Better Than New


The Sweet Sound of Disruption by morepete
October 10, 2007, 1:08 am
Filed under: Digital Life, Innovators, radiohead | Tags: , , ,

rainb.jpg

Did you hear that? The music industry’s business just got disrupted. And this time, it’s going to stick. Radiohead, a multiplatinum band from Oxford just released its new album, “In Rainbows” to tens of thousands of fans over the Internet without a hitch, just 9 days after announcing its existence and with nary a record label to be seen. This war was won quietly. Radiohead came, saw and conquered.

This is a very big deal — and not just because “In Rainbows” is Radiohead’s best album in seven years. No, this matters because they have completely eliminated the middle men between themselves and their fans. Forget iTunes. Forget record stores. Forget promoters. Just log on and start listening. Artist to fans, in one click. Every penny of revenue, straight to the artist.

It’s quite common these days to discuss Business Model Innovation casually, as if it were an everyday occurrence. It actually almost never happens, as the record industry has shown. For example, the iTunes business model is exactly the same as the one found in physical record stores: Labels license recording rights from artists, then reproduce recordings and send them to direct marketers, who sell to consumers. Everyone gets a small cut. All that changes between the digital download market and the physical market is the method of distribution. Here’s the business model for “In Rainbows”: Artist makes recording and sells it to consumers. Notice anything missing?

Radiohead will likely pair up with a record label to release a CD edition of “In Rainbows” next year, but they already have the ultimate bargaining chip — they’re fine working in direct sales. What else does the record industry have to offer? If their terms aren’t met (and I imagine those terms will include absolute right to the master recordings), they can walk away happily. This is a small gunshot across the bow of the record industry, but it could turn out to be the shot heard ’round the world. Many popular artists, including Nine Inch Nails and David Bowie, are waiting in the wings to leave their labels and follow Radiohead’s example by releasing their music directly to fans and keeping all revenue. For an established artist with a loyal following but few radio hits, record labels have nothing to offer at this point. Distribution costs nothing. Promotion is meaningless. Mindshare is everything. This, then, is the real promise of YouTube and other social media. Not just for unknowns to make it big — but for the bigs to finally be on top on their own terms.

At a certain point, the question will become not why Radiohead left EMI Records when they did, but why they didn’t leave years ago. What does this mean beyond the record industry? That remains to be seen. But if I worked in any content business, I’d get thinking quickly about how to change my model to feel more like this — and a lot less like Top 40 radio.

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9 Comments so far
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[…] Radiohead’s “In Rainbows,” released early this morning over the Internet just nine days after the band announced its completion, is out and completely brilliant. It’s also not for sale through any existing music distribution channel. It’s DRM-free, you can name your own price (no, really), and not one penny goes to the record companies. My thoughts on what that means are over here at my other blog. […]

Pingback by Cult of Mac » Blog Archive » The Best Album Not on iTunes or Amazon

[…] Radiohead’s “In Rainbows,” released early this morning over the Internet just nine days after the band announced its completion, is out and completely brilliant. It’s also not for sale through any existing music distribution channel. It’s DRM-free, you can name your own price (no, really), and not one penny goes to the record companies. My thoughts on what that means are over here at my other blog. […]

Pingback by News » Blog Archive » The Best Album Not on iTunes or Amazon

[…] Radiohead’s “In Rainbows,” released early this morning over the Internet just nine days after the band announced its completion, is out and completely brilliant. It’s also not for sale through any existing music distribution channel. It’s DRM-free, you can name your own price (no, really), and not one penny goes to the record companies. My thoughts on what that means are over here at my other blog. […]

Pingback by The Best Album Not on iTunes or Amazon

Breaking the vertical (distribution mode) …… horizontal ( distribtion ) rules ….. people are the focus not finance
This is the new way … thanks Radiohead
Maurice

Comment by Maurice

Very cool for a “major” band to do this. Very realistic too. However it’s nothing new. In the electronica scene this is common practise. for example Jochem Paap (a.k.a. Speedy J) distributes an entire DVD in surround sound this way. It’s available here

Comment by Otto

As an audiophile, I’ll be waiting for the full quality CD release.

But this can be applied to the book publishing industry as well.

Comment by Paavopetie

I think it could be applied to the book publishing industry (Stephen King for one, already did it several years ago), but that creates a huge problem in that market that it doesn’t here. In books, the dominant format is the physical printed page. In music, the final destination is most often an iPod, so the transmission medium is far less critical to the experience people expect in music these days…

Comment by morepete

[…] The Sweet Sound of Disruption « Better Than New […]

Pingback by The Gungle» Blog Archive » Radiohead’s rolled applecart « via Better Than New

[…] post at Better Than New, where the author talks about the band Radiohead’s decision to sell its latest album (In […]

Pingback by To the top of yours étiquettes/iTunes record - Radiohead disappears direct




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