In Rainbows.
It's an album title that sounds innocuous enough on paper.
And as it turns out, one end of that proverbial rainbow has likely led to a very real pot of gold for the members of the iconic British alt rock group Radiohead. For a music industry in freefall, however, the other end is anything but colorful.
On Oct. 10, Radiohead invited its considerable following to start legally downloading its highly anticipated seventh studio effort. The bombshell? Eager fans could pay whatever they felt like—including nothing—for the privilege. If the idea of a major band bypassing a music label entirely and distributing its tunes directly to fans wasn't frightening enough for an already spooked music industry, what happened next was the stuff of record execs' nightmares.
According to the Internet data clearinghouse comScore, 62% of those who downloaded the album around the world paid nada for it. Goose egg. Zero. Zilch. Of the 38% of fans who thought the band's latest was worth, well, something, the average payment was $6. Americans ponied up $8.05 on average; paying customers elsewhere contributed $4.64.
Radiohead has disputed the company's figures, labeling the tally "wholly inaccurate." What is undeniable, however, is that 1.2 million fans visited Radiohead's site in October alone, and industry analysts estimate that those visits netted the band somewhere between $3.8 and $10 million dollars.
Radiohead's revolutionary move has sparked a fierce debate in the industry. On one side are those who believe passionately in the real value of music, people who feel that Radiohead's choice has wrongly legitimized the idea of downloading tunes for free. On the other are those who are convinced that the movement toward free digital music distribution is a foregone conclusion.
The Yeas
It's a fascinating study in psychology, cultural change and business savvy to examine the responses to Radiohead's experiment. At the core of the marketing calculus shaping the band's decision is the increasingly common assumption that the real money in the music industry isn't going to be made in the music itself, but in touring and merchandising. For an established, global act such as Radiohead, the music becomes a loss leader of sorts to generate fan interest and drive ticket sales. R.E.M.'s manager Bertis Downs said of Radiohead's initiative, "This is the sort of model that people have been talking about doing, but this is the first time an act of this stature has stepped up and done it. ... They were a band that could go off the grid, and they did it."
Another significant force driving bands to deliver their music independently is a general disgust for traditional recording contracts that seem to limit artistic freedom and financial rewards. A few days after Radiohead's release of In Rainbows, Nine Inch Nails' creative force Trent Reznor hinted that he'll soon walk down the same path. He told fans, "I've waited a long time to be able to make the following announcement: As of right now Nine Inch Nails is a totally free agent, free of any recording contract with any label. ... It gives me great pleasure to be able to finally have a direct relationship with the audience as I see fit and appropriate. Look for some announcements in the near future regarding 2008."
Other artists, such as Oasis, Jamiroquai and Courtney Love, have also talked about adopting Radiohead's approach. Enough musicians are pondering this idea, in fact, that journalists are already talking about bands that "go Radiohead" or "pull a Radiohead." Love, ever the wild card, seems especially infatuated by the opportunity to rebel against the system. "The kamikaze pilot in me wants to do the same d--n thing. I'm grateful for Radiohead making the first move."
Beyond the impulse to stick it to the man, or even to regain creative and financial control, however, there is a growing sense that omnipresent illegal downloading has conditioned fans to expect music for free. Pali Research marketer Richard Greenfield says with matter-of-fact authority, "No matter how many people the RIAA sues, no matter how many times music executives point to the growth of digital music, we believe an increasing majority of worldwide consumers simply view recorded music as free."
The Nays
On the other side of the download, a chorus of industry insiders and musicians are shouting, "Not so fast!" The most common complaint is that only a band of Radiohead's stature has the capability to make the new model work. Mike McGuire of the technology consulting firm Gartner, Inc., sums up this argument: "People know who Radiohead are—there is a pent-up demand of people waiting for the next thing. Very few bands have that kind of loyal audience following."
The success of the band's first six albums, which have sold in excess of 36 million copies in the United States and Britain alone, obviously provided a comfortable cushion for this distribution experiment. British singer Lily Allen said of it, "They've got millions of pounds. It sends a weird message to younger bands who haven't done as well." Tool frontman Maynard James Keenan says of this advantage, "I love Radiohead. They're a great band, but I do think ... what they did is a one-trick pony in a way. 'Cause it might work for the publicity thing to allow people to download it, but it's very comfortable for them to be able to do that. They're going to make lots of money touring, and they've already made lots of money selling records."
Kiss bassist Gene Simmons, never at a loss for provocative points of view, bluntly questions Radiohead's sanity. "That's not a business model that works. I open a store and say, 'Come on in and pay whatever you want.' Are you on f---ing crack? Do you really believe that's a business model that works? ... [It's] the most stupid mistake anybody can make."
A Space Odyssey in the Wild West
The only thing that's certain in the music industry right now is that CD sales continue to slide and that legal, paid digital downloads aren't making up the difference. Big-box retailers have sold 17% fewer CDs thus far in 2007 compared to last year, while the industry as a whole is down 14% for the year.
In the face of those challenges, many artists are increasingly willing to consider unorthodox strategies to get their tunes in the hands—and ears—of fans. Even as Radiohead was giving away its music, Madonna was announcing her new $120 million deal with concert promoter Live Nation to distribute her future work and manage every aspect of her music career—never mind that the organization has never sold a single CD.
Likewise, iconic musicians Paul McCartney and Joni Mitchell—who combined represent 80 years of relationship with major labels—have both decided that exclusive distribution deals with coffee giant Starbucks best serve their needs. And who would have thought that the Eagles, paragons of anti-establishment rhetoric, would have ever chosen Wal-Mart as the lone physical outlet for their first new studio album in 28 years? Collective Soul's latest, meanwhile, is available only at Target.
Suffice it to say it's becoming a new Wild West when it comes to music distribution in the Internet age.
Or not. Ironically, after dropping the bomb that's still reverberating throughout the music world, Radiohead's most recent announcement was far more mundane. The band still plans to release In Rainbows the old-fashioned way: on CD (and vinyl!) via a traditional distributor on Jan. 1.
Moral Musical Chairs
Whatever else Radiohead's revolutionary release of In Rainbows has accomplished, it has likely muddied the waters even further when it comes to consumers' and musicians' perceptions of the worth of music. Radiohead frontman Thom Yorke himself admits that part of the band's motivation for their strategy was the inevitably of online leaks. "Every record that we have done for ages has been leaked," Yorke said. "Why not just leak the bloody thing yourself?"
There's no disputing that downloading—both legally and illegally—is a reality with which the music industry is still struggling to come to terms. And that for millions of younger users it's just a fact of life. The Recording Industry Association of America has filed 26,000 lawsuits against illegal downloaders since 2003. But between that year and 2006, the number of people sharing files grew from 5.5 million a month to 9.3 million. One anonymous college student on the receiving end of an RIAA legal threat summed up the attitudes of many when she commented, "[The RIAA] is going about this the wrong way. It's not stopping kids from downloading music. It's like skipping class: Everyone knows it's wrong, but everyone does it. I still buy CDs and concert tickets. It's not like I'm trying to cut down the industry."
Even among Christians, who might be expected to have stronger scruples when it comes to illegally sharing music files, the vast majority (86%) say they believe music piracy is either morally acceptable or not a moral issue at all. And that statistic, from Christian researcher George Barna, is already three years old.
Of Rainbows, Records and Atomic Bombs | Do You Download?
