Monday, October 01, 2007
Research Note: Why Radiohead Will Revolutionize Music
I'm gobsmacked by news that Radiohead is going to shift to open pricing for it's new album.
This is huge news. Let me explain why.
We've been tracking open pricing for some time now - it's a management and strategic innovation of the highest, most explosive, most radical kind.
In quite a bit of recent work, we've been pointing out to clients that it's a trend that is on the cusp of explosion...because it's gonna absolutely revolutionize the economics of music.
I can't fully tell you why now, for a serious lack of time. Note, no, it's got little or nothing to do with advertising - it's because of direct revenues based on simple economics.
I will discuss it in depth at my upcoming FOWA session, if you're around for that.
Suffice it to say that open pricing is a strategic solution which deeply, deeply dominates the economics of music.
And, of course, it's so utterly and fantastically alien to record label suits that the disruption must come from outside the skyscrapers.
Though it might seem minor, I cannot stress how important this is. If Radiohead gets the key components of the model right, they can bring a righteous smackdown to labels.
If you're thinking strategically about media, you might wanna spend some today thinking long and hard about just why open pricing - not free pricing, as shallower takes on the subject are arguing - is such a dominant solution.
To do that, though, you'll have to stop being a totalitarian beancounter for a while - and expand your strategic horizons beyond econ 101 (ie, free = zero value).
In fact, here's an interesting method of distribution you can use in your thinking.
Umair - your talk at FOWA was absolutely fantastic. If only you had longer. Brilliant.