Radiohead Music At Your Own Price (A) Case Solution
($0.00 + $9.99)/ 2 = $4.99
By adding 90 cent to the estimated average price of consumers paying for album at pay what you want on their website result as:
$4.99 + 0.90 = $5.89
And then multiplying this value with the volume of sales from self-release via their website result as:
3,230,000 * $5.89 = $19,024,700 sales revenue
The resulted revenue of iTunes is high due to the ITunes’ number of buying transactions increased by 67 percent, while the dollar amount spent on each transaction increased by 10 percent. The report also shown that the number of individuals browsing the iTunes Store has also grown considerably. Therefore,the rate is given in the case that is 70% of the population iTunes users legally downloads online music shown increase in iTunes’ sales volume.
The sales volume of self-release is less than iTunes sales volume due to less number of consumers visiting their website due and small percentage of consumers paying for the album. Because the people who visit into the website are not “window shopper” and more than likely to convert to sales 100 percent verses people who use iTunes. Therefore, there is uncertainty of the self-price and self-release.
However, it is also because of very few Radio-head's album consumers who is paying full price of $9.99 such as fair people and Radio-head's fans, and many others were taking advantage of being Radio-head's super fan by paying zero dollar ($0.00) for the album and getting it free. 'Free' conveys the idea that the thing is of poorer quality and that you want to get rid of it as soon as possible. These negative views can have a significant effect on revenue. That’s why we took average of full price and zero price to calculate estimated paying of consumers for the album.
Conclusion
Radio-head have option to select either iTunes or Self-release via their website platform to release their album which can maximize the revenue and volume of the sales. The revenue from estimates total sales is more than $20 million which generated by multiplying price of Artists share from iTunes with number of sales volume on iTunes. The sales volume were taken from percentage given in the case of all legal online music download and the number of accounts using iTunes using for music downloading.
On contrast of iTunes, another platform the self-release via their website will generate revenue of greater than $19 million and less than 20 million. It is generated by multiplying volume of sales from self-release via website, which calculated by multiplying percentage of consumers buying album on the average price with total estimated number of visitors on their website, with sum of average price chosen by consumers at pay what you want and a service charge. Therefore, it is recommended to Radio-head that they should release their album via iTunes in order to receive more revenue and sales volumes as compare to self-release via their website..............................
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