In October, Radiohead released
TKOL RMX 1234567, a remix compilation of their latest
album The King of Limbs. Of all Radiohead's albums,
The King of Limbs "lent itself best to the remix
treatment" according to the band's drummer Phil Selway,
and so they asked world-class electronic musicians like Caribou,
Four Tet and Jamie XX to innovate with the music.
As lead singer Thom Yorke explained, "The remixes came out of us wanting
to experiment... I was really curious to see how the people I was
listening to so much would use what we gave them."
Remix compilations of course aren't
new. But most mainstream ones do not fundamentally alter the source
material, creating completely new products and opening new
markets.
The King of Limbs remix did.
By creating a product upon which other musicians could innovate,
Radiohead and its network of musical collaborators multiplied their
individual brand and market potential.
According to Don Tapscott and Anthony
Williams in their book Wikinomics, this networked
collaboration and co-creation is how value is generated in the new
economy. Otherwise known as the knowledge or information economy,
the new economy is powered by data, bits of information that gush
through global communication and information technology networks,
like oil to its industrial ancestor.
Value creators "remix" data, which is
to say they apply their own creative take on an existing product to
open new markets.
Pioneering companies create platforms
to enable this value creation. Alongside Radiohead, Tapscott and
Williams cite industry powerhouses like Proctor & Gamble,
IBM and Amazon as key practitioners. Apple and Google are two
more.
Few industries, of course, have been
more transformed by this "new economy" than the music industry. The
same peer-to-peer processes Tapscott and Williams champion in
Wikinomics turned the music industry upside down.
Radiohead was an early witness to its
power. In October 2000, their album Kid A debuted at
Number One on the US Billboard charts, where they'd previously
never even cracked the top-20. Though hotly anticipated, many
attributed Kid A's success to Napster, where tracks - and
later, the entire album - were leaked months
before the physical release, and downloaded and shared by millions
of users of the peer-to-peer site.
If Radiohead owed the success of
Kid A to this new economy, how else might it be used to
grow the band's brand?
Fast forward to 2007. Radiohead breaks
with their label EMI and stuns the music world by announcing that
their new album, In Rainbows, will be available
exclusively via download on the band's website.
No label, no extended splashy
promotion, no physical distribution.
But that's not all. Remarkably, the
band also says that users can pay what they want.
A recipe for bankruptcy? Not so. The
"experiment" makes more money for Radiohead than their
previous album Hail to the Thief. And that's before the
band releases a physical product: the album becomes the
best-selling vinyl of 2008. In the first year of release, three
million purchases are made in total, including 100,000 deluxe box
sets worth $80 each. The Financial Times called it "the
most significant album of the modern age" - three years after its release. The
Guardian said the moment "confirmed the death of the
music business".
Radiohead then partnered with
animation site aniBOOM, and challenged their community of creatives
to dream up storyboards for a music video using an In
Rainbows song. Over one thousand entrants competed, and
$10,000 was awarded to four winners to develop their full-length
music videos. On top of generating quality content - the band
couldn't choose a single winner and so chose four - the videos
generated millions of views across the web, thus extending the
band's footprint in a unique and innovative way.
Furthermore, they partnered with
Apple, and its Garageband product, to enable users to purchase
separate components (bass track, guitar track, etc) of one of
In Rainbows tracks, Nude, and encouraging
users to remix and upload their custom versions of the song.
The top-ten vote-getting remixes featured on the band's microsite,
generating exposure for submitting DJs. The initiative was so
popular - and, presumably, profitable - that the band rolled it out
to another song on In Rainbows (Reckoner).
Multiple content channels, content
crowd sourcing, multiple product offers and pricing, contests,
headline grabbing stunts, digital distribution ownership,
meaningful collaboration and co-creation to broaden the product's
reach - the tactics Radiohead have deployed read like a textbook to
marketing in the new economy.
But to think that any company or brand
can perform a few of these tricks and expect a windfall is to
ignore two critical factors of Radiohead's success: authenticity
and a consistent, high quality product.
Start with authenticity. It's
commonplace now in social media strategy and community management
to ensure a brand appears "authentic". Though highly subjective and
difficult to measure, authenticity can be thought of as some
combination of "living" a brand, "doing good", and product
focus.
Radiohead have always been a band with
a strong anti-corporate, anti-authority sentiment. Following the
release of Kid A, the band toured in a custom-made 10,000
capacity tent, free of corporate logos. Their music features lyrics
like "this one drops a payload, fodder for the animals, living
on an Animal Farm."
Instead of fighting piracy, they
embraced it. Their "honesty box" approach for In Rainbows
reflected a deep understanding and acceptance of industry - and
social - change. Piracy was happening, and the band had no control
over it. Indeed, many more people pirated than paid for the album.
However, by offering a "pay what you want" model, Radiohead was
respecting their fans by allowing them to determine the product's
value. In so doing, Radiohead were able to capture a greater share
of revenue than if it had been released in the standard way.
That Radiohead wasn't entirely
forthcoming in releasing the details of its experiment reflects two
very anti-corporate facts. First, it doesn't have shareholders to
report to. Secondly, and more importantly, Radiohead doesn't
communicate how much money it earns because it's not a value of
theirs or their fan base. All of this is "living the brand".
Authenticity also has a "give back"
quality, an element of doing "good". From contributing to the "Help" album to support
refugees of the Bosnian war in 1995, to recently donating a signed guitar for auction to raise
money for a four-year-old with a rare brain cancer, giving back has
been a key feature of Radiohead's work. This doing "good" helps
build trust and brand love, critical in the new economy.
Finally, Radiohead has always
understood that its core product is music. It hasn't waded in to
sponsorships or global politics like some of its contemporaries,
despite having comparable reach and influence. Maintaining a core
product focus has earned the band the license to experiment and
innovate with their product like no other musical act.
This singular focus on their core
product has also ensured that the quality standard has been
consistently high, whether in recordings, or, especially, in live
performances, where ubiquitous mobile connectivity can be fully
leveraged. Product quality and innovation not only generate buzz,
they protect brands against obsolescence and irrelevance, the key
causes of brand death in the new economy.
No matter the product or service, all
marketers face audiences that are connected and empowered, and
competitors exploring ways to leverage the tools of the new
economy.
The music industry may be more
conducive to experimentation and innovation, but every industry
faces disruption of some kind. Marketers looking for clues for
creating value in the new economy might adopt Thom Yorke's
embracing approach:
"I love that there is such a
culture of remixing at the moment, all this flow of ideas. It may
come outta the club scene but to me there is a lot more to it than
that… ideas and versions are not so fixed and set in stone, it
feels kind of healthy for music."
Healthy for business, too.
Think the "remix" culture is particular to the music
industry? Think again.
Microsoft once epitomized the closed
product innovation approach. However, now with its XBOX Kinect
product, it's come round to the realization that open innovation is
much more constructive. Until recently, they encouraged hacks of
Kinect for non-commercial purposes, which resulted in valuable medical applications, among other innovations. They're now taking
this to the next level, by developing a business incubator called
the Kinect Accelerator, and bankrolling start-ups
looking to deploy creative uses of the Kinect to create business
value.
Governments are also getting in on the
act, through the Open Data movement. The UK government has been
providing more and more government data through data.gov.uk, which
businesses are free to access and leverage to power their own
business operations. According to Rufus Pollock, co-founder of the Open
Knowledge Foundation, several hundred UK businesses have created
services using this public data.
Whether it's product or data
innovation, the real trick for businesses will be integrating this
open innovation approach in order to capture value and develop new
revenue streams.