February 25, 2008
Digital Audio Insider

Another examination of the new music industry. 

The New Music Equation: Radiohead, Trent Reznor, Etc.

It seems that the business model of giving music away and relying on voluntary payments boils down to the following equation:
A x B x C = D

where

A = the total # of people who acquire the work

B = the percent who actually pay for it

C = the average amount each person pays

and

D = the total revenue received

 And then they examin it further than that.  I think that’s the thing about the new music machine, it’s not ABOUT a formula.  It’s being smart enough to know what works for you and your fans.  What works for Radiohead is different than what works any other big name band or even small ones.  Especially small ones.

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