Reasonable returns from Radiohead experiment

Stephen Withers
Wednesday, 07 November 2007 01:52

Business IT - Technology

Excluding the freeloaders, the average price paid was $US6. There was a big difference between the US figure and that for the rest of the world: $US8.05 and $US4.64. comScore suggests this may be due to the higher disposable income of US consumers and the greater popularity of file sharing in other countries.

comScore gave no indication of whether its results allowed for the situation where people initially downloaded for free and then returned to pay after deciding they liked the album.

Since comScore did not reveal how many of the 1.2 million people it saw visiting the site during October actually downloaded the album ("a significant percentage" is meaningless in this context), we don't know how much revenue was garnered.

"It is important to note that Radiohead has single-handedly accomplished a milestone that the recording industry has failed to achieve – they've eliminated much of the profit attrition related to piracy or illegal copying," said comScore analyst Edward Hunter.

The big question is whether a band without a successful history with a record company could pull off something similar. If you exclude the occasional viral success, it seems unlikely. Small software developers have found that the shareware concept (try first, pay later if you like it) can work in terms of making a living, even though conversion rates are generally low.