Radiohead Effect

Name your price: that’s what the band Radiohead offered fans when they released their album “In Rainbows” online. Consumers got to decide how much they would pay for the album.

An ingenious bit of PR that paid off big for the band in terms of advertising.

Now a wine company has followed suit all in the name of marketing.

The marketing industry has been talking about performance-based compensation for years now. When The Republik signed performance-based contracts with its clients 6 years ago, we thought we were on the cutting edge. When Radiohead did it, I felt it was a fantastic PR stunt that would garner them press that would far outweigh their losses at the ticket office.

Now other products with significant overhead jump on the same bandwagon and put their entire existence in the hands of the consumers willingness to pay. Begs the question, is this risk worth the potential payoff?