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So, One Week Later, Is The Album Dead Yet? |
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Last week, Radiohead released their latest album, In Rainbows, for free, asking fans to pay whatever they liked for the full length downloadable work. To me, the writing on the wall was clear. Radiohead wasn’t the first to give away their music, and they won’t be the last. I declared the era of free music to be upon us and the album as a saleable item dead. Many thought I was right.
A week later, the “sales” numbers for In Rainbows are starting to leak. By my calculations, Radiohead made out with a ton of money.
According to a source close to the band, In Rainbows has “sold” approximately 1.2 million copies as of October 12th. In comparison, that’s more albums sold in the first week than Radioheads’ last three releases combined. According to an Internet poll of 3,000 people, the average price paid for In Rainbows was $8. If these numbers are accurate, Radiohead has made close to $10 million in one week on this album alone.
Making $10 million on an album is incredible, especially because most of it is pure profit that goes directly to the band. After record labels take out advances, distribution costs, advertising costs, recording costs, and their cut, bands make anywhere between $1 and $2 a sale, depending on who you ask. So, if the average price paid for In Rainbows is in fact $8, Radiohead makes between four to eight times more per download than it did releasing through a major label. Not only that, but their music reached more people too. Considering that their only costs are recording and bandwidth (at maybe $500,000 and $1,000 respectively), this is not only a fantastic publicity machine for Radiohead, but a smart business decision as well.
While I believe the record industry is on its way out (having outlived its usefulness) and the era of the album, at least as a product that customers buy, is over, the objection is usually raised that what works for groups like Radiohead, Prince, and Nine Inch Nails doesn’t always work for the entire industry. These guys are superstars, while the vast majority of the industry is made up of working musicians selling way fewer albums and just getting by. How does the music-as-a-freebie model work for them, without the kind of name recognition that superstars capitalize on?
While this is a valid point, there are a few good counter arguments. For one, the cost of distribution today is extremely low. In the past the cost of pushing your music out to even a few thousand fans was astronomical by today’s standards. To get music out, bands had to take out print advertising, pay DJs to play their records, sign unfair distribution contracts, or tour and sell enough albums to reach some kind of critical mass.
Today, all a band needs to get music out is a MySpace page, a website, and an iTunes account. With tools such as YouTube, email, and the like, advertising has become almost costless and keeping in touch with existing fans has never been easier. On top of that, word-of-mouth marketing is a lot simpler to get going. Where once you had to hope fans physically copied your recordings and gave them to others to spread the word, today sharing mp3s is fast and easy.
Second, the freebie model might actually work for small musicians, or at least some of them. The San Francisco Chronicle has a huge list of successful yet non-superstar musicians who are giving away at least some music. Bands like the Eels, The Donnas, the Dropkick Murphys, The Pharcyde, and others all understand the forces at work. The reality is, few musicians ever made most of their money on albums anyway. There is a reason every decent band tours. That’s where the money is. A free single or free album is free advertising for your live show or your merchandise or your brand. Once you get to be as big as The Beatles, then you can stop touring like they did. Until then, why not give away the album and ask for donations?
If the numbers from In Rainbows are even close to accurate, Radiohead’s experiment not only paid off for them, but it showed the world that people are irrational beings and will essentially tip musicians for good music. So musicians, put out the tip jar, rock our world, and you will reap the rewards.
Very cool, don’t get me wrong, but you neglect to mention that to get to the position in which they are able to do this Radiohead has had 15 odd years of promotion by Capital Records.
Self-promotion goes a long way, but it won’t get you to their level of popularity - not by a long shot.
It should be interesting to see the record company spin on this one.
Not to discount the value of promotion from a major label but I think you may be discounting the talent of radiohead. I think it is safe to say that a band of their caliber would have been extremely popular with or without corporate promotion.
Great post. Checkout my review of the music industry at http://www.sourban.net/The-Future-Of-Music-How-Real-Artists-Will-Save- Music-From-The-Music-Industry
I love Radiohead, and they’re an exceptionally talented band, and have been exceptionally good at addressing the zeitgeist with each successive release. Nonetheless, I call bull shit on this statement. Brilliant music is passed up all the time because it’s not promoted. Not to mention the creative license to develop from a Rock Band into a Significant Experimental Music Force with the support of recording funds from Capitol.
No, maybe Radiohead would have been extremely popular with or without that particular label’s publicity dollar, but I am quite convinced that if not Capitol, another label would have participated in their popularity. And if not some label, or some significant source of venture capital, I don’t think, despite their brilliance, that we’d be discussing this band today.
Look, here’s the deal. Will a no-name band make $10 million on donations off one of their albums. No. Not going to happen.
But what small band needs $10 million to live well? If they make, say $100k, or even $30-40k that is a nice chunk of change. Supplement that with touring and you might even be able to live.
Certainly having a good product isn’t the only thing you need. You need to be lucky too, this is the music business after all. However, I do believe that a band with a good product, smart members, and a bit of luck could make this donation system work, even if nobody knows who they are. The evidence for that opinion is in the Chronicle list. Look at all those bands giving away music in some capacity. Not all of them are big. I’ve never even heard of most of them. Still, they see value in it.
You’re forgetting something here though. Radiohead already has a HUGE fan base. They built that base using the record companies and their promotional tools.
It’s only because of their previous success with the labels that allow them to now reap the benefits of direct distribution.
Until a band that nobody has ever heard of does this, and reaches the kind of numbers Radiohead is talking about, the music industry isn’t dead. They’re simply a stepping stone to get to the point where you can distribute your music directly.
Not that I’m happy to say this or anything. Sad but true.
People people, this is not true! Anyone can do this. Sure, not every band can make $10 million, but with a good product, I think even a no name can make real money off this. In today’s world, you don’t need the huge promotional budgets Radiohead has. If you’ve got something quality (and a little luck), you can build your own fan base for free. It actually happens.
I don’t think that a small band would be able to be even nearly this successful releasing only online. The fact of the matter is that a huge percentage of the american public buys their music on CD and from a store. The only reason that Radiohead and Nine Inch Nails are able to release their albums independently is because they’re already big names with millions of dollars and the ability to absorb the risk of new distribution models.
It would be very hard for a new band to break into the mainstream without major label promotion. And there aren’t many bands out there who are going to risk their years of hard work and all of their dreams on promotion via MySpace or Digg. All I know is, if I was in a band and I thought we had a chance to be big, I would at least think twice before risking our future on online sales. I guess if you truly “do it for the love of music” it doesn’t matter how you’re distributed. But if you have dreams of being a rock star, it’s a huge gamble that websites alone will put you in front of tens of thousands of screaming fans. I don’t think the major record labels are going anyway.
Many have made the argument that this wouldn’t have been possible if these bands weren’t already major label bands. However, if you look at the history of Nine Inch Nails, they started out on a record label, Tee Vee Toons, whose cash cow was compilations of TV Theme Show music. TVT was very pessimistic about the debut NIN album, gave it zero support. In response, NIN toured for years, and was going to release their follow-up (Broken) clandestinely following their success at the first Lollapalooza, when Interscope bought out NIN’s contract. The record was already 100% done. Essentially, the only thing the label’s been doing for NIN has been distribution, and occasionally screwing up packaging. As such, I think that the argument that ‘only major label bands’ get enough clout to pull this off isn’t necessarily true. I think that, had NIN not been on a label, they’d have done this a couple of years ago.
I’m sorry, but it’s utterly irresponsible to reccomend MySpace for new bands. No bands should be registerring there; there are *so* many better options available.
Wow, I can’t believe that no one here has commented on the real value proposition in what Radiohead has done. I, for one, was shocked to find the amount of personal information required when I went to download the album, and with nary a privacy statement in sight!
I did it, filled in the boxes, because I wanted discount music from a band that I like–and, hey, who doesn’t want to be part of this phenomena–but if my in box or mailbox suddenly starts filling up with extra marketing material, this is all going to feel a little less special.
There’s big money in this information–Mr. York & Co. have given us no indication of how they will use ours.
And I’ll add one more thing. . . everyone is pointing to Radiohead and NIN and others that are distributing music without a label as the death knell of the Record Industry, but perhaps the bigger indicator is what Madonna just did last week. I know, who gives a %$#*! about Madonna–but leaving Warner for concert promoter Live Nation says all we really need to know about where the money is for artists.
Interesting post. I think the cost of downloading 1.2 million full albums would be more than $1000, but I’m sure they’ve made tons of money nonetheless.
10 million bucks sounds great, but that is if EVERYONE paid something for the album. A sale is a sale whether for $0 or $8…so total sales can mean many different things. Great album.
Radiohead’s success with giving away this album has a lot to do with the fact that they’re one of the first mainstream bands to do so. The media has been all over this (not to mention that it’s the first record in years from one of the most innovative bands in the last decade) and will continue to be.
Be the first - get press, build awareness, sell records. Will the second band that decides to follow suit get the same press and the same sales? Maybe. But what about the third, the fourth and so on? I sincerely doubt it.
This notion of “free music” is ridiculous. Music is only “free” if you steal it. If your conscience is so seared that you can steal the work of another person and a company who made their investment, then you’ve got way more serious problems than the price you pay or don’t pay for music. I realize this kind of theft is rampant, but all your justifications are nothing more than that.
For the most part, you will only get what you pay for. If you want decent songwriters and performers, you will pay for them. You will buy track downloads, tickets (for whatever percentage of bands play live), merch, etc. If you don’t, those with any talent and a modicum of self-respect will go do something else with their lives…as most of them will want to have families, etc, and live a reasonable life. Massive ego and a need for validation will only carry someone along for so long. After that, they either go get a real job where someone is willing to compensate them for their contribution or some will become self-destructive and their art turns to crap anyway.
At some point, you all need to grow up and realize that something that has value to you (otherwise, why are you interested in it in the first place) is worth paying for. You want a better business model? Fine. You want the big labels to die? Fine. But quality music is NOT going to be free no matter how much you whine. Get over it.
I don’t know about you Chuck, but in my understanding, music doesn’t operate on a capitalist basis. I mean, think about it. We pay stars like Britney and Christina buckets of money, and they still make shitty music. I don’t think you get what you pay for. Money really has no bearing on how good the music is.
If these numbers are correct I’m am very exicted to see this and hope other bands follow suit.
This is why I was shocked when Metallica chose to sue their fans rather than think BIG and go down what seemed to be the inevitable highway to music distribution.
Well done Radiohead for having the guts to break out of “the good old days” and strike out into the future.
I totally agree that Radiohead’s album is one of the big steps in changing the industry.
but I have sort of a different view (at least I haven’t seen anyone take this view)…
I think that record labels will still be around. but the roles will be completely flipped. Right now, bands start out, do shows, get noticed, sign to an indie label. Then they “sell out” and sign to a major, where they become slaves to the corporate bottom line. Some bands/artists are able to balance that line and still make excellent music.
But NOW, I think the role of the label will be to develop and promote the bands while they’re forming their fanbase and sound. Then when the band finally gets big enough, they will be able to go INDEPENDENT. So the goal is to become big enough to where you can become indie, like Radiohead is, at least for the moment. And the record labels will serve as sort of a minor leagues. (I’m sure the greedy record labels will put up a fight to avoid this, but here’s to hoping their fall will be inevitable.)
All hypothetical crazy conjecture of course…
I explained this (sort of) better on my blog but I didn’t feel like just copy/pasting from there. But yeah…I’m not really sure how possible this is or if it even has validity. But hey, it seems possible to me!
Get over yourself. There’s lots of quality music out there for free. Huge amounts of great music - all free. Musicians should make music for the love of making music - not money, validation, fame or ego. Any artist making music for those reasons is a fraud. You mentioned “value”. The value of music surpasses the value of monetary compensation. Music is much more valuable. To put a dollar amount on music actually cheapens it.
Look around the internet some more and listen to the great music that’s available for free.
- Hamst3r
The Hamster Alliance
(Listen to THA Radio!)
Okay, that’s all great and idealistic and everything. But are we going to require all “artists” to get a second job? And maintain that second job while recording, writing, and touring?
Seriously…
Sorry, I screwed up with the quoting thing. Here is my second attempt:
Okay, that’s all great and idealistic and everything. But are we going to require all “artists†to get a second job? And maintain that second job while recording, writing, and touring?
Seriously…
No, but most will have to tour, and gig, and do studio work and such. They will have to work hard, just like everyone else.
Creative Commons is the FREE, Open Source for about 800+ artists and performers, heretofore unknown, who have released their works to the Internet under the ‘honor’ system. If you like, you pay, whatever you think they should be paid!
At least the artists really get the money! Normally, they get nothing, and have to perform their own concerts to make a dime!
Now you have downloaded Radiohead’s album, it is now to check out a collaboration Between Trent Reznor from Nine Inch Nails and Saul Williams (Hip Hop/Rap) and you can download the album for $5 or nothing.
http://niggytardust.com/
It is released on the 1st of November, just go to pre order. Read the story at NME http://www.nme.com/news/radiohead/32071
I really like the way Radiohead plays.. I loved their new cd! Have you seen when they covered The Smiths? The band sang The Headmaster Ritual in a webcast. Here is the video: weshow.com/us/p/23339/radiohead_the_headmaster_ritual_live
They are great aren’t they?
The funny thing is I just remembered about this article and realized that I bought the album just to support them when it came out, and I forgot I even had it. I need to get that sucker on my ipod immediately hehe. Laptop speakers don’t do it justice.
I sure hope more artists jump on board with this pricing scheme.. I feel way better about spending more money on an album when it’s my choice vs a store’s profit margin..