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Free is good

Here's an experiment to watch. Radiohead has announced that it will launch its new album, "In Rainbows", exclusively online and will allow buyers to set the price for the download. Radiohead will offer two options: a fully loaded box set for 40-pounds or a pay-what-you-please download version for listeners who just want the music. A survey by music website Idolator.com suggest some folks will be willing to pay, but perhaps no more than 10% of the asking price. This is one of those moves that is either hugely bold or astonishingly silly. That's why it will be fascinating to watch. It'll give a clue to whether or not there is any pricing power left in the music business. It'll also give marketers in other categories a clue to whether consumers can be persuaded to pay for content that they can get for free through other channels.

In a related event, clearly influenced by Radiohead's new strategy, the Financial Times announced yesterday that it will stop charging readers for access to its website. Readers will now be able to get up to 30 stories per month at no charge. This follows a similar move by the New York Times and an anticipated announcement from the WSJ.com. (Clearly all three have just caught onto to digg.com)

What do both events have in common? People like free stuff. Duh.

Can a name-your-price Ford Focus be far behind?
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Comments

Sam said…
David,
Here is a great article that expands on your "Free is good" idea. It goes on with giving away the cell phone free to sell the monthly plan or the video game system to sell the expensive games.
July 25, 2008 at 1:28 PM
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