Valentin's Blog

Radioheads decision to allow buyers to decide how much (if anything) they want to pay for their new album has lead to a flurry of interesting discussions on the future business model of the music industry. I think that there is a good chance that in the long run the price of music records will decrease dramatically and that artist will be making their money from limited editions, memorabilia and, above all, events (see this techcrunch article and the its comments for more).

This weeks time magazine adds another interesting tidbit to this discussion:

Even the most lucrative deals - the ones reserved for repeat, multiplatinum superstars - give artists less than 20% of the sales they generate, and that has to feed multiple band members. Meanwhile, as CD sales decline, the concert business is booming. In July, Prince, long underestimated for his business acumen, decided to turn his most valuable asset - a buzzed-about record - into a loss leader, flooding the U.K. with 3 million free copes of this Planet Earth CD through the Mail on Sunday newspaper. He was ridiculed for going down market, until he announced 21 London concert dates - and sold out every one at prices five times the suggested retail price of a CD. Not surprisingly, Radiohead has an extensive tour planned for 2008.

Update: Also read this later techcrunch article (and the comments, because there are some valid counter-arguments).

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