defending the right to innovate
Monopoly corrupts. Absolute monopoly corrupts absolutely.
Copyright Notice: We don't think much of copyright, so you can do what you want with the content on this blog. Of course we are hungry for publicity, so we would be pleased if you avoided plagiarism and gave us credit for what we have written. We encourage you not to impose copyright restrictions on your "derivative" works, but we won't try to stop you. For the legally or statist minded, you can consider yourself subject to a Creative Commons Attribution License.
This article condemns Radiohead for ripping off consumers by allowing them to pay what they think is appropriate to download the group's new album. Apparently, some consumer might pay Radiohead money that should rightfully go to the major labels. Read this and laugh. "Will Radiohead leave fans high and dry? It may sound preposterous to accuse the British rockers of gouging their followers. The band is letting them decide how much to pay for a downloaded version of new album "In Rainbows." But early indications suggest that Radiohead's loyal followers are paying too much for the band's seventh disc." "According to a poll conducted by United Kingdom music magazine NME, the average fan appears to be willing to pay $10 for a digital copy. Now, that may not sound like a blow out. It's the going price for most records on Apple's iTunes. And that price, in turn, looks to be about right for a digitally downloaded album." "Consider the economics of the average CD. It retails for about $16 and costs about $6.40 to manufacture, distribute and sell in a store, research outfit Almighty Institute of Music Retail says. These costs are essentially zero when music is sold online. That's why iTunes can charge roughly $10 for a downloaded album." "Radiohead's fitter, happier approach slices out even more cost. The band pulled the ripcord on EMI, so it doesn't have to share profits or help pay the label's overhead. As a well-known band it's also able to take the knives out on marketing and promotion costs, cutting these by as much as two-thirds. Subtract these expenses and Radiohead may be able to distribute an album for as little as $3.40 a copy." "Now, fans may be delighted to pay $10 because they think the album is so good and Radiohead deserves the extra cash. But Radiohead prides itself on its anticorporate and anti-materialistic ethos. To avoid letting down fans, it might be more productive to adopt a no-surprises policy and fix a simple, fair charge for its record." Cyran, Robert, Rob Cox and Mike Verdi. 2007. "What Price a Download? Given the Option to Name Their Own Price for Album, Radiohead Fans Overspend." Wall Street Journal (3 October): p. C 14. link here
I solved the problem of how to enable fans (who all had a difference estimation of value) to determine the price of a CD years ago with www.digitalartauction.com.
Nothing wrong with being corporate or materialistic. The wrong is in being sociopathic.
If buyer and seller are undeceived, under no compulsion, and the market is free and fair, then whatever exchanges they make must be good.
[Comment at 10/04/2007 03:46 AM by Crosbie Fitch]
I hope at least an academic economist will get in touch with the band to get the sales data (or even better if the band make it public :).
[Comment at 10/04/2007 01:03 PM by Laurent GUERBY]
Most Recent Comments
Killing people with patents I'm not really commenting the post, but rather asking if this blog is going to make a comeback
at 01/09/2018 03:46 AM by Anonymous
The right to rub smooth using a hardened steel tool with ridges Finally got around to looking at the comments, sorry for delay... Replying to Stephan: I'm sorry
at 05/08/2015 08:35 AM by Dan Dobkin
Let's See: Pallas, Pan, Patents, Persephone, Perses, Poseidon, Prometheus... Seems like a kinda bizarre proposal to me. We just need to abolish the patent system, not replace
at 04/10/2015 10:44 AM by Stephan Kinsella
The right to rub smooth using a hardened steel tool with ridges I'm a bit confused by this--even if "hired to invent" went away, that would just change the default
at 04/10/2015 10:34 AM by Stephan Kinsella
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at 01/08/2015 08:58 PM by Sheogorath
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at 11/17/2014 04:48 AM by David K. Levine
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at 10/29/2014 10:49 AM by Alexander Baker
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at 09/20/2014 03:19 PM by Alexander Baker
WKRP In Cincinnati - Requiem For A Masterpiece P.S. The link to Amazon's WKRP product page:
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at 06/28/2014 10:00 AM by Doris
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at 04/07/2014 04:47 AM by Dan McCracken
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at 01/13/2014 06:13 AM by Anonymous
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at 11/28/2013 05:03 PM by Stephanie Smith
at 11/28/2013 09:23 AM by Anonymous
at 11/28/2013 09:22 AM by Anonymous
Patent Lawyers Who Don't Toe the Line Should Be Punished! Moreover "the single most destructive force to innovation is patents". We'd like to unite with you
at 11/24/2013 10:48 AM by SpaceCorp Technologies
at 11/20/2013 03:18 PM by Anonymous
Does the decline in total factor productivity explain the drop in innovation? So, if our patent system was "broken," TFP of durable goods should have dropped. Conversely, since
at 11/02/2013 08:09 PM by Anonymous
Does the decline in total factor productivity explain the drop in innovation? I wondered about TFP, because I had heard that TFP was increasing. Apparently, it depends on who
at 11/02/2013 08:08 PM by Anonymous