In 2007 a prominent British alternative-rock band, Radiohead, pre-released its album In
Rainbows online, and asked their fans to "pick-their-own-price" (PYOP) for the digital download.
The offer was available for three months, after which the band released and commercialized
the album, both digitally and in CD. In this paper, we use weekly music sales data in the US
between 2004-2012 to examine the effect of Radiohead’s unorthodox strategy on the band’s album
sales. We find that Radiohead’s PYOP offer had no effect on the subsequent CD sales.
Interestingly, it yielded higher digital album sales compared to a traditional release. Our findings
suggest the PYOP strategy generated higher sales revenues overall, even if one assumes no
revenues were obtained directly from the PYOP channel. However, this “success story” does
not readily apply to similar strategies adopted by other bands. We show that Nine Inch Nail’s free provision of its new album, The Slip, resulted in lower revenues from the album’s digital
Bourreau, Marc, Pinar Dogan, and Sounman Hong. "Making Money by Giving It for Free: Radiohead’s Pre-Release Strategy for In Rainbows." HKS Faculty Research Working Paper Series RWP14-032, July 2014.