For Radiohead, the gambit is an unqualified success: While true cheapskates could take the songs for free, anyone willing to pay at least a penny also ended up paying a 45 pence (91 cents U.S.) processing charge, so band will certainly cover costs, and is quite likely to make a significant profit (Two of our sources immediately ordered the $80 box set). The band will also sell old-fashioned CDs next year, and while demand for those will be much less now that most Radiohead fans already own the music, the band can still pocket some extra change from that. Most important: The band, who already does a great concert business, has received an incalculable amount of goodwill and free publicity for their next tour.
Contrary to the buzz of the last few weeks, however, this does not represent the end of the conventional music labels. The big music labels are in trouble, but not because Radiohead is giving its music away — they’re in trouble because they can’t sell CDs by artists who want to sell them.
The “give away your music, make it up on tour and merchandise” model only works for outliers in the music business. It works for bands with little or no profile, who aren’t giving up music sales to begin with. It also works for big, aging acts that have sold plenty of records in the past, but fewer in recent years. Pollstar’s list of top touring acts of 2006, for instance, was dominated by oldies whose CD-selling days are long behind them: The Rolling Stones, Barbara Streisand, Elton John, etc. Meanwhile, don’t forget that, to get to this stage, Radiohead received plenty of support — and money — from its former label EMI.
<Source Name=”Silicon Valley Insider“/>
