“I like the people at our record company, but the time is at hand when you have to ask why anyone needs one. And, yes, it probably would give us some perverse pleasure to say ‘F___ you’ to this decaying business model.”
Radiohead’s Thom Yorke, October 2007, speaking about their release of In Rainbows via the band’s own website.
When Radiohead released In Rainbows in 2007, the internet buzz could be heard from space. Available via a ‘pay what you like’ platform, the album was touted by every Music 2.0 devotee as an example of the new music landscape, a landscape in which the traditional major label approach to selling music was destroyed forever. This, they told us, was the future. A band, recording an album themselves, taking it to their fans, eschewing the gluttonous pricing system of the fatcat major corporations and allowing fans to enjoy the music whilst compensating the band directly. What’s more, it came from an act with a solid, devoted fanbase, rather than from some desperate wannabes who were hungry enough just for the public’s attention to consider fair payment a reasonable sacrifice in return for publicity. Radiohead didn’t need publicity, they already had the fans.
Let’s get one thing straight. Radiohead have never cheated in any way. They gigged like maniacs in the early 90s, relentlessly. They gigged in the shitty little dives that weren’t even considered traditional live venues. I remember them playing Tracks in Portrush, Northern Ireland sometime around 1991, in a nightclub that was and still is better-known for alcopop-fuelled nights full of students sitting on the dancefloor to ‘rock the boat’. Achingly-hip and packed with major label a&r men it is not. Nor was Tamworth Arts Centre, where my wife saw them around the same time (I hadn’t met her yet, incidentally). The band made sure that everyone got a flyer for their mailing list, and made sure that they used that mailing list to its fullest potential. What I’m saying, is that in terms of fan outreach, Radiohead were doing it right before the internet even existed in any significant way. Whatever you think about their music (I’ve never been a fan) is irrelevant, what matters is that they developed their fanbase, made it a devoted fanbase by doing everything exactly the way that a band whose fans matter, should. They toured, they kept in contact, they NEVER compromised their sound or took any factor other than the music into account when they made it, they innovated and mutated and evolved their music with every release. No cheating.
It went really well for them, as we all know. Massive adulation, massive critical success, massive commercial success, massive fanbase. Somewhere along the way, they decided that it was time to release a record without the collaboration of a record label. Their reasons for doing so are unclear. For many successful bands, a label is something of a millstone. Labels traditionally offered a sizeable advance to a band, based on what they felt the record would sell. If the label thought the record would make millions of pounds’ worth of sales, they’d advance the band some of that money, and recoup it from the record sales. Music publishing splits are complicated, and are bargained over in advance. Songwriters get one payment per record sold, performers got paid another amount. Songwriter royalties are untouchable, but performer royalties can be bargained with. The more of the performer royalty the performer is willing to sign over to the label, the more the label will advance them. This is grossly oversimplified, and the complications are myriad, but the general idea is sound. However, a band in Radiohead’s position in 2007 might well wonder what purpose their label served them. They had financial success, so needed no advance. They had a fanbase, so needed no marketing. They had live demand, so needed no help getting gigs. They had critical acclaim, so had no need for help in getting reviews. Another aspect of the label system is that a certain amount of the money a label makes from a successful act like Radiohead inevitably gets lost on paying advances to new bands, or established bands, who don’t become commercial successes. Labels, to get anywhere, have to take risks. They have to gamble on those bands that might go huge. No label has the funds to only sign acts who are sure-fire successes, because those acts, obviously, demand bigger advances. The unfortunate part is when an act does well, and then realizes that it’s success is subsidising the ones who don’t do well. They may well just ask themselves ‘why do we need a label?’.
Guy Hands, (who was at the time CEO of EMI), responded to the news in a now famously-leaked memo, entitled simply ‘Radiohead’. In it, he acknowledges the need for major labels to move beyond the system by which successful bands subsidize the less-successful ones:
In this note, I want to address what Radiohead’s decision means for EMI and what it means for artists generally.
For EMI, this is a welcome reminder of the new digital world in which we operate and the need to focus on the services we provide to our artists. Those artists break down into three categories:
• Those who are already established and in whom we have invested heavily;
• Those with whom we are working to make really successful; and
• New, start–up bands.EMI needs business models which work for all three categories, the reality being that the vast majority of the third category will fail to achieve commercial success and have historically been cross-subsidised by the first category.
Radiohead voted with their feet and released In Rainbows on their own. They did so on an ‘honesty box’ system, by which the consumer paid what they wanted to for the album. They also released a luxury physical box-set option, priced around £50 or so, I really don’t remember. One line of thought was that this was the way forward for the industry – treat the music as expendable publicity-fodder, make the actual money on the luxury options. Deeper than that though, was the trust that Radiohead put in their fans to pay for the download. Reznor and Gabriel and a multitude of bloggers and tweeters had been saying for years that filesharing and piracy were only used as a way of hitting out at the major labels and acts who had exploited fans for decades, and that given a fair price and a transparent approach to artist-remuneration the ‘problem’ of illegal downloading would go away. Artists would be compensated directly for their music by their fans, fileshared music would increase fanbase, live shows would comprise the majority of an act’s income and everyone would be happy. Aside from the fact that I consider ‘luxury box-sets’ and their ilk to be the slimiest example of fanbase exploitation there is (charging 50 notes for something that cost 5 to produce is, even by my label-manager standards, obscene), aside from that separate issue, the premise seemed fair enough.
There are a lot of conflicting reports about how In Rainbows did. The official line is that it turned a ‘healthy profit’. Rumours suggest that it wasn’t as healthy as anyone would have liked, and that the honesty box system resulted in a majority of consumers not being very honest. But those are rumours, and can’t be trusted as fact. Yesterday Radiohead announced the release of their new album King of Limbs. It will be released on Saturday, through XL Records (in the UK, via two different labels elsewhere), presumably part of the ‘decaying business model’ Yorke wished to say ‘F— you’ to. The pre-order site crashed under the weight of fans buying the album in the first ten minutes, which is gratifying to those of us in the industry. It tells us that, where there is demand, people will buy music. It also tells us that demand does not need free giveaways to be created, nor does it need any sort of undignified pleading and cajoling on the part of the act to achieve. There are no gimmicks on the Radiohead pre-order page (unless you consider a luxury cd, vinyl and artwork edition to be a gimmick. I don’t like such things, but they’re hardly a new idea), other than a chance for buyers to win a signed12″ version of the record. Again, hardly a Music 2.0 strategy, it’s been happening for decades, as have pre-orders. You can interpret the release however you wish. For me it is a return to dignity in the music business. A situation where the band simply puts it thus : ‘we have a new album, if you wish to have it, pay us this amount and we will send it to you’. Simple, fair, dignified for band and fan alike. No auctions of hand-painted ukuleles, no 1000-quid phonecalls where the band sing it to you, no ‘pledge 20 quid to have your name in the credits’ gimmickry. It’s true, those tricks are for smaller bands to make money out of a limited fanbase, but frankly, they’re becoming the hallmark of acts who are obviously resigned to their positions as unlikely to ever make a living from simply making and selling music. That’s why Radiohead’s version is more dignified for the fan – because they don’t have to wake up some day and realize that they once spent 600 quid on a hand-scrawled banjo decorated by a now-disappeared vocalist. Sure, Radiohead have a huge demand already, they can sell cds, it’s ok for them. Well, they got to that point by gigging, by building a fanbase, by getting a record deal that allowed them to develop and mature, by never compromising. They didn’t get it by clogging up people’s FaceBook walls with ‘check out my free download’.
Blancomusic's Blog 