UCL in the News: Welcome to the Radiohead economy

Great moments in rock history and great moments in economics rarely coincide.

But they did on Oct. 10, when Radiohead sidestepped the record industry, not to mention the entire market economy, by releasing their new album, In Rainbows, on the Internet, allowing fans to download it for whatever price they wanted - including nothing at all. …

Estimates drawn from polling data and Internet traffic indicate that Radiohead made at least $2 million and perhaps more than $10 million from downloads during the first few weeks. …

But so far, economists don't understand much about what motivates people to make payments voluntarily - and those of us doing the paying don't understand it, either. …

In a gift economy, these interpersonal connections are all-important. Historical examples such as the potlatch ritual of the Haida have been limited to groups with a strong shared identity. Fiona Jordan [UCL Institute of Archaeology], an evolutionary anthropologist, speculates that in Radiohead's case, it is the music itself that creates this emotional bond, establishing a relationship that transcends traditional business mores. Fans pay for these downloads for the same reason they might give money to a religious group or a political candidate: because they believe that what the band is doing is for the public good. …

Ken Hunt, 'Globe and Mail' (Canada)