Radiohead is on to something by asking its fans for nothing

When British band Radiohead announced that it would make the digital version of its album available - before the physical version was released, and in a name-your-price scenario - many in the music and business press heralded the band as music's post-Napster poster child.

When British band Radiohead announced that it would make the digital version of its album available - before the physical version was released, and in a name-your-price scenario - many in the music and business press heralded the band as music's post-Napster poster child. The band could ostensibly cut out the middlemen distributors and retailers and reap nearly 100% profit on digital sales of its work.

But 100% profit from $0 doesn't sound as positive, so when a comScore report surfaced that more than half of US consumers decided to pay $0 (not including the $.90 handling fee), critics (and some fellow artists) lambasted the idea as furthering the "free music" mentality of today's youth, an attitude fomented by the birth of Napster.

That, proponents of Radiohead's strategy would say, is old-world thinking. Critics counter that the band - and its supporters - are blindly pushing forward without a definitive plan. For marketers, the lesson isn't necessarily rooted in how many (or how few) albums Radiohead sells. The takeaway is that the opportunity is there, in these curious times, to circumvent the norm and reach for some truly unique ROI.

Missing in most of the clamor about Radiohead's decision is the fact that - to download the album, consumers had to give the band their e-mail addresses and, more importantly, cell phone numbers. ComScore reported that 1.2 million people visited the site in the first 29 days and a significant percentage downloaded the album. Given the expectations for mobile marketing, Radiohead now likely possesses the most impressive propriety database owned by a band.

It may seem counterintuitive for a band to allow fans to access free music to get customer details, but bands are now thinking about long-term opportunities to try and lock in members of their fan base. This is especially vital given the seemingly endless supply of new bands and new materials hitting the streets each week.

Radiohead is merely acknowledging one of business's most core rules: it's much less costly to service existing clients than to acquire new customers. When the band eventually releases its special edition, physical manifestation of the album, it has all of those contact details to inform its fan base.

The impression embraced by a lion's share of today's younger consumers - evinced by mass protestations when popular music file-sharing site Oink was shut down - is that bands now view CDs merely as promotional tools to sell ringtones, concert tickets, and other merchandising ephemera. This unfortunately gives some consumers license to pay nothing for music - whether sanctioned by the band or not.

Radiohead - and other bands - could protest this mentality until their voices go hoarse, but it's unlikely to completely alter consumer sentiment. Radiohead has smartly realized that consumer change is glacial; its best shot is to maximize value while leaving it up to the RIAA and other concerns to figure out how to ensure proper remuneration for albums.

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