If you were King

They’ve told you that in market economies, you really are King.

The internet has recently taken the concept of market economies and the adage of “consumer is King” – one step further.  Radiohead, the seminal brit-rock cum post-grunge post-rock band, has come up with a new album called In Rainbows and is releasing it first on the internet.

Hardly shocking these days, that a band should choose to release ”soft copies” of albums ahead of actual album drops, but what’s really got fans and non-fans alike buzzing is the fact that listeners can pay any amount they choose in order to download it off their website.

Aside : Afdlin Shauki, Malaysia’s own Jack Black – comedian and singer extraordinaire – tried this method of marketing his Fuuyo album, whereby he promised to send fans copies of his album in CD or cassette form and let them decide on how much to pay him.

What do you do when you’ve been given the power to set prices?

Using the Radiohead example, let’s examine four possible things you could choose to do.

A – Pay the price a similar album would cost. 
Never mind the fact that store prices already factor in many extra costs which are directly related to putting the album on CD store shelves (such as transportation costs to music stores/Apple, payments to distributors etc. which shouldn’t really come into play anymore since this particular marketing method cuts almost all third party involvement out of picture) and pay the exact amount the album download would cost if you had gotten it off an iTunes store or CD store. Doing this would mean you’re sending a message to Radiohead’s record company that you’re actually quite happy with the status quo way and price of purchasing music.

B – Pay more
If you really like the music, and feel it’s worth more than other albums out on market shelves, you can pay a premium over store prices. This will send a message that as King, you’re willing to recognise and reward value. Record companies are likely to be very happy with this outcome and may even spend more on bands that release music that induce such behaviour.

 C- Pay less
As King, you may be happy with the product, but feel that it’s not worth paying store prices for the album download. Taking this route, you may be considering the fact that (as mentioned in (A)) you’re still paying what the album is worth, but you’re stripping out the costs that were never incurred since third parties were not involved in getting the music to you. Or you may just pay less if you feel that, relative to other albums out there, you’re not getting your money’s worth.

D – Pay nothing
What’s interesting and sometimes exploited, is how you can even choose to pay zero dollars – ie: nothing – for the album download. In this case, assuming you’re still behaving rationally, either you think the music sucks and you’ve wasted your time or you’re just cash strapped and enjoying the option of getting a freebie. Whilst some may say fans who take advantage of this option are cheating or even stealing the band’s music, in reality, bands like Radiohead hardly see much of the money made from album sales. Fans who pay nothing for the album may still be good for Radiohead, if you take into consideration the fact that the downloads these fans consume, still count as “albums sold” and showcases the band’s overall influence in the music scene. Record companies may suffer some lost revenue, but what the band and gets in terms of word of mouth positive publicity may benefit them more than if fans miss out on buying the album altogether because they’re unable to purchase them conventionally.

If you are King and have purchased a product which allowed you to pay whatever you want, do consider your judgement carefully and as long as you’ve made a fair decision, you’ve earned the tagline – the “consumer is always right” – and you’ve truly earned your title of King.