Thursday, January 10, 2008

The Sound of a Brand New World - part one

(What follows is part one of a two-part essay examining the In Rainbows phenomenon, as posted in full on the Fingertips web site. The web site version has footnotes that further flesh out the subject at hand.)

So In Rainbows, the album distributed online in October in a pay-what-you-will fashion, showed up at number one on the sales charts in both the U.S. and the U.K. in the first week of January.

In the U.S., it added up to about 122,000 copies sold for the week, about one-quarter of which were purchased via iTunes. While the total is well below the 300,000 figure that the band's last CD, Hail to the Thief, sold in its first week back in 2003, it's safe to say that the difference was more than made up for if you add in the number of downloads sold and the number of special, high-priced "discboxes" the band sold during the pre-release promotional period.

And because of the direct nature of the download sales, plus the fairer-to-the-artist contract the band now has with Dave Matthews' ATO label, it's also safe to say Radiohead will be making much more money from In Rainbows than they did from any of their previous albums.

On top of that, the album is by all accounts (including mine) a musical success as well. Everybody wins!

So why isn't everyone smiling? Why, in fact, did the whole In Rainbows gambit make so many people kind of grumpy?

As the story played out over these past few months, Radiohead was repeatedly taken to task for their bold and unexpected move. Both big-label honchos and workaday independent musicians--two groups which don't normally see eye to eye--were often united in slamming the band for releasing In Rainbows electronically and allowing consumers to pay anything they wanted for it, including nothing at all.

The record company criticism was of course unsurprising. "Radiohead tried to spin this as offering a service for fans," said one unnamed source from a major label quoted in the Times (U.K.), "but it was nothing more than a marketing ploy to make themselves relevant again and prepare for their next release."

We've come to expect short-sighted foolishness from record company officials, but what was with all the grumbling from independent musicians on the matter? One such musician, in an "open letter to Thom Yorke" published in Philadelphia Weekly in early December, summed up his gripe this way:

"I can't tell you how many MySpace messages I've gotten in the past couple weeks asking, 'Radiohead gave away their new album for free. Why can't you?'" And his answer:

"Because it's what I do for a living."

But Radiohead does it for a living too. The smarter answer to the MySpace hordes would be to correct their mistaken idea that Radiohead was "giving away" their "album" for "free." This conjures a false image of stacks of In Rainbows on a table at a concert, with the sign "Free! Take One!"

Radiohead did not give away their album for free. What Radiohead did was offer the electronic files in advance of the CD release, and didn't require you to pay for them although you were certainly encouraged to.

Our independent musician/writer goes on in his essay to state his distress at the idea that Radiohead might start a trend, and that so-called "rich bands" who can afford to let people pay or not pay for their albums would make it even harder than it already is for struggling bands who rely on CD sales for some of their very hard-earned income.

This argument is understandable but simplistic, and makes the mistake in logic of presuming the inevitability of a not-inevitable circumstance--namely, that in the future, no one will pay for CDs.

This presumption appears premature in the face of the goodly number of people who actually went out and bought the physical In Rainbows CD.

That the album turned up at number one on the chart in its first official week of release renders all the hubbub about who did or didn't pay for the pre-release download even more ridiculous than it already was--and it already was pretty ridiculous.

You see, we never really found out how many people actually paid for the original download, and, if they paid, what they paid. Radiohead refused to satisfy inquiring minds on the matter, and did not release any statistics.

That didn't stop an online consumer research company called comScore from stepping into the vacuum in early November with a press release claiming to be "a study of online sales of In Rainbows." The results were widely and forcefully reported. The idea--as put forth in the report--that 62 percent of people downloading the album did not pay for it rapidly became the de facto truth.

Such was the meme-like power of this 62 percent figure that Radiohead's own statement on the matter--they called comScore report calling it "purely speculative" and "wholly inaccurate"--didn't make a dent in the coverage. The 62 percent might as well have come straight from the notarized spreadsheet of Radiohead's bookkeeper.

Our aforementioned writer/musician in Philadelphia launched his "letter" off the veracity of the report, saying at the outset, "We now know about 60 percent of the people who bothered to download it did so for nothing."

The 62 percent figure was, perversely, used to malign Radiohead both coming and going. There were those who scoffed at how many people apparently just took the album for free--an interpretation prodded along by the title of the comScore press release: "For Radiohead Fans, Does 'Free' + 'Download' = 'Freeload'?"

Simultaneously came an assault from economists, as reported in the New York Times, among other places, who scoffed at people who paid for something that they didn't actually have to--behavior that will forever elude the unfeeling formulations of the economist's trade.

So let me get this straight: Radiohead was silly for expecting anyone to pay, and those who did pay were silly for paying?

That can't be right. And it isn't. In fact, the analysis of the 62 percent number was shoddy from the get-go. One assumes the band disowned the number because the actual percentage of so-called "freeloaders" was lower than that, but for the sake of argument, let's say that roughly 60 percent of people downloading In Rainbows did in fact take it for free, and roughly 40 percent paid something for it.

Give these numbers an accurate context and they're actually nothing to sniff at, especially from the band's point of view. First, it's important to realize that not everyone who downloaded it for free did so from the same place and for the same reason. Free downloaders can be divided into three distinct groups: 1) people who never would otherwise have bought this Radiohead album; 2) people who might have bought it but now won't because they got the electronic version for free; and 3) people who downloaded the album online for free because they were still planning to buy the physical CD upon its release.

To be as precise as possible, let's divide that first group, furthermore, into two segments: a) people who never would otherwise have bought this Radiohead album because they rarely buy anything, opting always to find free (if illegal) downloads of the music they want; and b) people who never would otherwise have bought this Radiohead album because they were never previously interested in listening to Radiohead.

Okay, now we have some context. And you can see that Radiohead in this case lost revenue only from group 2--people who might have bought In Rainbows if they had to but didn't because they didn't have to. Group 1 people, who weren't going to buy it anyway, represent no loss for the band at all, and in fact there's a bit of a gain, exposure-wise, if you consider that the experiment attracted the 1b types who never previously listened to the band's music before.

And now don't forget that all the income from the sales went directly back to the band. In the past, because of their major-label contract, the band received exactly zero percent of online sales. Be aware too that among the (let's say) 40 percent of people who paid for the download were no doubt at least two interesting subgroups: people who would not otherwise have bought the album at all, and people who bought it and would also buy the CD.

One of the most bracing things about the experiment, to me, was how Radiohead, in offering the album as they did, was forthrightly acknowledging that group 1 exists in the world, something no one in the traditional music industry seems ready or able to do. Outside of filing lawsuits, the music industry does not appear to know how to respond to the fact that there are a significant number of music consumers in the 21st century who pretty much don't pay for music, at least not in the direct, old-fashioned way of buying a song or an album from a record company or independent artists.

The band was saying, okay, let's see if we can still earn a living out here, working around the reality of how many people might be inclined not to pay for a download. If they were not the first, they were certainly the highest-profile musicians to give this a shot.

Hooray for Radiohead, a band of truly innovative, serious, and talented musicians. Boo to those who snipe at them every step of the way. And now: where do we go from here?

Answer: I don't know. The whole thing is a still-unfolding mystery. But I do know five particular things that are relevant and seem to be continually overlooked in discussions about the brave new world of music in the digital age.

(To be continued....)

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