"Free as in free beer" is such a powerful impulse among us that even when something is offered free for voluntary payment, most people opt for not paying. Gee, where have I learned that in my public broadcasting career? The band, Radiohead, is the latest business to discover this as Nate Anderson writes:
Radiohead's innovative digital distribution arrangement for their new album, In Rainbows, lets people pay whatever they want for the music, including nothing at all. Despite that, BitTorrent swapping of the album has been on the level of other major releases. Are people really so cheap that they won't even register with the band in order to snag a free download? The answer appears to be yes. ...
... Once the album became available for download, though, it spilled immediately onto P2P networks, primarily BitTorrent. ...
Link: Ars Technica.
Of course, as Radiohead is discovering, that's not to say that the collective economic impact of those who choose to pay isn't a sufficiently compelling business model. Umair Haque calls this open pricing and points to this post in Valleywag (Radiohead estimates doom record labels):
... What nobody knew was whether fans would pay for a Radiohead album if they didn't have to. Certainly, the record labels had to be hoping they wouldn't. Too bad for the fat cats, because reports are that the average price paid for "In Rainbows" fell between $5 and $8. A low estimate of Radiohead's take in two days is $6 million. Sounds like bands with a following now have permission to skip labels.
Read Haque's analysis in Bubblegeneration, Research Note: Open Pricing and Revolutionizing Value Creation:
... open pricing is the most revolutionary innovation to hit the economy for a long time; how it will absolutely eviscerate massconomy business models; etc.
Also see his Research Note: Death of an Industry and Research Note: Why Radiohead Will Revolutionize Music, also in Bubblegeneration.
--Dennis (the Dennis who frequently fast-forwards his DVR through commercials to avoid "paying" for what he's watching, but who does contribute to public broadcasting).