“Rainbows” Reveals a Brighter Tomorrow

Yesterday, Radiohead announced that they would self-distribute their upcoming album. With record labels, iTunes, and the future of music in mind, soothsayer Nick Martens analyzes the implications of this surprising but welcome attempt at subverting traditional methods of purchasing albums.

“Lennon, Harrison rise from graves–Beatles reunite, plan world tour, new album.”

That, and only that, could have been a bigger music-related headline than yesterday’s news. For those who haven’t heard, Radiohead announced the October 10th release of their new album, titled In Rainbows. After years of cryptic delays and tribulations with record labels, Radiohead is distributing the record themselves, allowing buyers to set their own price for a downloadable copy. This radical announcement, considered in the light of other recent events, hints at some major changes in the landscape of online music.

Allow me to clarify the price issue. Radiohead is selling two versions of In Rainbows through their website. One is the £40 (roughly $80) “discbox” version, which contains copies of the album on both CD and on two 12″ vinyl records, a bonus CD with extra tracks, and artwork in book and digital formats, all packaged in a hardcover book and slipcase. I shouldn’t have to add that the design of these materials is utterly gorgeous. This deluxe set should ship in early December.

While that cornucopia of Radiohead swag sounds deliciously tantalizing, the other version of the album is what will send ripples through the music industry. On October 10, In Rainbows will be available exclusively by downloading it from the Radiohead website. The price: “It’s up to you. No really, it’s up to you.”

What does that mean? Well, it means exactly what it says. When you go to purchase your preorder, there’s a text field instead of a price. You enter whatever number you see fit (I paid £3.95). So, theoretically, you should be able to get the new album for £0.45, the mandatory transaction fee.

This is intriguing in and of itself, but flexible pricing is only one facet of the real take-away from the announcement. Music aside, In Rainbows will not be remembered because people chose how much to pay for it but because one of the biggest bands in the world chose to self-publish and distribute an important record. To the best of my knowledge, this is the first time that a major band, at the peak of its popularity, has released a hotly anticipated album without any publishing or distribution partners.

The implications of this choice are broader than they initially seem. Clearly, it’s a shot across the bow of the major labels, a stark pronouncement that they are no longer necessary. But that’s been obvious for years, and, if you’ve been following the saga of Radiohead’s 7th LP, you’re probably not surprised that they’re launching download-only. If anything, In Rainbows effectively runs a highlighter over the writing on the RIAA’s wall.

Of course, it’s difficult to interpret any of Radiohead’s actions as representative of a larger demographic, given the band’s notoriously eccentric and unconventional behavior. However, in conjunction with the announcement of Amazon’s excellent mp3 store last week, I believe a larger trend can be observed: the future of online music is not an iTunes monopoly.

This should cause the collective music-listening public to breathe a huge sigh of relief. Not because iTunes, in its current form, is anything less than superb, but because competition is always good. This is especially true as evidence continues to mount showing a more sinister Apple. As Steve Jobs and company become further entangled with disreputable bedfellows (e.g. AT&T, Universal, Sony Entertainment et al.), they seem to become palpably less trustworthy. Can I jailbreak my iPhone if I don’t unlock it? The message is unclear. Is Apple going to deliberately break my phone if I do unlock it? Probably not, but I still feel nervous trying (even though I’ll soon be in Europe for half a year).

So, why do Radiohead and Amazon signal a decline for iTunes? Because they prove that excellent, iPod-compatible alternatives do exist to the iTunes store. Further, they both demonstrate the advantages of the oft-maligned notion of “flexible pricing.” As Daring Fireball’s John Gruber points out, many albums are much cheaper on Amazon than on iTunes, and if you throw In Rainbows’ “price” into the mix, flexible pricing starts to sound pretty darn nice.

Will Radiohead’s “pay what you feel” scheme catch on? If that was the extent of their model, I would be doubtful. Where it becomes more interesting, though, is when you consider the ultra-premium edition of the album, which is sure to carry lucrative margins. The huge gulf between the costs of the two versions further extends the meritocracy inherent in choosing a price by suggesting an implicit contract along the lines of: “if you think this record is truly great, here’s how to show your appreciation.” This tiered system not only feels right, it’s also a far more palatable business model than just “give us however much you want.”

In the end, I see these events as the beginnings of the online music business becoming what it always should have been: an open market. As a publisher, are you looking for a clean, direct link into the world of iPod? Go to the iTunes store. Would you rather sell straight mp3s over the web, but still want a convenient experience? Go to Amazon. Do you see digital albums as loss leaders for premium editions, concert tickets and t-shirts? Give the songs away on your own site. These options don’t need to be mutually exclusive, and further choices will surely emerge. What matters is that as Apple becomes increasingly unpredictable, they have formidable rivals to push them in the right direction. As the web inevitably becomes the heart of the music industry, these alternatives will flourish.

Let’s just hope the labels don’t screw it up in the meantime.

UPDATE: In Rainbows will be released on retail CD in early 2008. Whether Radiohead has partnered with a label for publishing or distribution is unknown. I don’t believe that this affects my argument in any significant way, so I haven’t fiddled with it.

Nick Martens is a founding editor of The Bygone Bureau. You can email him, if you like.