In the latest of his Lefsetz Letters (not yet online) Bob Lefsetz touches on the strategy behind Radiohead’s
pay what you want album release:
How do acts establish a direct connection with their fanbase? How do they entice listeners to join their e-mail list, with authentic e-mail addresses? That’s the number one lesson of Radiohead’sIn Rainbows. Give away something desirable and you get the right to make contact with your fans thereafter. At MIDEM the co-manager of Radiohead said theIn Rainbowsrelease allowed the band to collect 3 million e-mail addresses, and ultimately play to 60,000 in San Francisco as opposed to 25,000 the previous time through. And isn’t live where it’s at?
Well, folks, I feel vindicated. As I previously wrote,
I think people are missing a crucial point about Radiohead’sname your own pricestrategy. It is not all about giving listeners what they want, namely DRM-free music that’s free (or nearly so); it is also about giving Radiohead something it apparently wants (and that it could not get working through a major label): deep information about its listener population beyond the hard-core fans (i.e., those who’ve already joined the Radiohead fan club), including in particular information about which listeners are good candidates for up-selling strategies aimed to move more Radiohead merchandise, tickets, and other Radiohead-related products and services.
This was at a time when Lefsetz (among others) was deriding Radiohead’s actions as
playing for tips, a notion I thought was particularly wrong-headed. I don’t claim to be any great expert on the music business, but I think I called this one exactly right.