by on 21 October, 2007 - 13:47
by: Karl Long
So in the first week Radiohead’s album, In Rainbows, which they allowed customer to set their own prices 1 sells 1.2 million downloads and gets an average of $8 each. Next time I’ll just ask them to up the bitrate a little bit.
Funny to think of this in co-creation terms but guess what, it is. Radiohead just put their customers in charge of pricing, just like Ikea puts you in charge of logistics and assembly. Guess what, putting your customers in charge of pricing of goods where you have close to zero marginal costs is a very good idea. If saves you from making big errors in pricing, and as long as you sell enough to cover your sunk costs you will never lose money. And think of all the money you save through not having over-engineered DRM, not suing your customers, not spending money on anti piracy ads.
Oh, and when you don’t DRM your stuff, and don’t sue your customers they make amazing things for you like this 1 million key frame animation to Radiohead’s song Creep, it’s amazing (thanks Ze)
Original Post: http://experiencecurve.com/archives/radiohead-update-set-your-own-price-experiment-sells-12-million-albums-at-8-each
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Paul Beaumont says:
04 May 2008, 17:12
Iâve been thinking about this, and it seems a pretty sensible thing to do: so much so, I decided to do it myself. Though not with music, but software. I now sell software on my Pangea Enterprises website at whatever the customers wants to buy it for - and I still make money, so I think Radiohead had a pretty good idea!
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