Radiohead, which offered its latest album as free downloads last week, has seen 1.2 million downloads of “In Rainbows.” With no label, no promotions, and direct access to fans, Radiohead gave up its music for free and asked for donations, whatever fans deemed reasonable, in return. What the band got was an average of $8 per album sold, bringing estimates of profit to about $10 million. Not too shabby for one week. The number of albums sold in the past week exceeded the launch week sales of its three previous albums combined.
So what’s the takeaway? Artists that are big enough to have this kind of pull can more easily leverage this model. It illustrates the way in which the music industry is changing, and artists are practicing in a new marketplace where production costs are low, the middleman is less important, the Internet is ideal for distribution, and the supply is meeting the demand in a nearly perfect match. Other artists are beginning to take this approach as well, even those with smaller labels and less recognition (we all know that the true longtail of music artists has no choice to to use this model of Internet marketing and distribution).
But then again, it’s not the albums that artists make money on–it’s the tours, the t-shirts, and everything else surrounding the actual music, middleman or not.