Buying Radiohead vs. Van Halen’s Record Label

Way back in 1984, I skipped school to pick-up the new release “1984” from Van Halen. This is back when David Lee Roth was jumping around in tights and parachute pants were all the rage. I read everything I could find in magazines about the release. I was a band fan and follower.

In the end, I stood in line outside a record store for the doors to open. I gladly paid full price. I don’t think I had a clue of who the record producer was — I think it was Warner. It was all about the “brand.”

I contrast that with what Radiohead just did. Radiohead allowed me to pay them, not the record company, producers, channel distribution, and retailer. If this model works, Radiohead just turned the industry upside down and pocketed all the revenue. I received an email with a link and authorization code. The music came to me. It was great.

Like Dell, Radiohead’s brand has been leveraged to go direct to the customer. The big challenge to every organization and product company is to create a sustainable brand. The music industry and all artists in other industries have the opportunity to leverage the web for one-to-one marketing and sales.

Matthew Creamer at AdAge published a good read about this. They cite an example from Magnatune, where people are willing to pay more because they know the money will go to the band.

“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.”
– Teresa Marango, Magnatune spokesperson