Question 6: Radiohead strategy

One more thing is that artists make most of their profits form concerts, not CD's. So if R-head makes right promotion, rumour around itself, more people will get to know their music and probably more of them will come to concerts. And this is the point right?

But I have no doubts that they made much more money from selling the music than they used to.

Actually they haven't done much money, but their concerts where full... so I think they have done money in the end... but not their producers or disk majors... that's why some people are complaining about this method: it helps artists to have a bigger share of the pie!

We can still take the example of NIN who was amazon top-seller during two week but the disk was free on their website...

Isn't that the point - the actual artists profiting more, not other managers/CEOs/advisors sucking on their work? How many of the positions in music business are created just for the sake of it?

If there weren't that many extra positions for lawyers and advisors etc. the CDs would be probably 30% cheaper! I would prefer this kind of situation, wouldn't you?

I think the most important factor that allowed them to do is because they have variable costs that's almost ZERO. As the article mentioned the strategy allowed them to create the BUZZ and to attract new listeners without deviating too much from how online music websites charge for their downloads.

Like many have mentioned already, digital goods have low variable cost, so the PWYW strategy worked well for RadioHead. Also, they were the first mover as mentioned by Manuel. Plus they were popular and had a large customer base, and this PWYW strategy got people talking about this offer, so people who were not fans also became first time customers. All these factors contributed to the success of this strategy.