No doubt, there's mixed feelings – in the music industry – about Apple's (NASDAQ: AAPL) iTunes. Somehow, Steve Jobs finds ways to get most of the upside from business ventures.
But some musicians are getting creative. Take a look at Radiohead. The legendary band has a new twist; that is, if you want to get the new album (I'm not even sure it's called that anymore), you'll need to visit the band's website.
Oh, and the fans will be able to bid on the price of each track.
I interviewed Rafi Mohammed, a pricing expert, on the matter (he's the author of the Art of Pricing).
According to him:
"While the 'pay what you want' pricing strategy is novel for musicians, it is a fairly common pricing technique. For example, NPR and PBS use this pricing strategy with their annual pledge drives. In fact, Radiohead is taking little risk in this endeavor. Since the middlemen (music label, retailers) are cut out, the odds are that Radiohead will make more money from this strategy than if they had gone the traditional CD release route.
"That said, I believe the real story is that Radiohead's self publishing/distribution strategy is the tip of the iceberg to media company's worse nightmare. There are many alternatives for established content providers (musicians, writers, and even television shows) to bypass traditional media companies and instead, go into the publication/distribution business for themselves. Does John Grisham need to be published by Random House? Could HBO's Entourage television show be distributed on the Internet? The story of well known content providers abandoning traditional media companies is one that we are going to see again and again."
Tom Taulli is the author of various books, including The Complete M&A Handbook
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Reader Comments (Page 1 of 1)
10-04-2007 @ 11:00AM
AUGUST said...
Though I rarely agree with Rafi Mohammed, I think he's really on the mark about Artists cutting out the middlemen and that it is in fact, the "worst," nightmare for the corporate and executive side of the music industry.
In a stark irony, the media companies created most of their own horror story through 50+ years of taking and never giving back. To this day there are hundreds of financially and spirit broken musicians who made tens of millions for the labels, who in turn didn't give back enough in promotion, royalties, benefits or humanity to allow even a dignified retirement for these artistic giants, who created the very cash flow that made the industry possible.
I always say that bad karma will hunt you down like a dog... and so the industry that has historically beaten and bled musicians down to a vagrant existence is finally getting it "up side the head." Cheers!
Bravo to Radiohead and every other group that does an end run around this trashpile. Send a buck or two to an old player & your rise will be a proud one.
Thanks for listening,
AUGUST