Radiohead’s Publicity Stunt - Innovation or Deception?

December 25, 2007 · Filed Under Brand, Branding, Business, Business Model, Creativity, Innovation, Music

This month’s Wired Magazine features a David Byrne interview with Radiohead’s Thom Yorke to discuss Radiohead’s wildly successful ‘free’ downloading stunt.

Since others insist on keeping this topic fresh, I’ll continue providing the counterpoint. Is Radiohead responsible for innovating the music industry business model, or merely deceiving gullible fans?

First of all, let’s go back to when the news came out.

The album…is available in two versions via the band’s new, rainbow-y site: as a standard download or as a deluxe edition that comes with Rainbows on both CD and vinyl, plus a second disc of new songs and a lyric book. The deluxe edition runs £40 (about $81). The download version costs whatever you want it to, the price field left blank with only a pair of notes from the band — “It’s up to you” and “No, really. It’s up to you” — serving as a Jiminy Cricket to potential customers.

News of the free downloads offer spread through the online media and blogosphere like wildfire. Radiohead, newly sans record label, was “sticking it to the man.” Online pundits urged fans to “join the revolution.” Downloading began in earnest on October 10.

But it wasn’t long until fans started noticing something about their downloads - rather than being CD quality, they were actually extremely low quality MP3s. And lo and behold, Radiohead’s management soon had to make a statement:

Radiohead’s much-debated decision to let fans choose what they pay for its new album online is a promotional tactic to boost sales of compact discs, the band’s management said yesterday. “If we didn’t believe that when people hear the music they will want to buy the CD, then we wouldn’t do what we are doing,” Bryce Edge of Courtyard Management told Music Week, the UK’s industry magazine.

The realization of this, to put it mildly, pissed some folks off royally. Others with marketing savvy recognized what this was from the start. But overall, fan reaction can only be characterized as…mixed.

This in of itself should not be surprising - fans forgive the object of their adoration with remarkable speed. Were this not true, Michael Jackson would be destitute and Marion Barry wouldn’t have been a two time mayor of Washington, DC.

What I found curious was that, even after the cat was out of the bag, bloggers continued to laud Radiohead for their ‘new business model.’ I found this baffling. A marketing stunt based on deception does not an innovative business model make.

Now let’s turn to the Wired article. This exchange caught my eye:

Byrne: Are you making money on the download of In Rainbows?

Yorke: In terms of digital income, we’ve made more money out of this record than out of all the other Radiohead albums put together, forever — in terms of anything on the Net. And that’s nuts. It’s partly due to the fact that EMI wasn’t giving us any money for digital sales [emphasis added]. All the contracts signed in a certain era have none of that stuff.

Bingo - at last we see the inkling of a business model innovation. Radiohead’s management gambled that the marketing stunt would create an income stream that heretofore did not exist. And they succeeded wildly, to the tune of $3 million. That money goes right to Radiohead - no record label involved in the distribution.

And now that the CD is being released, not only has Radiohead been paid for a product they wouldn’t have been paid for before - they’ve greatly reduced the demand for downloading MP3s from the CD, either legally or illegally.

So in the end, what was it - innovation or deception? At this point I’m going to say 35% innovation, 65% deception. There’s nothing innovative about deception - it’s been a part of marketing for years.

But in this case Radiohead leveraged the trust and gullibility of a their fan base - an action that they won’t likely have to pay the consequences for, fans being fans and all.

And the big question remains to be answered - is this kind of ‘innovation’ sustainable? The next time around, if they know what the real story is, will fans willingly pay millions for low-quality downloads while waiting for the CD release?