Radiohead, “15 Steps”
It wasn’t a big surprise when the English quintet Radiohead announced in 2007 that it had opted to forgo traditional record label distribution for its seventh album, In Rainbows. After all, since delivering Hail to the Thief, the band’s final record owed under its contract with EMI, Radiohead had largely fallen off the grid and appeared to be in no rush to re-up with EMI or sign with another major music label. But what was surprising was the band’s decision to forgo physical distribution of any kind. Instead of releasing the album on CD, the band said In Rainbows would be available initially only as a digital download from its website. Even more shocking: Radiohead would allow fans to set their own price for the record. Radiohead made the download available for a two-month window. The downloaded package included 10 tracks in MP3, free of any DRM software. When buyers placed their orders, they were prompted to enter their desired purchase price, plus a nominal transaction fee.
There’s widespread debate over just how well the record did. Initial reports indicated that the album generated more than 1 million downloads, a number the band would later downplay. In October 2008, Warner/Chappell, the music-publishing house that manages Radiohead’s copyrights, admitted that most people opted to pay nothing for the download. Fortunately, the company negotiated a clever licensing agreement that allowed the band to sell the CD around the world unencumbered by separate licenses on a region-to-region basis. The album eventually sold more than 3 million copies.
Call it the Priceline Experiment. While what works for airline tickets doesn’t necessarily translate to the music business, In Rainbows proved to be a watershed moment for the music business. In an interview with Time magazine prior to In Rainbows‘s release, the band’s lead singer, Thom Yorke, remarked, “It probably would give us some perverse pleasure to say ‘F*ck you’ to this decaying business model.” And that they did.