Was Radiohead's "In Rainbows" business model a success?

Was Radiohead's "In Rainbows" business model a success?

On the 10th October 2007, Radiohead released their anticipated album online for free, or any price the user wanted to pay. They did this with no record label, and so kept all the profits. Even with people able to choose to pay nothing, the "In Rainbows" project still made Radiohead more money than they had made for the release of any other album. Radiohead's profits didn't just come from the later release of the CD, donations or the limited edition box set that was released on the same day as the download though, as most the profit came from the touring that Radiohead did later in 2008.

As success is mainly seen to be through the sales of the album, (although reception is also important), the main question is "did the business model pay off? The download site was up for 3 months, and during that time the album was downloaded 1,200,000 times. Wikipedia states that one third of the people who downloaded paid nothing for the download, and that the average paid was £4. If two thirds of 1,200,000 paid £4, then Radiohead made £3,200,000. The £40 box set was also bought by 100,000 people, which means that they made another £4,000,000 just for the box set. In total, Radiohead made a profit of £7,200,000 in a three month period without selling a commercial CD.

The CD was released on the 31st of December 2007, two and a half months after the release of the download and the box set, and were forced to sign with a record label to produce the CDs.

Thom Yorke claims to have released the album online in such an unorthadox manner was also because "every record for the last four—including my solo record—has been leaked. So the idea was like, we'll leak it, then." This claims that releaseing the album for any price was a move against piracy. However, in the first week of its initial release, the album was downloaded 500,000 times illegally using BitTorrent, so this part of the scheme was less successful. People may have done this to avoid giving an email that was required to download the album legally, or due to the relatively slow download speeds that plaged the site for the first few weeks.

Given the profits, asking the question "why would Radiohead let people choose what to pay" seems stupid, but then imagine that Radiohead had other plans for the scheme. If all Radiohead were after is the money, then consider that profit to be pocket change for them. Radiohead have a massive fan base, and releasing something to the public for free is always a good method of enlarging it further. That so many people downloaded the album illegally is also a good sign in this case, as it increases the amount of potential fans. In June of 2008, Radiohead started the "In Rainbows tour", which spanned across the globe. Given that there were likely over 50 concerts, with an average of _____ people going to each one. If each person paid the £42.50 fee for a ticket, then Radiohead made a further profit of ______. This figure dwarfs the profits from the sales of the album, and so it could be said that the business model was to attract the audience, and then later charge a larger audience far more than they would have paid for the stand-alone album. Due to this, I would have called the business model a complete success.


Now if only people would donate for my album...



http://en.wikipedia.org/wiki/In_Rainbows#Sales_and_chart_placings

http://www.gigwise.com/news/37670/exclusive-radiohead-sell-12million-copies-of-in-rainbows