Radiohead: Pricing is Designing

Radiohead

Are these six words the most revolutionary opening salvo in the fight over the future of digital music?

Radiohead, one of the superstar indie rock bands of the last two decades, has decided to offer its latest album at prices to be determined by consumers. You can order a premium boxed set for $81 or a standard CD to come next year, or pay just a single British penny if you’d like. No price floor or ceiling, or even guidance from the band.

What does this have to with design you might ask.

We easily classify work on, say, the cover of the album, the website, stage appearance and other brand related activities as being part of the overall design. Each of these design activities has direct consequence on the popularity and, ultimately, the income of the band. What an album cover looks like or the stage ambiance at a live concert has significant experiential impact on the band’s audience.

Yet the price of admission to such experience has perhaps more influence than any other (design) factor. It’d be extremely difficult to increase Radiohead’s fan base from, say, half a million to five million by any ‘classical’ design methods. Yet a pricing scheme such as the one Radiohead is experimenting with could do just that.

If you’re in charge of designing a product or service, you must consider all possible factors that add up to that most mystical interaction when customers come in contact with your product.

For example, iPhone’s pricing guarantees that it will not be used by several hundred million users as a short-lifespan, utilitarian gadget. That’s a signal to Jony Ive to take certain directions with the phone’s industrial design.

If you happen to be a web designer or an information architect at Wall Street Journal, nothing you can do will affect readership as much as the fact that much of WSJ’s content is hidden behind a premium price-wall. When the New York Times recently tore down its TimesSelect wall, it opened up enormous opportunities to its designers to come up with services that only make sense at much higher readership volumes, without access barriers.

I think this much is clear: pricing is designing. What’s not clear is, why don’t designers get a seat at the table where strategic decisions are made that then affect all other factors downstream? Why is pricing the sole domain of MBAs and accountants? Why aren’t more designers interested in pricing?

7 thoughts on “Radiohead: Pricing is Designing

  1. Pingback: Weirdsville: Pricing is Designing « counternotions

  2. Great explanation. I’d stick with the job title of EP, but your definition of strategic design is the first one I’ve seen that’s free of fluff and which doesn’t just expand on “design”. Thanks!

  3. Pingback: Apple Store strategy: “Position, permission, probe” « counternotions

  4. Fredrik: “I prefer the term Executive Producer because it doesn’t make design stick out like a nail that everyone wants to hammer down.”

    It’s funny you should say that, in my last two large consultancy projects my title was exactly that, Executive Producer. I picked it for that very reason too, as the client was a very old, conservative large company. While the title was EP, what I did was Strategic Design.

    The reason I stress Strategic Design is that it is both strategic and design-guided. The secret is what happens when the two are united. Design without strategy is ‘compartmentalized’ and ineffective. Strategy without design is bereft of emotion and attraction to move the user. It invites business to learn about design and designers about business.

  5. Thanks for the links. I read through more of your articles and found them both insightful and enjoyable.

    I remain skeptical of the term “Strategic Design” because I haven’t seen good examples of it. I remember a paper by Cecilie Schjerven, one of our lecturers at my design school in Oslo, that asked if design wasn’t actually “very important” rather than strategic. In that paper, she looked at how many designers tried, but failed, to get to the level where they could make the decisions themselves. Since the head-on approach didn’t work they tried to talk up the value of design to the point where it would displace something else (something “boring”, like distribution) and get them in the door. Schjerven argued that in a consumer economy where many alternatives were available, design was very important, but it wasn’t strategic.

    Having design present at the we-make-the-decisions-level is important but not the end-all. I prefer the term Executive Producer because it doesn’t make design stick out like a nail that everyone wants to hammer down. I’d like the executive producer to have a design background or at least a designer-y understanding of how you stuff.

    Skills such as abductive reasoning, prototyping, visualization, conceptualization, empathy and user testing would help make the things we’re offered every day less wasteful and more valuable.

    If I understand the division of tasks in the movie business, the executive producer manages a team of specialists and negotiates with stakeholders to create a solid piece of work. By many tastes, they rarely succeed but I suspect that their success rate is better than in the stuff-and-services sector. The movie business has from time to time been able to come up with new offerings that changed categories, changed minds or even changed the world a wee little bit.

    One of the things I love about great films is how they depart from some important assumptions of what movies are to create something powerful, memorable and successful. Love Story challenged the action-driven plot and made the movie less about what happened and more about how what happened felt like. The Godfather turned the clichéd mob movie into a story about a family on an otherworldly stage. It demanded an extra hour from its viewers – and got it – to tell the story more completely and richly than was assumed to be possible. Pulp Fiction challenged the notion of continuous time in cinema and juxtapositoned episodes, interlinked sequences and mashed the narrative into a puzzle that required deciphering by the viewer, to great delight and huge success.

    These three films departed from the ordinary. Their ideas came from many sources but it all boiled down to an Executive Producer who was convinced that this was the way to do it, that any other way would be wrong. The stuff-and-services world needs people like these, people who can spare us blandness and uninspired ordinariness.

    The original Walkman challenged how small a cassette player could be, and challenged our idea of where we could listen to music. iTunes reframed our notions of what music was. The iPod asked us to reconsider how much music was a lot of music.

    All three had executive producers who took a multitude of ideas, ordered them and gave them a common direction. They didn’t invent cassette players, mp3 player software or hard drives with audio file decoders but they cut away what wasn’t necessary, shaped what was left into a succinct concept, and steered that concept towards an iconic form.

    I think we agree that we need design-ish people up front. But we’ll probably not agree on their titles.

  6. Fredrik: “I actually think it’s pretty clear why designers don’t get a seat at the table where these decisions are made. They’re not good at it and they’re not fighting to get into those positions.”

    You’re absolutely right. In fact, I wrote a series of articles on this:

    Managing design vs. managing designers vs. managing business
    http://counternotions.com/2007/10/10/managing-design/

    The new managerial class: cure for design?
    http://counternotions.com/2007/10/13/cure-for-design/

    As you say, if designers want to have a say in this (and since pricing affects so much I can’t see how not), they need to come up to speed. That doesn’t mean they have to become accountants, but they must understand the ramifications therein.

    “Whose job is that? Does it even have a title?”

    I call it Strategic Design:

    Compartmentalized design: Designers emasculated
    http://counternotions.com/2007/10/15/designers-emasculated/

    I’ll be writing more on this later.

  7. I have two comments to what you suggest.

    First, let’s look at pricing itself. Pricing is a powerful component of an offering. Its structure and level affects how the offering is perceived and can drive adoption (or the lust for this) in a specific group. It can also be tuned to suit the capacity of the offerer: lower volumes but higher margins, a flexible pricing plan to bring the product to the right people/markets, and so on.

    The “design” of an offering might incorporate a well thought-out pricing strategy. It might well also include a distribution strategy, manufacturing strategy, service strategy, and so on.

    I actually think it’s pretty clear why designers don’t get a seat at the table where these decisions are made. They’re not good at it and they’re not fighting to get into those positions. I know didn’t learn anything about pricing strategies when I studied industrial design and interaction design. Many designers I know are interested in many fields besides design but they’ve simply not been exposed to pricing/financing/similar subjects and thus have little interest in it. Other designers I know have a hard enough time keeping their own finances in order.

    However, having designers work more closely with those doing the more abstract financial work could lead to interesting results. I’m aware of just a few cases of such cooperation, but they led to interesting things.

    Second, let’s just have a look at the idea that, if “everything is design”, then designers must be able to do everything. I don’t agree with that and I suppose you don’t either, but a lot of people seem to have become enamored with that idea. Where I work, each time we launch a service or make a product, it has been informed and affected by everyone who was involved. Everyone from the CEO to the engineer, the customers we asked, the legal team – everyone – brought some constraints and opportunities to the table.

    There is always – I daresay – the need for someone to craft some sense or holistic order into an offering and make sure it behaves as desired at all levels, from the first impression to the last use. Each part of an offering must make sense, behave sensibly and contribute to a sensible whole. Whose job is that? Does it even have a title?

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