New Album Release Strategy Evaluation

TO: Radiohead

FROM: Eva Ruiz

DATE: 8/30/07

SUBJECT: Release Strategy Evaluation

Radiohead is releasing their new album In Rainbows this upcoming October and is considering applying a new strategy that would break the industry standard. The proposed strategy would entail releasing the album exclusively as a digital download on Radiohead’s website and allows each fan to decide how much to pay for it. Even though you risk receiving possibly minimal profits, applying this new strategy better aligns with our goals to have your music reach as many people as possible and creates a substantial positive impact on the fan’s image of Radiohead.

With the music industry in worsening condition, you must do something different to receive different results. While many artists can’t risk making such unconventional strategies, Radiohead can. Radiohead has created a brand behind their band and has deep-rooted loyal fans. Being that this is their 7th album, all previously very successful, it establishes them in this industry; as band member Yorke stated, “You can say we’ve earned the privilege to do things our way.” Allowing the price to be determined by the fans gives Radiohead a more genuine brand image rather than looking for a quick buck. “Pick your own Price” encourages people who might have not initially purchased the album to listen at no cost. Thus, increasing Radiohead’s fan base and awareness.

To give us a rough estimate on the profits considering both strategies we will use Radiohead’s historical average first year sales of 695,000 albums. A traditional strategy where the artist only brings home 14% of the revenue will produce $9.7 million but after distribution, it only brings in a mere $1.4 million into Radiohead’s pockets. If we assume half of the fans would chose not to pay for the album, our new strategy will reap direct profits of $3.4 million^[1]. And that is only the beginning! The generous act of leaving it at “Pick Your Own Price” could motivate those who already were going to purchase to pay more than usual. Now that Radiohead is a self-produced artist receiving a higher profit margin, this is the perfect time to take a bold chance like this.