October 23, 2007 | Tuesday
Radiohead’s lesson in online sales
By Jackie Danicki - Blogger in News |Online Sales
When Radiohead announced at the beginning of October that it would be selling its new album online and allowing customers to decide what to pay for it, the news made headlines.
It also made for very uncomfortable reading for nervous record company executives. The web as a distribution network has threatened to make record companies obsolete for a while now - and has led to the extinction of chains such as Tower Records - but Radiohead was the first major band to take such a bold step. Would fans download the album and stiff the band, or pony up what they thought it was worth?
Well, the numbers are in, and they should please any company that is selling online.
[I]n Rainbows has “sold” approximately 1.2 million copies as of October 12th. In comparison, that’s more albums sold in the first week than Radiohead’s last three releases combined. According to an Internet poll of 3,000 people, the average price paid for In Rainbows was $8. If these numbers are accurate, Radiohead has made close to $10 million in one week on this album alone.
Figures aside, the other interesting aspect of this story is how people chose to download the album. Despite being available for free on Radiohead’s own site, the required email registration - and site lag due to the large volume of downloads - seems to have pushed many to get it over peer-to-peer program BitTorrent instead. How many? More than half a million downloads of In Rainbows were conducted via BitTorrent in the first week the album was online.
Not every band is a Radiohead, and not every company is offering a blockbuster album to the Facebook generation. But no matter how niche your offering or how lacking in web savvy you think your customers are, there are lessons for companies trading online:
1) If you have a product that can be purchased online, there are potential customers out there who will buy it from you - if it is worthwhile to them.
2) Make it as easy as possible for potential customers to get the product directly from you. That extra step or required piece of personal information could be the barrier that sends them packing to another source.
3) Have a robust site that can handle heavy traffic.
4) Your middlemen may not like it if you offer your customers the opportunity to go around them, but their creaking business model is their problem to sort. Your profits are out there waiting for you.
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