In Rainbows

Radiohead have experimented with business path which few marketers dare tread. Their new album In Rainbows has just been released in digital MP3 format online on their own site inrainbows.com. And here’s the thing - for a single download, it’s priced at whatever you wish to pay for it. You may even choose to download it for free, if you wish to.

The website also sells a discbox which contains the album on a CD, on two LP records plus the lyrics booklet and a specially designed artwork by Stanley Donwood. That’s priced at ₤40.

Radiohead is obviously betting on people paying something for the download – and given the digital format and the direct to consumer approach their costs are likely to be more modest allowing them to get better returns even on smaller amounts that people may pay. There may also be a fair number of people willing to pay ₤40 to hear the music in superior CD format with specially designed artworks etc.

There will also be other benefits – like more people hearing the album because it’s not expensive and thus better turnouts at concerts which are substantial money spinners.

Whether the whole thing turns out to be viable remains to be seen (it’s been reported that on the day of the release, 1.2 million copies on In Rainbows were sold as digital downloads). But trust the artists to try new business models even as established record labels watch transfixed like a deer in headlights.

Update: Social Networking news site Mashable reports that the Radiohead got an average of $8 per album. Just under $10 million within the first week is not bad revenues at all. Concerts and other paraphernalia not included