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 head of brand strategy and creative at Bonehook in Portland, Oregon.