Making Money by Giving It for Free: Radiohead's Pre-release Strategy for In Rainbows

Marc Bourreau, Pinar Dogan and Sounman Hong
Additional contact information
Pinar Dogan: Harvard University
Sounman Hong: Yonsei University

Working Paper Series from Harvard University, John F. Kennedy School of Government

Abstract: In 2007 a prominent British alternative-rock band, Radiohead, pre-released its album In Rainbows online, and asked their fans to "pick-their-own-price" (PYOP) for the digital download. The offer was available for three months, after which the band released and commercialized the album, both digitally and in CD. In this paper, we use weekly music sales data in the US between 2004-2012 to examine the effect of Radiohead's unorthodox strategy on the band's album sales. We find that Radiohead's PYOP offer had no effect on the subsequent CD sales. Interestingly, it yielded higher digital album sales compared to a traditional release. Our findings suggest the PYOP strategy generated higher sales revenues overall, even if one assumes no revenues were obtained directly from the PYOP channel. However, this "success story" does not readily apply to similar strategies adopted by other bands. We show that Nine Inch Nail's free provision of its new album, The Slip, resulted in lower revenues from the album's digital sales.

JEL-codes: L82 (search for similar items in EconPapers)
Date: 2014-07
New Economics Papers: this item is included in nep-cul and nep-mkt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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https://research.hks.harvard.edu/publications/work ... ?PubId=9439&type=WPN

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Journal Article: Making money by giving it for free: Radiohead’s pre-release strategy for In Rainbows (2015)
Working Paper: Making money by giving it for free: Radiohead’s pre-release strategy for In Rainbows (2015)
Working Paper: Making money by giving it for free: Radiohead's pre-release strategy for In Rainbows
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