Radiohead: Optional Pay Plan Worked ... For Them
December 20, 2007 at 6:43 AM (PT)
In a fascinating interview posted on WIRED.COM, RADIOHEAD's THOM YORKE, being questioned by TALKING HEADS mastermind DAVID BYRNE, deemed the band's pay-what-you-want experiment with the "In Rainbows" album a success, but only because of the success the band generated in the traditional music business paradigm. Nevertheless, YORKE and BYRNE both recognize the mentality that has long fueled the music business has changed ... and will never be the same.
The back story: Freed from their recording contract with EMI RECORDS, RADIOHEAD decided to release their new "album," "In Rainbows" on the Net, and let its fans pay whatever they wanted for the music. As it turned out, about a million people downloaded the "record," so to speak. Only about 40% of them paid for it, according to comScore, at $6 each -- half the normal CD sale price. That certainly wouldn't' be the kind of cash generator to fuel a major label, yet the band made nearly $3 million. What's more, since RADIOHEAD owns the master recording, it's able to license the album to TBD RECORDS /ATO RECORDS GROUP for traditional CD distribution. It hits U.S. retail on JANUARY 1st.
The only reason we could even get away with this ... is the fact that we've gone through the whole mill of the business in the first place ... It's not supposed to be a model for anything else.
What's now obvious -- which YORKE acknowledged -- was that the band was able to make this kind of money online because it has been a critical and huge cult favorite for 15 years -- and hadn't released new product for four years before "In Rainbows" was released. In other words, the band offered new music when there was a peak interest and demand in their new work.
It Works Because They Work
"The only reason we could even get away with this ... is the fact that we've gone through the whole mill of the business in the first place, " YORKE admitted. "It's not supposed to be a model for anything else. It was simply a response to a situation. We're out of contract. We have our own studio. We have this new server. What the hell else would we do? This was the obvious thing. But it only works for us because of where we are."
Make no mistake about it, though, RADIOHEAD is happy with the online response: "In terms of digital income, we've made more money out of this record than out of all the other RADIOHEAD albums put together, forever -- in terms of anything on the Net," he said. "And that's nuts. It's partly due to the fact that EMI wasn't giving us any money for digital sales. All the contracts signed in a certain era have none of that stuff."
When the physical CD is released in the new year, RADIOHEAD will rely on more conventional means of marketing and promotion. "It starts to get a bit more traditional," he said. "When we first came up with the idea, we weren't going to do a normal physical CD at all. But after a while it was like, well, that's just snobbery -- A) that's asking for trouble, and B) it's snobbery. So now they're talking about putting it on the radio and that sort of thing. I guess that's normal."
YORKE also revealed his relative lack of knowledge when it comes to traditional label promotion and marketing. "How does a record company get their hands on that?" he asked aloud. "It makes me think of the No Logo book where NAOMI KLEIN describes how the NIKE people would pay guys to get down with the kids on the street. I know for a fact that major record labels do the same thing. But no one has ever explained to me exactly how. I mean, do they lurk around in the discussion boards and post 'Have you heard the...'? Maybe they do.
"Then I was thinking about that JOHNNY CASH film, when CASH walks in and says, 'I want to do a live record in a prison,' and his label thinks he's bonkers. Yet at the same time, it was able to somehow understand what kids wanted and give it to him. Whereas now, I think there's a lack of understanding. It's not about who's ripping off whom, and it's not about legal injunctions, and it's not about DRM and all that sort of stuff. It's about whether the music affects you or not. And why would you worry about an artist or a company going after people copying their music if the music itself is not valued?"
When BYRNE asked if a new or up-and-coming band should try a pay-what-you-want online approach, YORKE replied, "Well, first and foremost, you don't sign a huge record contract that strips you of all your digital rights, so that when you do sell something on iTUNES you get absolutely zero. That would be the first priority. If you're an emerging artist, it must be frightening at the moment. Then again, I don't see a downside at all to big record companies not having access to new artists, because they have no idea what to do with them now anyway."
Read the entire discussion here.