There's the sound of the first chink in the RIAA's armor. :D

Artists don't need archaic record labels to be able to sell their product. If their material is half-decent, people will buy it - simple. The record labels only benefit all the no-talent people out there selling garbage that wouldn't sell in a free market.

On a side note, I find it interesting Americans paid more on average than non-US customers....so much for Americans being cheap!

2.26$ an album is way better than most musicians will ever see from their record sales. So, Radiohead is probably making more money from this album than any studio album. This just helps prove Record companies are grossly inefficient and server no real purpose other than inflating music prices and shoving crappy pop music down our throats.

how many of those 1.2 million people aren't real fans of Radiohead, but heard about this and thought, why not?

how many of those 1.2 million wouldn't have even listened to the new music had it not been available for download?

there's a lot more to consider than just 'how to stop people from freeloading'

the way to make money is to reach out to new markets and that just can't be done under the standard model, and is precisely why I haven't purchased a new CD in over 6 years. when's the last time you were able to go to warehouse music and say: I want to listen to this CD before I buy it.

there is no way I can test drive it before I buy it, just because a band has been great doesn't mean they can't produce crap, how many people found that out with metalica with every CD after the black album?

Ok, 2 problems here, this has been in the news and alot of people probably visited the site just to check out whats going on. These idiots can't tell how many people actually downloaded the album, so how can they compare the visitors to how many actually downloaded. It's not safe to count all your visitors as downloads so that number and amount paid is probably alot more than that.

Some folks, like myself might not be big radiohead fans and download the MP3's just to take a listen. If 40% bought it, that's pretty good - it means that fans bought, non fans didn't.

Sam, you spot on. I have had people when hearing rh would say that is the band pay what you want for the albumn. I'm going to go and get it. Along with the fact if everyone where to buy the albumn for 10-11 bucks all radio head would see is 2 bucks from that not only that they would not see a check in the mail for like 3 to 6 months. While the corporate machine chops the 10 bucks to be down to 2 bucks. The new way is to get the 2 bucks and get it now and no middle man.

I agree with Sam on this... the number of people who may have been introduced to Radiohead because of this offer may be indeed significant. This can often times generate more ticket sales to concerts - and as I've read, this is money that goes right to support the band. So even if 2.26 is all they get, that doesn't take into account the possible benefits from concert-goers.

I think Radiohead would have had more sales had their album been available at a higher bitrate download. Giving customers choices and perhaps placing a minimum sales prices would also be a good strategy. I like the idea of direct sales and avoiding the record labels. Once the bugs are worked out I'm sure a lot of bands will go the same route.

What I want to know is how many boxed sets did they sell? Those were going for a pretty penny.

And it will be interesting to see how many "freeloaders" buy the CD when it's released. I personally like CD quality sound and feel that paying CD prices for MP3s is the true rip-off.

Are people listening to the radio who turn the dial when ads come on freeloaders, too? Or who don't go out and immediately buy whats advertised?

None of these statistics address that people may have downloaded, listened and then decided if they would pay money. That's what I had planned to do but didn't get around to it.

and irrelevant

This is a great new model, from the band directly to those who want to hear the music. And it does look like Radiohead made more $ on this than a standard CD release through a bureaucracy.

Here's hoping it continues to succeed.

More musicians need to say screw it to the record companies, most artists get a few cents per album sale, U2 negotiated a dollar per album, the highest ever. If Radiohead got a couple bucks profit from each album that is awesome! I woulw much rather buy it direct and know that the artist is in control of the money. Plus it will also mean the artists will have more control over the music they make.

Radiohead is a known band that has had a lot of $$$ spent buy a label to get them there. Now that they are there they don't need the label to make a few and I repeat a few $$$$. Most people want to steal the music. The crap about the records costing too much is nonsense just self serving bs. The public thinks it has a right to steal music.

Most downloaded music SHOULD be free. It's usually compressed at 128k -- 320k if you're lucky -- while CD's are at 1440k and so are much higher quality than downloads are. Downloads should be considered a form of advertising in the same way that FM radio served as a lower-quality teaser that convinced people to go out and buy a better copy of the music they really liked.

Also, the original intent of copyright law was to give artists and authors TEMPORARY protection so they could make just enough money to be worth the time and cost of producing works. This TEMPORARY protection was granted by the public through it's proxy, the government, IN EXCHANGE FOR those works being released freely to the public domain, for the greater good, at the end of that TEMPORARY protection period. There's no such thing as intellectual property, and nobody deserves a never-ending stream of revenue for work that they only did once. Imagine if architects had to get paid royalties everytime someone walked into a building they designed. Ridiculous.

I like radiohead, I like this idea, and I generally dislike the record industry.

This does not prove the uselessness of the record industry. Radiohead was essentially standing on the shoulders of the recording industry in this effort. They would not have worldwide fame, and these numbers, without their prior association with the record industry.

Every unsigned band on MySpace could make their tracks avaialable for free download tomorrow, and none of them would come close to generating these numbers.

All this proves is that an already-famous band can generate interest by doing this. How does this supplant the recording industry's ability to market and distribute unknown artitsts?

The author should have found some industry figures for the average an artist makes from the sale of each CD, and then determined if this project was successful or not by comparison. However, I do think that this model - sales directly from an artist's website - will only be successful with bands that are already established. Nine Inch Nails will be the next, is what I'm hearing.

And yes, I purchased this album. :-)

[Now that would have been a number I'd be interested as well. What is Madonna's share of an album? What does Carrie Underwood get? And what about newcomers such as Leona Lewis? I am not aware on any industry numbers on average shares. If you come across them please let me know. But I have a good feeling that these are numbers that are kept under wraps by artists and record companies. -ed]

Excellent point Sam-

I use you-tube to explore new music. I've found some great new music, but it hasn't prompted me to buy new music yet. I think it's because the quality is good-enough and I know I could make my CDs from it if I wanted to take it with me in my car. While I'm sitting at a desk top though, you-tube is fine. It would be better if I could make a play-list and burn a CD/DVD from you-tube or google-video.

In an ideal market, Radio Head would be paid per play. If an average user listens to a CD 10 times and there are 10 songs on the album, and the artists want to make $10 dollars per album --- that comes to 10cents per play. Unfortunately, there are only a few devices in the market place today capable of notifying Radio Head when one of their songs are played.

you-tube might consider the providing the first few plays for free and then charging listeners after that... There are so many opportunities to generate sales these days, but there are more loopholes at the same time...

I've never been a big Radiohead fan, but I went out and paid for and downloaded their new album just to support their efforts. I don't remember the last CD I purchased simply because of the RIAA and their stance on DRM. I can listen to all of the music I like on the radio, and that's how I support the artists I like, by listening to the stations that give them the most play time.

I think the lesson to be learned here is that the RIAA does in fact have an archaic business model and if they'd like to continue to compete, they need to update their methodologies and beliefs or they will be left behind by consumers.

I was interested in the outcome of this experiment. The final analysis for a band is, regardless of how many "freeloaders" there were, did they make more money overall as opposed to distributing through a record company.

If 2.7 million dollars is the same or more than what they would have earned otherwise I would say it was a worthwhile experiment and a potnetial start to using the digital format to their advantage.

Agree on the Metallica part. Disagree on the "new markets" part.

I think that the result is that you can put your own price, so you buy. But when you are forced to pay $20 for a record, you just decide not to.

On the other hand, 2.7 mils doesn't sound like a lot, but considering that from a $20 record an artist get $1 or $0.50 (that I can't say) and the other $19 are $9 for marketing and $10 for Labels' profit. Then I think this is a much better model.

So, let's assume record companies are totally obsolete, and music consumers expect all recorded music to be released for download for free. (By the way, I couldn't care less about major labels, I'm talking strictly about indie labels and musicians.)

Bands now pay for their own recordings, and give away the music. The band is forced to tour more in order to make a living, to make up for lost revenues from record sales, and to make up for the money a record company would have provided to cover recording expenses. This leads to an increase in the number of bands touring at the same time, meaning more good concerts per month available to fans. Meanwhile, music fans attend the same number of concerts, so attendance at each concert decreases.

Competition increases for bands to land a night at a limited number of venues, while per-show attendance decreases. Local promoters and venues lose money, and are less likely to book new or lesser established touring bands. Ticket prices fall due to decreased demand. All but the largest bands (such as Radiohead) see less significantly income per show. Making a living as a musician becomes nearly impossible.

Music quality decreases substantially as talented musicians waste time and energy working day jobs to make ends meet, instead of honing their craft in their time spent away from touring. Recording quality decreases as there is less money to pay for talented producers and recording engineers. Good music becomes harder and harder to find as the most talented musicians get lost in the sea of lousy bands, with no money for good recordings or good promotion.

A doomsday prediction? Hopefully.

I never would have gone to a store and bought an $18 or whatever CD from an artist I'd never listened to just to find out it was terrible. I went to the Radiohead site and downloaded the album. They have another fan now.

As for the $2.26 per album, that is amazing for an artist to make that much on an album. Most artist make less than $1.00 per album. Many new artists get as little as $.10 (bad representation).

Musicians don't need a music label to help with pressing disks or distro anymore. Even a small band can scrape together enough money for server space (or even their own server) to distribute their music.

It's a great time to be a musician.

"U.S. users willing to pay $8.05 per download on average"

"the average number per album was $2.26 ($3.23 from U.S. users)"

you are idiots

That's cause USA is more generous than other countries.

"If Comscore's numbers are correct" From what I read, the only numbers Comscore offers that aren't guess-timates are 1.2 million visitors (awsome exposure for the band) and $2.7 million in sales (mostly profit). And I don't see how the conclusion that this business model only works for popular bands is supported anywhere in the data or the rest of this article.

How much profit does the band make per album? So was this experiment sucessful? Did the band make more money this way then through a record company?

These numbers don't include the purchase of the 80$ box set that comes with a free download. If you factor that in I'm sure they made much, much more.

Don't forget, all those people that downloaded it for free would have done so anyway, whether or not Radiohead offered the album on their own site. People who don't care about paying for their music already have plenty of ways to get it for free regardless, but maybe by doing it this way, a few of the freeloaders were guilted into paying.

it seems like a lot of figures are being tossed around, but none seem to have included the purchases from true fans (me included) that purchased the discbox for 40 pounds/80 dollars. i imagine that number must be great.

either way, this is a huge accomplishment and the record companies, who have been pillaging the consumers and artists for years, are becoming obsolete. bravo radiohead!

I agree with Mike. The average artist makes 7.5 cents per song on a CD with a maximum of 10 songs (75 cents). $2.26 sounds pretty dang good compared to that. Sounds like a win for fans, a win for the band and big trouble for record companies.

Something very fishy is going on. This is the reason. Since Radiohead has dropped their record company and the album is only being sold through Radiohead’s website, they are the only people who would definitely know the sales / download number. Radiohead has very publicly said that they will release the information six months after the download release. Why all of the news companies are trusting Comscore company which is a known spammer and spyware installer is beyond me (check Norton and also McAfee).

Here is my take on it. Music companies are paying Comscore to release phony numbers to make the band look stupid to prevent other largely known bands from dropping the record companies. I bet if there was an investigating reporter they could easily find the story. After all, why is Comscore putting out an effort to tract the Radiohead deal? Someone is paying them. Follow the money.

So, all this says is that Comscore is making guesses. That it doesn't have real numbers to work with. So the entire article cancels itself out. For all Comscore knows Radiohead might've pulled $29 an album.

My favorite bit: "Comscore is certain that only two out of five downloaders may actually have done so." So they're absolutely positive something might have happened. Nice.

"Artists don't need archaic record labels to be able to sell their product. If their material is half-decent, people will buy it - simple."

Dont be so ignorant. And dont act like you know the music industry. There is plenty of talent out there, To say that if its good it will sell isnt true. Its much more complicated than that. If radiohead never had a label in the first place they would have never been noticed and never have become as big as they are. I hate what record labels do to the music industry too.... but I also get sick of ignorant comments.

seriously though, that figure is amazing. you shouldn't say they were overly optimistic, they are getting a ton more money than they would have gotten going though a studio. Your "lessons to be learned" have nothing to do with the facts. Perhaps you should learn a little bit about an industry before writing about it.

[How many downloads do you think will an unknown artist get - and how many users will be willing to pay for music from an artist they do not know? -ed]

You left out the most important piece of info! How much money did they make on the album with this strategy? And how does that number compare with what they would make the conventional way?

{Radiohead has not released any sales numbers. -ed]

Decent album - worth the $10 IMO.

album sucked that is why i did not pay. i deleted it after listening to it is was not very good. if it was worth anything i would have went back to pay.

So if I get this straight, even with most people paying nothing for In Rainbows, and even with having only one way to get it -- that being a very clunky web experience -- Radiohead still made SIGNIFICANTLY more than they would have using a record label. And those record label guys do what exactly? Give DJ's cocaine in return for playing awful music on the radio?

A recording company usually does quite a lot for an artist. They do not only pay for a studio but also cover extra needs such as orchestra or choir recordings (which are very expensive), album promotion, agreements with retailers, tax payments, suits against illegal distribution of stuff, organize and fund band's tours, make and sell promotional items (t-shirts etc.) for fans et cetera...
If you're good enough to do these things yourself, you can do without a recording company. If you have enough money to hire people to do this stuff for you, you don't need it as well.
And last but not least - if your album/tour is a failure, you do not end up in debt.
I do not defend recording industry but it definitely makes life easier for an artist.

They don't even know what percentage of the 1.2 million who visited the site downloaded. All that statistical data they come up with is pure garbage. It means nothing without actually factual information.

What percentage of those who visited and downloaded were first time listeners? A large number of those were probably downloading it for free, and even another percentage of that probably trashed it. The fact is there are too many probably and not enough facts.

One thing is clear though. People are tired of the fat cats making all the cash then gettin wasted and performing hit and runs on general public, and getting off nearly scott free. Sorry but I refuse to give people like that any of my "HARD" earned cash.

When you see a CD in the stores for $18.99, surprise, the artists doesn't actually make that. If they get $2-$3 dollars a CD, they are a major artist.

Nevermind if you are a new artists, most sales get chalked up to "promotions." (like CD clubs) in which they get only songwriting royalties.

How will they feed their children with only 3 million dollars other merchandise sales and royalties they make every month? I'm really crying for these poor rich guys.

Gimme a break, I make $25,000 a year. They're each pulling 7 figures easily, especially when they get touring..

Not to mention they probably make under $1 for the whole band to share off from a record label.

First they assess the average hourly income of their listeners, and then have somebody make a web game that on average takes the cost of the CD (in average pounds per hour) in time. So 1 hour if they make 10 pound an hour. When you finish the game, you get the whole CD. But if you pay, you can buy powers within the game that make it really easy and fast. This way, its free only for the poor who have the time to spend on a game.

I wonder if it might be possible to keep more accurate logs next time? Or maybe Comscore is not in a position to give the actual totals?

What does Radiohead have to say about the whole experiment?

1.2 million radiohead fans, LOL

radiohead have a bigger fanbase than that easy,
yet you try to say that most of the downloads are publicity related

on the first few days maybe

no way to test the music?
but you could download free, then re-download and pay

Its a shame that society has such a low value on music.

This model wont work for smaller acts if you look at the costs of making and promoting a record. Big acts can do this because they can spread costs out over more units and because they dont need to promote so heavily.

See if you see a radio head promo/news/add, your more likely to read it because you know who they are (assuming this is your style of music), but if you see something for unknown act your less likely to read it. So new acts need more promo. Infact if it was a new group that was doing this, I doubt they would have got the free promotion by having this story on tgdaily.

Also most small acts dont have the money to risk on the costs of making a record and promoting it, like radiohead does.

So if big acts sell albums at such a low cost it will lead to newer acts being forced to try to do the same to stay competitive.

Why would they do this whole thing and not use a web statistics system capable of tracking downloads? It's not that hard.

Conversations with a friend out of memphis, TN who has had 5 top forty hits in roughly nine years... (am I giving away the band to some? maybe lol):

On tour, they get paid a two hundred dollar a day per diem, whether they play or not. Mostly they live on the tour bus, and they get regular old holiday inn hotel rooms, just like the rest of us.

Typical royalties on the first five albums are under twenty five cents an album. Oh, and everyone in the band splits that.

What is actually negotiated on a contract is much higher, but they screw them, and here's how:

The label fronts money to produce albums and videos, and then to advertise those albums and videos. This amounts to millions of dollars spent... The musicians have agreed to pay back every single cent.

Typically, for the first five albums (most bands that a lable wants to have get offered a five album deal) they force you to spend most of the money you would profit by on marketing your own band. They do front it to you, but you pay for it all in the end, every dollar. Then they make piles of money on the production side, charging what is by some considered ridiculous amounts of money to produce an album. There are schools of thought that say this is reasonable in a world where the right mixer for this task costs a quarter of a million dollars... And there are others that say exotically expensive studios are no longer needed in a time when thirty thousand dollars worth of equipment will give you ninety five percent of the quality.

Being a resident of Richmond, Virginia, I also know the band Gwar. Gwar left warner bros some years back, and have handled their own production ever since. The album War Party was recorded in a basement not three miles from where I sit and type this. Their latest video, 'School's out', was produced for a cost of a hundred thousand dollars. It was filmed in New Orleans, and funded by a government grant to the production company. It was produced for Gwar free of charge. So there are ways.

It is somewhat amusing to me to watch people talk about the music industry. They mostly really have no idea. If they really knew how it worked from the inside, they would typically be ten times more pissed off.

You've identified the key portion of this issue: the bands don't care about money

for years bands have been screwed out of the majority of their profits because corporations like GEFFEN (famous for screwing nirvana out of /-50million) need to monopolize the distribution, but what import does this have to those members of the music community who truly consider themselves artists, and the music their art?

Radiohead doesn't care about money, and each member likely doesn't have to work another day in their life if they felt like it. It seems apparent that they just want to know how people feel about their music.

I don't think you need to be famous to pull this off. You get a band together and write and perform some songs. Record them in your basement/garage to start, Windows has some programs to help with this. ;) You release them on the internet under GPL. Free. People like them. You release some more and ask for donations (pay what you like) some people pay and you can quit your day job. If people like your music, you get paid and can keep making it for them. If your music sucks, well, you shouldn't have quit that day job so soon.

Just think, if you can get a million people to download a track and pay an average of a quarter, you have $250,000. Split that 4 ways and you probably still have about $50k each after paying for the service to distribute (let's say that the distribution service takes half, that's still about $30K each). You market it through YouTube videos. How many good songs to you need to produce in a year to be Rock Star Rich???

Of course, if your music sucks, you won't be getting that big contract either.

I don't know much about this... But for what I'm reading, $2.26 is a great number. I suppose that all the work that were done by the recod label will be done now by them or people they hire. Will they have enough money to pay for it? So the money they earned minus the money they will spend (money that they didn't had to pay before) will be the real number of their earnings.

The next step will be for the download to be offered in Lossless e.g. FLAC; I would even justify setting a minimum token charge to pay for the bandwidth because of the larger files.

THEN, some sort of non-profit organization, or indeed the Government, to create an iTunes sort of website, paying from its own pocket all costs related to servers and site-building. Obviously I do not count on that being the U.S. - for starters it was never interested in promoting culture the way we are used to in the rest of the world, and secondly they would lose all the funding from the major labels. The E.U... now that I think would be possible, though long.

Btw, from an economics point of view, I'm surprised the idea of making away with the middleman is not used much more nowadays. It's simple free-markets theory, no need to be a genius to know that any band would make more money by simply offering the music on their site for even a tiny fee - all you get with a service such as iTunes over this is that you only have one account (faster) and it's all in one place (centralization, for searches etc.); solution? centralized payment service and a 3rd party ad-driven catalogue.

This is a very positive report, and proves record labels are doing nothing but hurting artists. Radiohead made all this money and paid the label nothing, just because fans offered to pay some money. Remember, 2.7 million is a whole lot more than $0. Its OK for people to listen for free and decide if they want to support the artist, and how much they want to pay for a given piece of work. Sliding scale is the way of the future.

will buy it now :)

love radio head.. i have a dvd of theirs :)

Now, we all know that artists only get about a low of $0.50 to a high of $1.50 from each major label sale. And, all promotional costs, production costs, tour support, and advances come from that $0.50 to $1.50. Fine, no problem. It's all the 'other stuff' that drives bands and mangers crazy. In the end, all a band needs is capital, a world-class marketing and promotion firm, and great system administrators. With results like these, bands have better resources than ever to be as big as they can dream!

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