Radiohead’s recent album “In Rainbows” is probably the most eagerly-watched musical release of all time. And that’s not because of any musical prowess on their part, but because of an experimental business model that has the power to disrupt the whole balance of the entire music industry…
The sound of disruptive ideas
You can’t un-think a great idea. And at the heart of any disruptive technology or business model is an idea — an idea that others either have not or dared not imagine.
As for Radiohead, I imagine their idea of releasing their “In Rainbows” album in a pay-what-you-like digital format may have been a mix of the two.
In much the same way that Digg democracy might out-live Digg itself, this still entirely experimental music buying experience might have its moment of success elsewhere, away from Radiohead, its originator.
As a nascent business model, if there is to be any degree of serious up-take in the coming months and years, the winners are the artists and the losers are the larger music labels.
Currently, the role of the music labels is that of the middle man — they are the facilitators between artist and their audience. They also take the majority of the earnings, too.
But the beauty of this new and potentially disruptive business model is that the music labels are unseated from the table, being replaced by a more direct relationship between artist and audience.
Tuning into success
I find it odd that Radiohead have been tight-lipped about download numbers:
“Yorke rubbished reports that the album was downloaded 1.2 million times in its first week alone – but refused to confirm any figures.”
However, sales figures are a much more visible component:
“Early sales figures showed it heading for number one in the album chart, although it was only narrowly outselling Take That’s “Beautiful World”, industry weekly Music Week reported.”
This isn’t the first time I’ve talked about Radiohead’s new album release:
“If success is simply good marketing, then the web is a huge part of the marketing mix. In fact, if you’re smart, you could succeed through the web alone.
And if big-name artists can go it alone, and do so successfully — in a way that is entirely and demonstrably reproducible — then more will follow.”
But there’s a note of caution to add:
“However, the fact remains that the music labels were a very functional part of the process, all of which will need to be replicated in some way.
Not every aspiring, would-be or established group is going to explore this route. Some probably just won’t care enough, while others wouldn’t be smart enough. And going it alone isn’t going to be an easy thing to do, either.”
So if this new idea can’t be un-thought, or fit for just any artist to experiment with, does the idea have a future?
Business to a new beat
As anyone in marketing will tell you, knowing your target audience is one thing, finding them is something else entirely.
The problem with what Radiohead has started is that most people will look at their idea in isolation, which is a mistake, since their execution won’t likely be the last word on the matter.
Also, their estimated earnings don’t look great, either. But the thing is, even if those earnings only match or drift close to what they would have earned had they stayed with EMI, they’ve still done really well — they’re now taking a larger percentage of the earnings.
But to make this idea fly, Radiohead still had to promote and distribute their album, none of those services are free and would need the services of third parties.
The return of the middle man!
It would be incorrect to claim that Sony BMG, EMI and Warner are the only music labels, since “indie” labels have been around for years, serving smaller and typically much more niche audiences.
For the Radiohead idea to enjoy any future success, it’s these guys who’re going to make it happen. Right now, these guys will have their own portfolio of artists and some kind of distribution model in place.
I imagine one of these independent music labels sitting down with their artists and putting forward the idea of moving their entire musical collections over to this new pay-what-you-like business model.
We know that most people have access to music for “free”, albeit illegally. If by employing some alternate copyright method, an indie music label could quite legally expose their artists’ music to a potentially greater audience:
“Perhaps only one person in ten thousand who downloaded the Radiohead CD will buy the thing but that might still be more than would have bought it had the CD never been distributed online.”
In effect, they’re employing a key weapon in the marketeers’ arsenal — the loss-leader. So what one guy might download today for free might prompt his girlfriend to pay for and then download the week after.
The sound of distant drums
Great ideas are only as good as their execution. And in some cases, the execution of a great idea relies heavily on the participation of others.
So for Radiohead’s new music revolution to turn from a modest marching band into an anthemic war song, their idea is going to need artists and indie music labels alike to be singing from the same music sheet…