Pretty much everyone knows that if you want to get Radiohead’s latest record you can either buy a luxury box for 40£, or download it from the web for as much as you’ld like to pay for it, from zero upwards.
Now the first figures are coming, and supposedly 68% downloaded it for free, while some 17% paid 1-4$, 6% paid 4-8, 12% paid 8-15$, and the remaining 4% paid more than 15$ (but Radiohead are denying these figures)
This sounded good enough for some people to call this experiment a failure, but the real news is not the 68% of (allegedly 1.2 million so far) people who got for free something that was out there for free.
The real news is that 32% that decided to pay the same thing that they could have for free, in the very same form, at the very same time, the very same way. Same music, same mp3 format, same time for downloading…
This is really the ultimate price discrimination.
If you look at other forms of price discrimination, the product is never quite the same. Take air travel: yes, you move from point A to point B leaving at the same time and landing at the same time, whether you travel business or economy. But the service, the food, the comfort of the sits, they’re very much different, because otherwise there would be no legitimation for the different pricing.
Radiohead’s “In Rainbows” is different, in a way that is very 2.0: the consumer is setting the rules, and this means that the producer has no need to legitimate the price. It’s all up to us, and some 400.000 people have responded by paying for something that the rational consumer from “first-year microeconomics course” would never consider paying for.
Final Burp: it’s an example of art stepping backwards in time from business to patronage, and sometimes stepping backwards is not necessarily a bad thing