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    Radiohead Memo Case Analysis

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    sanchezeye
    This document summarizes and analyzes Radiohead's unconventional release of their 2007 album "In Rainbows". It notes that by self-releasing the album digitally and allowing fans to pay any price they wanted, Radiohead avoided sharing profits with a record label and had minimal distribution costs. While an unusual strategy, it had the benefits of attracting serious fans through higher-priced pre-orders and gaining new fans through low or free downloads who may purchase future albums. The strategy represented a significant change from the music industry standard model and could force the industry to transform business models and distribution strategies.

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    Attribution Non-Commercial (BY-NC)
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    Radiohead Memo Case Analysis

    Uploaded by

    sanchezeye
    502 views1 page
    This document summarizes and analyzes Radiohead's unconventional release of their 2007 album "In Rainbows". It notes that by self-releasing the album digitally and allowing fans to pay any price they wanted, Radiohead avoided sharing profits with a record label and had minimal distribution costs. While an unusual strategy, it had the benefits of attracting serious fans through higher-priced pre-orders and gaining new fans through low or free downloads who may purchase future albums. The strategy represented a significant change from the music industry standard model and could force the industry to transform business models and distribution strategies.

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    Radiohead Memo Case analysis

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    This document summarizes and analyzes Radiohead's unconventional release of their 2007 album "In Rainbows". It notes that by self-releasing the album digitally and allowing fans to pay any price they wanted, Radiohead avoided sharing profits with a record label and had minimal distribution costs. While an unusual strategy, it had the benefits of attracting serious fans through higher-priced pre-orders and gaining new fans through low or free downloads who may purchase future albums. The strategy represented a significant change from the music industry standard model and could force the industry to transform business models and distribution strategies.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    502 views1 page

    Radiohead Memo Case Analysis

    Uploaded by

    sanchezeye
    This document summarizes and analyzes Radiohead's unconventional release of their 2007 album "In Rainbows". It notes that by self-releasing the album digitally and allowing fans to pay any price they wanted, Radiohead avoided sharing profits with a record label and had minimal distribution costs. While an unusual strategy, it had the benefits of attracting serious fans through higher-priced pre-orders and gaining new fans through low or free downloads who may purchase future albums. The strategy represented a significant change from the music industry standard model and could force the industry to transform business models and distribution strategies.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 1

    Conclusion In my opinion, this was a good and innovative strategy that came out of the traditional model used

    used by major record


    companies. Radiohead did something unique and different that could bring it many benefits both musically and
    financially for the following reasons:
     By not being tied to a contract with a record label, I can infer that the band did not have to share
    profits with middlemen
     Costs for distribution channels would be minimal when using the Radiohead’s website
     Even people paying zero had to pay a service fee which I presume is sufficient to prevent them
    losing money on downloads
     By offering a $40 CD box edition pre-order, the band would attract the serious fan market with
    something more expensive than a typical CD offering, and pre-ordering allows it to size the
    production run so the band won't lose money

    Background Radiohead is an English rock band formed in 1985. It was one of the most popular and artistically significant
    contemporary bands of the late 20th and 21st centuries. Between 1993 and 2003 the band released six albums that
    earned it a huge success among its followers and a reputation for experimenting with unconventional album release
    tactics. By 2003, the contract with EMI ended and the band decided not to renew it. By 2005, the band began to
    record its seventh album In Rainbows, which was self-produced and self-released by Radiohead. Without a recording
    contract, the band was free to release its music when it wanted to and how it wanted to. By 2007, Radiohead’s
    website announced the release of In Rainbows, in unusual but attractive way. The album would be available
    exclusively through its website for digital download, but consumers would have the option to decide their own price
    for it.

    Case Issue The band Radiohead announced it would allow customers to decide how much to pay for its new album, released
    exclusively as a digital download and available only from the band's own web site. Was the plan a good idea? And
    how this strategy would impact the music industry?

    Analysis The strategy for the release of this album seems to be unprofitable but attractive for customers. The highly unusual
    plan represented a significant break from the industry standard of fixes prices for music (typically $0.99 for
    individual digital song and $9.99 or more for complete albums). However, by not including a percentage of profit for
    the record company, the product's price could drop substantially. Also, considering the popularity of the band, there
    were thousands of potential buyers who are willing to pay or get for a copy and the possibilities were:
     Setting price as low as possible even equals to zero dollar.
     Setting a price buyers consider “fair” value.
     Setting a price above the “fair” value.
    The first one would create profit in the future when potential buyers who have bought the album without paying any
    dollar are likely to buy the next album or recommend it to friends. If the second and third possibility happens the
    profits could be high. Also, lower price could mean higher profit because buyers will buy more of the product as a
    result of a low price.

    Take away The music industry is being forced to transform its business models and distribution strategies to sustain market share
    and create new revenue sources. The increase in digital content, number of new distribution channels– a result of
    rising Internet penetration, shifting demographics and changing consumption habits– is having a dramatic impact on
    the industry supply chain and the current structure appears inadequate. Industry players, therefore, should adjust their
    existing processes by adopting cost reduction initiatives and introducing new business strategies, as name your own
    price sale and digital distribution, to remain competitive.

    MEMO Re: Radiohead: Music at your own price

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