that pushed them aggressively on both sides of the Atlantic. That is obvious to all.
What they are doing is only significant because of their reach and reputation among musicians and other fans. Other bands have done it before but never before was it practiced on such a massive scale.
Your point about ISP is just another self-evident statement that is irrelevant here.
No they aren’t mutually exclusive. I never said they were. And if you read the article carefully, you would see that I’m highlighting the sharing part as an anti-marketing strategy to build audience loyalty and emphasize credibility.
I specifically indicated that there are other ways to generate income instead of direct selling/commercial marketing.
If you’re out to make money from your music, more power to you. Find some way to set up an income source. Get a sponsor. Do local shows, wedding dinners or join another band on tour. Do whatever you want.
Sharing is just another pathway to get to the income level you desire.
Read the section on profit-driven marketing v.s. community-driven marketing again before commenting. You obviously want something to attack so badly that you’ve jumped on an article that talks about MARKETING STRATEGIES used in the music industry.
Why do you market? To generate income. Not directly from record sales, but yes. To make money.
Nobody is against artists making money or commercial music in general. I’m just saying that Radiohead’s actions are the culmination of a long weakening music industry that has fought vain struggles against piracy/filesharing and poor CD sales.
Time to look at another marketing strategy to reach audiences, I think.
That’s a sweeping statement that doesn’t make sense. So you’re saying that Radiohead doesn’t have very high standards for their work?
Ridiculous.
Musicians don’t self-immolate. They absorb costs because they truly care about their music and want it to be heard. Don’t denigrate them with your hypothesis.
Joni Mitchell played the street corners of Toronto for pennies or nothing. Seminal post-punk D.C. band, Fugazi refuses to play at shows with ticket prices above US$5 and they often play for free.
I could probably list dozens of musicians who have given free records away because they want to be heard or because they didn’t care either way.
This is a brilliant move by Radiohead. As such their music will be heard by millions of new fans. You can’t buy publicity like this. Case in point: I heard about this story on CNN while waiting for a flight at the Denver airport.
I’ve been a Radiohead fan for years and plan to download the album on the 10th. Will I grab it for free? Nope. I’ll gladly pay for their music because I value their artistry.
Absolutely brilliant. This is pretty much the start of a major revolution for bands and artists. It really says a lot when a band as huge as Radiohead is taking a step away from Record Labels and doing it on their own. 100% profit baby! It speaks even more volumes about the state of the industry’s dated methods of selling crap product to people that have been swallowing it for years. It’s time for change!
If everyone is on the playing field, who is in the audience? occasionally we’ll make a few good plays, and hopefully score, but it’s not certain.
Great article on the topic. Radiohead really stands to get back some major indie cred with this deal. I’m sure they’ll still make some nice cash when they pay for the bandwidth and all the tech overtime when their servers got toasted.
And yes the album is worth it;
House of Cards best cut or Reckoner.
Great article.
Even if it doesn’t really tackle the problem of getting your brand known in the first place, the Radiohead business model is promising, I agree.
BUT: Details matter, and execution matters, too.
And this is where I see Radiohead running into problems with their current campaign.
You shell out the average 5 to 10 Pounds for the digital download, wait for the suspiciously small zip file to reach your hard-drive, only to find that you get low quality mp3 files, lossily compressed at 160kbps. Hey, why didn’t they tell me before? I wouldn’t even have downloaded this material for free! Why didn’t I get proper audio files with a lossless compression method like FLAC?
In other terms: Why do “digital customers” get worse quality than customers who order the vinyl+CD box? This tactic is seriously undermining the business model.
Artists like this are completely fucked… It’s not about the money? In what way is it not? All of these artists are making millions from merch sales alone, and the album sales a bringing a pretty penny too. Nobody understands that while a smaller artist on an independent label, even the size of epitaph, can sometimes not expect to see much from their album release. NIN might not be seeing a large portion of their album sales, but they are seeing a lot more then anyone else, and its more then chump change.
Radio Head doesnt understand why record labels exist? This is so stupid. Its their own fault for signing to a label that is and has been known for little more then being only concerned with money. For small artists living in California or where ever working another job is part of the game. Bands cant afford production and manufacturing costs, marketing costs, etc. The independent labels buffer this financial damage and create less of a burden for the band. Digital piracy also affects independent labels and artists the worst, they don’t have the money to sustain themselves through increasing sales drops. So all of these small labels are dropping of the map slowly bit by bit. And labels like warner and universal have this crap load of money that they can sit on until all these small labels just disappear. Giving them more opportunity to make money.
Instead of pirating music to fight the major music industry conglomerates. How about you people stop listening to unoriginal crappy music… I mean when you listen to big music, thats usually what your feeding yourself…shit.
Terrible article. It’s all very well for Radiohead to give away an album now that they’ve built up a huge fanbase, but if other bands follow suit it’ll kill new music.
Record labels rely on cash cows like Radiohead to fund A&R departments taking gambles on unknown artists. Take away the Radiohead profit, and there’s less money to gamble with.
If you want to see a music scene where record labels haven’t got the money to take a risk and so only sign the latest ColdplayAthleteSnowPatrolKeaneEtc clones, then fantastic - but I certainly don’t.
I’m not entirely sure how the “anti-marketing” part fits into a good analysis of a group who are doing marketing.
“Anti-marketing” point 1 involve creating a product that consumer value enough to promote through their own word of mouth. That’s promotional mix components of publicity, PR and word of mouth. Hardly “anti-marketing” to be driving from the playbook
Point 2 of Anti-marketing is the control of the distribution channel, channel selection, and digital distribution as a precursor to physical product distribution. That’s the unloved fourth P of marketing - place (or the slightly hipper A in SIVA, or the delivery of value in AMA(2004)/AMA(2007) definitions of marketing.)
Again, using the marketing mix isn’t anti-marketing.
The article is great, but the anti-marketing label? It’s a touch misleading.
@Dr Stephen
I wouldn’t call it misleading. The points you made are correct and they are what Radiohead is doing. But the ‘anti-marketing’ label is used for a reason. Let me quote myself in a reply to another commenter.
“Why anti-marketing instead clever marketing? Anti-marketing IS clever marketing but it is only clever because it purportedly goes against traditional marketing principles.
Did you see the launch announcement on Radiohead’s official site? Less than 50 words. Informal.
I used the term partially because of the other examples I listed in the article as well. NIN railed publicly against commercialism and advocated free open-source music.
Play the anti-commercialism role often enough and you’ll get people and grassroot communities on your side. This is anti-marketing in its most obvious form.”
Of course, I see your points and agree with them. We might be just debating semantically.