This recent press release from comScore shows the number and distribution of downloads for Radiohead's new album - the one they released online in a 'pay what you want' method.
Worldwide, 62% of people downloaded the album for free, 38% payed for it. Of those who payed for it, the average amount 'given' was about $6USD ($8 in the US). This is pretty much what I expected and puts to bed the rumors that the average price across everyone was $8. The 1.2 million was actually the number of people who visited the site during the time it was released.
The distribution of the sums given was pretty much as expected as well. Most people payed between $8-$12 with only just under a third paying more than $12. The $12-$20 price bracket isn't broken out further, but I would guess most of it sits between $12-$14.
So what does all this prove? There are some fanciful reactions to it on the comScore page. One pundit (Michael Laskow) reckons it is the death of the industry as few bands have the tenure and history of label support Radiohead does and therefore, for them, giving away music is not viable. It's actually the opposite. Giving music away is the only way future bands will create a fan base. Jim Larrison of Adify thought few people would pay and those that did would only pay a few bucks. Jim doesn't know anything about consumers.
My take is that is proves one thing only - that given worldwide publicity and a stated experimental intention by one of the biggest bands in the world, fans will come to their aid and successfully average their collective intentions to produce what is seemingly an optimal average price - $8 feels like what an album should cost if you strip away all the overhead. It does not prove that if you do this again you will get the same result and it certainly doesn't usher in the start of a new business model.
If other bands start doing this and it becomes prevalent, the average cost of 'pay as much as you like' albums will trend towards zero. Fans are making a point at the moment. They want to believe themselves that there is intrinsic value in music and they are willing to pay for it. But at the moment they have but one choice - Radiohead. As more choices appear (if this model takes off), this will spread their goodwill thin - they will either give less to each band or give most to one and take from others.
This is not a viable business model for the music industry.
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