This is fascinating. Radiohead has suddenly announced that their new album comes out… next week!
And much more interesting is their revenue model. Since they’ve been out of contract with EMI, it was I suppose, expected that they’d either re-sign with EMI or another label. But they’ve gone down a very different route.
As their website reveals, they’ve decided to release the album in two ways, either a £40 box set CD with an additional CD and two 12″ vinyl discs, or as a digital only download. And for the digital download, you can pay whatever you want. Clicking on the “?” sign next to a pair of £ and pence boxes, reveals “IT’S UP TO YOU.” Clicking on a further “?” reveals “NO REALLY, IT’S UP TO YOU.”
Seemingly you can pay anything from 1p upwards with a 45p service charge added, and you’ll get the album. Buying the boxset gets you a digital download too, since you won’t get your box until Dec 3 or so.
As Boing Boing rightly notes, this must be massively jarring for the music industry. The real cash that bands can make these days is in the touring. Where once singles were the loss-leaders to albums. Now albums become loss-leaders to drive concert ticket sales.
You can, of course, only get away with something like this if you’re already as big as Radiohead. And they did get big through the traditional record company route. But now they don’t feel that they need to be beholden to a record company to market an album.
We’ve already seen Prince give away his new album with The Mail on Sunday (and at his concerts) to promote his 21 date occupancy of the O2 in London. And yesterday the same newspaper was giving away what was effectively a Travis Greatest Hits CD (albeit including a number of live tracks along with studio versions) which included their latest single. Except the single, My Eyes, was released on 17 September, and seems to have entered the singles chart at number 60 yesterday. So it was a calculated gamble that now giving it away is unlikely to have impacted on a chart position. And in any case, single sales aren’t what Travis are likely to be worried about.
So where does this leave record companies? Well for a new band, they surely still need the marketing muscle of a record company behind them. Yes there are artists that arrive via internet buzz, but how many can be brought through that way? Who’s going to advertise new releases in the pages of NME and other music magazines? Who’s going to pay for pluggers to shop their wares around radio stations? Not every band is good mates with someone who can put together a top website/MySpace/Facebook/Bebo/whatever site for them. But you need this kind of backing if you’re serious about the industry. At least, you do at the moment…
But this is the beginning of a worrying trend? Record companies speculate to accumulate. And the accumulation part of that equation comes when the band hits the big time, and album releases regularly go platinum. But if an artist is out of contract, it reaches a point where it might be uneconomic to re-sign them anyway. I’m sure there have been instances of precisely that.
I don’t know the answers to all these questions. But I’ll certainly buy the download, and I might splash out on the boxset – I don’t know just at the moment.
[UPDATE] And now I note that The Charlatans are going to give their new album away free with Xfm (More here).
As the article notes:

[Alan] McGee said the decision to give away the album could create a “new business model” for the industry, after claiming the majority of revenue produced by artists came from tours, merchandise and synchronisation deals.
It doesn’t immediately appear the Xfm are paying The Charlatans to do this, just support the band:
McGee said: “We were really excited when Xfm got behind us and were as enthusiastic about the download as we are — they are the first people to embrace music for the people.
“The band will get paid by more people coming to gigs, buying merchandise, publishing and synch fees. I believe it’s the future business model.”
But the following is also a fair comment:
Kim Bayley, the director general of the Entertainment Retailers Association, which represents shops and online outlets that sell music, warned that the idea risked “narrowing the spectrum” of British music by denying new bands, who are unable to attract large live audiences, the chance to make money from selling their music.
“Music will become regarded as a throwaway item,” she said. “This model is fine if you are a band that has already made it but our worry as an association would be whether it takes away that ability of new bands to get their foot on the first rung of the ladder.”
It’s a lively time for the music industry.