This month, U2 released their brand new album “Songs of Innocence”, but they chose a less conventional way to do so. They are offering the album for free download on iTunes. Before U2 there was another band that made a similar move – Radiohead. Radiohead released their album, entitled “In Rainbows”, in October 2007. Instead of using usual marketing techniques, they decided to let fans choose the price they were willing to pay for the download. The “pick your own price” (PYOP) offer ended in December 2007. However, no one knows how much money Radiohead earned from this PYOP offer. The number of people who paid for the album download is also a mystery.
There have been specialists interested in investigating the effect of the PYOP offer done by Radiohead on the subsequent sales of their album in the USA. It was discovered that by introducing the PYOP offer, their album actually got higher digital sales through iTunes than thought before. There have also been bands in the past that did not have a similar success with giving out their albums for free download. Nine Inch Nails is one of these bands.
It is not clear how the PYOP method can surely generate direct revenues. It is not clear how much money do listeners pay for a download. However, even if all the listeners were to download the album for free, this PYOP offer can still have a positive impact on a band’s sales revenues.
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This phenomenon is quite interesting, since PYOP download is a good substitute for the digital album, distributed through traditional channels. If a fan downloads an album with the PYOP offer, chances are they will not be expected to purchase or download it again. This would imply less digital sales through traditional channels. The results however show the contrary. This unexpected effect can be attributed to the novelty and media coverage of the PYOP method. From the very beginning, it has been regarded as a very innovative strategy, and it received great media coverage. The results of such free advertisement must have diminished any possible negative effect of this offer.