When Radiohead decided to sell thier latest record on thier website instead of through the tradtional record company model, they did'nt just "stick it to the man" (in this case EMI), they also ventured into the brave new world of what I like to call Value Based Pricing. Basically it is a form of pricing where the consumer decides the price they are willing to pay for music. Radiohead allowed their fans to enter the price they wanted to pay for the new album. Now, most people would think, "that's crazy, everyone will just choose to get the album for free!". But from all reports, that isn't what happened. Sure, some people chose to get it for nothing, but a great number of people not only chose to pay for the album, but to pay a significant amount. And Radiohead took it even a step further by also selling box sets and other items that the consumer could add to their cart. Very smart. I don't think Radiohead will be going hungry any time soon. And they may have marked the official end of the old record company model. They showed a little faith in the consumer and they were richly rewarded.
But Radiohead is not the only pioneer in this field. Amiestreet.com takes this idea to another level. On Amiestreet, independent (and major) artists can upload their music to be downloaded by the consumer community like many other sites. But here is the catch. All songs start at a price of $.00 cents. As more and more people download the song it's price begins to climb. .5 cents, .13 cents, until it reaches a maximum of .99 cents. The idea is that the price or value raises by popularity. The market drives the price quite literally. If a song or album is truly popular, it will have a greater "value". What I like about this is that it is driven by the consumer, not by a corporate executive or entity. Let music fans decide what they want to hear and how much they are willing to pay. Now, does this mean that some people get the music for free? Yes it will. But if those people really like what they hear, they will tell a friend and perhaps even come back for more. They may even be willing to pay next time. In this model, artists get exposure and revenue potential at the same time. It also lets them know which of their songs are more marketable.
We may be seing the end of the old music business as we knew it. Welcome to what may be the new era. An era of freedom and empowerment of the artist and the consumer. Personally, I think I like this idea. In fact, I like it so much, I put my music up this way as well:
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