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5:59 am - Thursday December 8, 2016

Radiohead to release new album online – You name the price

| Economics | Rating: 4.5
by Numan

Radiohead has scheduled to release the band’s new album online on the 10Th of October. The album will be available for download here. The exciting and baffling part is for the first time the consumer will decide how much to pay for the right to download the songs. In my opinion this innovative initiative just might work.

In order to examine the economic feasibility of this initiative we need to examine it more closely. Radiohead’s initiative is literally changing the value chain in the music industry. There is little debate that the sales generated by this initiative will be considerably smaller. But there is more to the equation. By releasing their album directly online Radiohead actually gains the following:

1) Shortening the value chain to the customer and making record companies redundant in the process. The drop in sales has a good chance to be compensated by the direct payment from the customer to the band.

2) Creating a product in the form of a download able music file no longer a part of an entire album to be purchased as a whole.

3) Enjoying new potential markets such as contextual advertising, social networks and more.

It is an interesting experiment to watch.

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