Radiohead and the music industry

By Mark Guarino

If you currently own “In Rainbows,” the seventh album by Radiohead, it is very likely you are already a fan of the band.

Seems like a simple assumption but that was not necessarily the case following last week’s thunderstorm of blog chatter and media frenzy over the band’s decision to release the album as a digital download at a price set by their fans. Would the opportunity expand the British band’s already sizable fan base or just please those tech savvy fans who view it as just another innovation by a band known for being provocative?

After scanning dozens of blogs a week following the album’s Wednesday release, it appears to be the latter. There remain significant questions whether the band’s decision will create an entirely new paradigm to release music by blockbuster artists or is just a spiritual thank-you to loyal fans and a way to combat illegal file sharers at their own game. There is no process for which to track how many users downloaded the album, but it is fair to assume that only people already interested in Radiohead have taken advantage of the offer. Working outside the major label promotional system may not be the best way to attract new fans, but for a band like Radiohead that can boast having millions of fans across the world, expanding the circle may not matter.

“They are the first band of that magnitude who can do it. It’s kind of early in the process, but I’d say that it’s easier for bands with established following to be able to do things like this,” said Mark Hefflinger, editor of Digital Media Wire, an online news digest covering digital media.

Where “In Rainbows” is breaking ground is by bypassing the $.99/song price structure established by iTunes and other digital download services, and allowing fans to dictate the music’s monetary value. “I would say that any kind of pricing experiment would be a step I the right direction since the music industry has been really behind and the genie’s been out of the bottle for years now,” said Hefflinger.

Radiohead’s last album with parent company EMI Group was the 2003 album “Hail to the Thief,” which ended their contract obligations. Now a free agent, the band said it would release a conventional CD version of the band sometime next year and is already taking orders for a deluxe vinyl and CD packaging of the album to be shipped in early December. The edition would include eight extra songs — almost double of the current 10-song download version — and photographs not available with today’s digital download version.

Already there is evidence that last week’s download was more to promote sales of the old-fashioned CD next year, plus hype the band’s coming world tour. Audio purists are already complaining that the download is set at a bit rate speed of 160 kbps, which is considered weak compared to conventional bit rates of 320 kbps. Giving fans low-quality audio files may be an attempt to combat illegal file sharing services that require uploaded files set at a higher quality.

Soon after it was released, the band’s management told the UK press that they hoped fans would compensate the band fully and purchase the CD when it hits stores. “If we didn’t believe that when people hear the music they will want to buy the CD, then we wouldn’t do what we are doing,” said Bryce Edge of Courtyard Management to Music Week, a UK industry magazine.

That is what Chicago fan Marah Eakis, 26, plans to do. She paid $8 for “In Rainbows” but plans to shell out more money when the CD is in stores.

“I was excited when I woke up (last Wednesday). It was like Radiohead Christmas,” she said. She admits she would have downloaded it illegally, but since there’s an opportunity to pay, she’s happy to “give them a couple bucks.”

Promotion or not, Radiohead’s unconventional model of getting its music to the marketplace in a fan-friendly way is positioned against an industry that, since the days of Napster, has treated file sharing with contempt, creating years of bad publicity through a refusal to lower the price points of conventional CDs and encoding constrictive digital rights management technology and even spyware on CDs without consumer consent. The industry’s insistence to sue users continues to mar its reputation: Radiohead’s announcement to put fans in charge of pricing their music followed news reports a week earlier of a single mother in Minnesota found liable of copyright infringement and having to pay $9,250 apiece for 24 songs she shared online.

The result of such endeavors has not improved the industry’s health. U.S. album sales declined 5% in 2006, according to Nielsen SoundScan, but digital track sales were up 65%. Since consumers made 19.4% percent more music purchases that year, it is obvious that music remains a priority among consumers but they are purchasing less CDs and more digital music.

Already there is a movement underfoot of blockbuster artists — Nine Inch Nails, Prince — leaving record companies to either release music independently or brokering deals with specialty companies. Last week Madonna joined the club, giving concert promoters Live Nation the rights to her next three studio albums and right to promote concert tours, merchandise and licensing of her name in exchange for $120 million over ten years.

The fallout bodes well for artists, but may have a negative effect on independent labels that operate with lower overhead and known for doing a better job in supporting traditional retail stores and the artistic vision of bands.

“The hardest thing is reading in the blogs about ‘the big evil labels’. Which sucks because us, Sub Pop, Matador and all the bigger indies, we end up getting lost in the shuffle,” said Chad Nelson, project manager for Touch and Go Records, one of the country’s largest independent labels. “People assume record labels equal evil. But I feel like there’s always going to be a need at some level for a record label … because a band can make a great record, but if no one knows how to find it or wade through all the other stuff, how is it going to be heard?”

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