Thursday, November 15, 2007

In Rainbows

So I read a story in Billboard about the Radiohead venture. The initial results to let people set their own price of the digital release of the new album In Rainbows are in. And it seems fairly successful. They had over a million people visit their site to download the album. According to the study 38% of those who downloaded the album paid an average of $6. So that's at least 380,000 people at $6 a pop of pure profit, which comes to at least $2.28M. Not a bad haul.

Unfortunately, 72% of the people who downloaded it paid nothing. So these types of percentages would probably only make it worthwhile for artists who expect at least a quarter of a million people to visit their websites and download the album. Even then if 38% of 250,000 people pay an average of $6 per album, that's about 94,000 people at $6 a pop or about $560,000. That's still a good haul. It beats the 10% of all album sales deals that a lot of artist currently with major labels or the $1 per album sold deal from iTunes.

But this new model probably won't work for most artists who sell less than 100,000 albums. The margins just aren't large enough. And it would amount to basically giving most of their albums away for free to people who likely won't end up paying to see them play live at some point.

But it does open up a lot of creative opportunities for artists who release a prolific amount of material over a give time period. The way the music business is set up, labels only want artists to release a new album every two years or so. That gives them enough to time to promote it and set up a tour and all that. But some artists have always wanted to go around that system.

The Beatles released a prolific 13 albums in 7 years from 1963-1970, not even counting all of their equivalent U.S. releases of albums originally released solely in the UK. That was a different time though. And if the Beatles had debuted in, say, the mid 1970's, the record label would have probably forced them to take more time between albums and do more touring and promotion for each album. With the more modern album release schedule, it would have probably taken the Beatles 20-25 years to release that many albums.

But with the Radiohead business model, or something similar, a band could have more freedom to release songs or albums on their schedule via their website. So in that way, this change in the music business could actually create an environment that resembles the Beatles' era, when artists would release many more albums in a shorter period of time. Or they would just release singles as soon as they had a few songs recorded, rather than wait for an entire album's worth of material to be written and recorded.

Paul Westerberg wrote most of the songs between 2000 and 2001 that ended up on his 5 albums worth of material that he released between April '02 and September '04. Using the Radiohead type of distribution model he easily could just posted all of those songs on his website in early 2002 and came up with his own compensation system.

Ryan Adams writes several albums worth of material every year. Some years he releases a lot of it and some years he doesn't. If he were to go to a business model like this, he could basically put the results of "recording sessions" instead of "albums" on his site and if people wanted to download it, they could. Or he could set something up where you could pay a flat rate and get to download as many of the 40 or 50 songs on there that you want and create your own albums out of the songs he posts.

Of course, this would kind of be the death knell for the album, if people just downloaded a bunch of songs that weren't technically an "album." But of course, iTunes and other file sharing sites have already been encouraging people to do this for several years now. This new model would just give the artists more control and more ability to buck the system.

As a fan, I still kind of like the concept of an album. I appreciate the value of an artist and/or producer doing some editing and shrinking the final output down to a manageable digestible number of their best songs. I still don't mind the fact I think it's a huge benefit at times. Ryan Adams and a few others could basically post groups of songs for sale as they record them, but I think it would lose something in the process.

The problem with releasing 60 songs at one time as opposed to 5 albums spread out over a 30 month period (or longer), in the example of Paul Westerberg's output, is that fans wouldn't really have an opportunity to digest all of those songs, if they were released at the same time. A lot of great songs would probably go under the radar. And then the artist just has too many new songs to tour behind. I like the idea of just having 12 or 14 new songs on each tour. Given how their career turned out, wouldn't it have been better if Guns N' Roses had edited down the Use Your Illusion double albums to release two pared-down albums - 1 in 1991 and another in say 1993? The way it turned out, they just basically released everything they had on the shelf, and then imploded a few years later.

And finally it was a little distressing that 72% of all downloaders paid $0 for the album. Since Napster became huge a little over 6 years ago and illegal file sharing became a big issue, the usual arguments made by people defending and justifying this activity could be boiled down to:

1) CDs cost too much and it wasn't worth it to have to pay $10 or $12 or $15 for a CD just to get 1 or 2 songs they wanted

2) almost all of the money fans pay just lines the pockets of the record companies anyway and their favorite artists hardly get any of it

3) therefore most artists make most of their money touring or selling merchandise, and

4) in the digital age, file sharing isn't going away, so the music business needs to adapt and embrace the new technology.

So, Radiohead embraces the new technology and makes their album available in a digital format on their website. They let the fans name their own price. They aren't affiliated with a label, so almost all of the money will go directly to them, minus the expenses it took to record the album and support the delivery of it over the website. So all of the rationalizations that people made for why they felt it was OK to download albums for free don't really apply in this case. And yet still, nearly 3/4 of all downloaders still refused to pay anything for it.

If that's the future, then I fail to see how you can have a music business 5 or 10 years from now. If the vast majority of fans place a value of zero dollars on their favorite band's album, how can most artists survive? An entire generation of people now have expectations of free music available on the Internet, legally or illegally. And there seems to be very little that can be done to change that mindset.

I guess we'll have to see what happens when Radiohead releases the CD version of In Rainbows in late December. Perhaps, a lot of the people who paid nothing to download it were just previewing the album and will then fork over the $10 or $12 for the CD version later this year, if they liked it. I doubt it, but we'll have to wait and see. Then we'll have the final chapter to this story about the new venture.

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