Radiohead

Do you think Radiohead's plan to allow fans to name their own price for the download version of In Rainbows is a good idea?  Why or why not?

When this question is being asked I think it also raises another question: “what outcome Radiohead would like to generate?” I believe that from Radiohead’s perspective they want more people to listen to their music if possible generating more sales could be the additional benefit. I think this is a good idea because it could let more people listen to their music and there is a big a chance that the sales wouldn’t decrease.

There are three groups: (1) The people would like to buy their album with lowest price (2) The people would pay the price close to the physical CD. (3) The people would pay more than the physical CD.

Since Radiohead had announced 6 albums their already have their royal fans. The average sales for each album were 1,333,333. For their last album there are 680,000 albums sold in first quarter. I believe those sales were made by the royal fans. From their last album we could see that more than an half of sales were made by those royal fans so I assume that those royal fans if they decide to download Radiohead’s new album online they would pay the price close to the physical CD or even more. Furthermore, if the buyers downloaded the music online Radiohead could save some costs, such as distribution, retail overhead, packaging and manufacturing, and retail profit compare with physical CD. Also they did the self-released for this album so the record company’s profit could be saved as well. Thus, their cost would be reduced down to 55% of original cost. If those royal fans switched to online download although they would pay less than physical CD price Radiohead could still gain more profits since the cost were reduced. There were 32% of buyers who are not their royal fans from last album’s sales number. If those people switch to online download they might pay with lowest price to get the album. However, I...