Bands Understand Relationship Marketing Better Than We Do

Matthew Creamer at Ad Age examines Radiohead’s bold “name your price for our new album” move.

The Radiohead news is a big reminder of the power of customer loyalty and how it extends even to crucial issues such as pricing. Other small-scale indicators also suggest that consumers, despite being depicted by record labels and movie studios as a thieving bunch of copyright violators, are willing to pay even when they don’t have to if they’re given some flexibility on price point and there’s a real relationship between consumer and content provider.
Exhibit A is Magnatune, a four-year-old download site for music by unsigned artists, which allows customers to pay between $5 and $18 for a record. The average price paid, a spokesman said in an e-mail, is between $8 and $9.
“Our customers report that they are willing to pay 20% over base cost because they know their money goes directly to support the artist and the company,” spokeswoman Teresa Marango said. “All Magnatune artists receive 50% of the sale price of each album or music licensing fee.”

About David Burn

I wrote my first ad for a political candidate when I was 17 years old. She won her race and I felt the seductive power of advertising for the first time. Today—after working for seven agencies in five states—I am now head of brand strategy and creative direction at Bonehook in Portland, Oregon.