Free of their contract with EMI, Radiohead released their album In Rainbows as a pay-what-you-want download in the fall of 2007. While the majority of fans decided to download the album for free, In Rainbows generated more money for the band than their previous album with their record label, Hail To The Thief. And that was even before it was eventually released as a physical album and subsequently taken offline as a pay-what-you-want download.
Although Radiohead wasn’t the first pioneer of pay-what-you-want downloads, the prominent band did seem to spur a movement for musicians all over the globe to attempt to make money based almost solely on the generosity of their listeners. Apparently, the success wasn’t enough for Radiohead, however, as the band decided to release their follow-up album, The King of Limbs, for a set price of $9 for the MP3 download.
With digital sales surpassing physical album purchases for the first time ever in 2011, and the SXSW festival in Austin, Texas wrapping up, Digital Trends reached out to some forward-thinking music professionals about where the industry is headed in 2012. Can pay-what-you-want downloads save an industry many say is failing due to out-of-date business practices?
Not always a yellow brick road
The pay-what-you-want model as proven to be an excellent way to raise money for charity through the gaming project Humble Bundle, and the idea of people deciding how much to contribute to a product is becoming something so trendy even a Williamsburg restaurant has tried adopting the system. But, as Radiohead’s shift in distribution may have signaled, banking on the goodwill of consumers may not be a sustainable practice for artists or record labels.
Several young entrepreneurs have attempted to provide independent music directly to fans, however, not all have survived. Patronism, for example, launched last year to some acclaim, providing a subscription based model where fans connect through an online portal with their favorite band, paying on average $10 a month for exclusive material. Currently though, the service is still in beta and hosts a seemingly small base of musicians who are relatively unknown.
The music aficionado website Daytrotter recently changed from a free-download system that was supported by advertisements, to a private and ad-free subscription model starting at $2 per month. According to a statement on the organization’s website, the costs of recording and distributing music for free could not be sustained by hosting ads. Whether or not the new subscription model will be enough for Daytrotter to continue recording and releasing music remains to be seen. Site founder Sean Moeller declined to talk about the financial success or failure of the new subscription program when reached for comment.
San-Francisco-based pay-what-you-want music service Kroogi (translated means “circles”) boasts over five hundred artists under its creative umbrella with a focus in Russia, and is looking to expand into South America and beyond. But according to the site’s founder Miro Sarbaev, only 20 percent of the music downloaded on the site is paid for by customers, and the average given to an album is only $3. Plus, 15 percent of any payments made to an artist through the website go to Kroogi for hosting the service.
Sarbaev says his startup hasn’t broke even yet, but that the company is “getting there,” and notes that it’s the musicians who make the extra effort to engage with listeners who see higher contributions.
No..I dont understand why U have to pay for a song,that they play for free on the radio…LOL
Lenny Kravitz and Lady Gaga. Two musicians that are putting on live shows. Also notice the price. Back in 1989 I saw the U2 rattle and Hum tour, with BB King. $20. 2011 U2 tour $180 nuff said.
I think if anything that the digital age is creating a new set of middle man. The old school middle mean need to get on board or get left behind. Everything is digital now. Bands don’t even need to drag all their gear around they can just stream everything and work from their own homes if set up properly. Though I think they would have to worry about other major record companies getting their secret sound and counter producing something similar and cutting the market. The first clones are always like that.
Digital everything means that the middle men in life are computer geeks. Or at least that’s what they used to call them. Now anyone worth their salt knows allot about computers. We used to think am fm wireless jacks for our guitars where cool, now we are jamming on line, running our own record labels and so on. And its like a lottery for some people as they get a big break when they go viral on you tube. Then someone with money who wants to make more money picks you up and your set. Thats when your songs get on movies, you get asked to play a role in movies, and so on. Thats when you become a product not a musician anymore. And thats how it works, some people have a monopoly over the market and if you want a piece of the pie you have to sign on the dotted line. Lets face it their is no shortage of broke musicians that can really play… I guess its the Iorn Law of Oligarchy my friend. Lol judging by intels new optic chip in 15 years you can down load the whole internet to your living room.
The revenue stream for artists were never meant to come from actual album sales… It was always meant to be from performances. Musicians have gotten spoiled over the years for being lazy. If they were good, and had a strong fan base, their shows would be sold out everywhere they go, and rake in the money. Instead of complaining about not getting enough for a few month worth of in-studio recordings. The music industry is really in for it. IMO, the only thing that can save it, is for all of the major record labels to go under. Because really, who needs them these days? All they are, are the middleman who take 50+% of the musicians profits and spread it around their fat-cat wallets. Ditch’em and watch music thrive again.
Hell no
I suggest that a new and more sophisticated version of Pay What You Want provides just the kind of “empowerment through technology,” “direct exchange between creator and consumer” and potential “to innovate new systems that promote sustainability” that you suggest.
This Fair Pay What You Want (FairPay) variation achieves sustainability through an ongoing dialog between the consumer and the creator (or the creator’s support service) based on value. Fairpay can provide a true win-win dialog between buyers and sellers.
FairPay is a participative pricing process that combines
…the user freedom of pay-what-you-want pricing, with
…feedback, accountability, and seller control of future offers
to make it fair to both buyers and sellers in a continuing relationship.
FairPay works through a very simple balancing dynamic:
1. Selectively offer to let the buyer set any price the buyer considers fair — after the sale (Fair Pay What You Want, post-sale).
2. Track that price and determine whether the seller agrees that is fair, and use that information to let the seller decide whether to make further offers of that kind to that buyer in the future.
This gives buyers a strong incentive to price fairly (based on known value) — and enables sellers
to limit their future exposure to those who do not. Fairpay is expecially suited to a platform service like CASH, that can track FairPay buyer pricing over many transactions, and offer ongoing value to incentivise buyers to price fairly.
(Setting PWYW prices after sale is an important improvement in itself, since it removes the need to discount for possible buyer remorse, and thus gets buyers to price with full knowledge of the value received.)
sorry for rambling, I just woke up.
Some Gyms I go to cant afford to put the Radio on. This is becuase they need a licence to play public radio and its really expensive because Artists are saying they need the money. What for? As if they dont get eneough as it is. They take keeping up with the Jonses to a new level.
it might work but not on a big scale to make them happy. I wonder though. The box offices have never been as great as they are today for Movies, a stated fact in the last few weeks, so whats the deal with whinging if sales have never been better. I think it would work now come to think of it because we wouldt have to waste time and mainly resources, especially when only rich people usually have the resources to command the law. We should make the rich people behind this bullshit put their money into something worthwhile, like maybe sponsoring some alternative musicians or some kind of other research and devleopment or even a charity. Imagine if they tried to stop tape players and the record button when we used to record our favourite tracks of the radio? Ha the Internet is closing a whole bunch of Merchant Shop Keepers down now anyway with all the online shopping so I think shops are really a thing of the past. Perhaps this is why we have such a resurgance in coffee shops and the restaruant buisness. Yo add me
Worked for radiohead
Yes and No, Yes it will work for artists, but No it will not feed the greedy middleman that the “industry” is based on
^ Are you a fucking moron?