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Case study: The Internet offers new approaches to music marketing

Radiohead attracted widespread interest in their use of the Internet. They used new technology in two ways. Firstly, they cut out the middle man (i.e. record companies and music retailers) to sell direct to fans. Secondly, they used technology in a novel pricing approach termed a reverse auction; an approach already used to a degree of success by Priceline. This is where the costumer decides how much they want to pay. Over 60 per cent of music fan interested Radiohead decided to download for free. As a one-off approach this attracted an enormous amount of publicity and probably served as q relatively low-cost sales promotion activity, which generated a huge amount of media interest. Many fans nominated an amount that ranged between zero and the "regular" download price. In addiction, a large number of premium "boxed" edition content was bought at £40. It is likely that there will be a large "pay off" as concert tours will have large audiences and the band has been introduced a new generation. In addition, many will buy their other music priced more conventionally.

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