Radiohead

(1) One of the major benefits of Radiohead’s release strategy for the forthcoming In Rainbows hit me squarely on my walk to the subway this morning: no leaks.

The release of each of Radiohead’s last three albums has been an event. Not just a manufactured Kanye v. 50 affair, but an honest-to-goodness critical and popular bomb dropped on the record buying public. And, no thanks to their savvy fans, each record tends to leak ahead of the disc release.

I never had the impression that Radiohead minded leakage, per se, with Johnny Greenwood saying the following about a two-month early leak of Hail to the Thief

Shame it’s not a package with the artwork and all, but there you go. I feel bemused, though, not annoyed. I’m glad people like it, most of all. It’s a little earlier than we’d expected, but there it is. (WP)

You can read between the lines there to understand a few things about Radiohead. They value albums as an experience. They enjoy designing the collateral that accompanies them. And, as illustrated by their never-ending iTunes holdout, they aren’t crazy about badly encoded versions of their work.

All three factors lead to a band that’s “bemused” by leaks rather than “annoyed” – they think it’s quaint that anyone is making an effort to obtain an early version of an incomplete product.

By offering a pay-what-you-will download of In Rainbows two months ahead of the physical release the band gets to leak on their own terms. They can independently master their disc and shuttle it straight to their service provider for upload, with no studio interns to smuggle a pre-master or label reps to swipe a final copy.

Furthermore, fans get the music on Radiohead’s terms – not some nth generation digital-to-analog-to-digital transfer encoded to an MP3, but a direct-from-source version engineered to the band’s specifications.

It is, in a sense, the best possible leak.

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(2a) The Radiohead situation got my awesome co-worker Chris and I talking about the current rapidly-failing state of the music industry.

Record companies sit on what for decades seemed to be an inexhaustible resource – audience-facing intellectual property in the form of sound recordings and publishing rights, and artist-facing deep pockets that control access to big producers and hype machines. However, those resources were inexhaustible only because the means of distribution and production were highly controlled.

As a nominal example, take Fleetwood Mac. Much to my teenaged consternation, for over a decade there was no single greatest hits CD on which you could purchase a particular trio of their biggest classic rock hits, namely “Landslide,” “Rhiannon,” and “Go Your Own Way.” Yes, their single disc hits package leaves off “Landslide.”

Why? Who knows, but it’s as good of an illustration as any of the record companies and their inexhaustible resource of intellectual property, which remained valuable due to scarcity. Scarcity driven by selectively signing bands and selectively releasing their work, by holding on to publishing and sound recording rights, and through cross-promotions and radio payola, to name just a few of the channels metered with a heavy hand by labels.

At the crux of the matter is a business paradigm that’s all sewn up in old media. Record companies still want to act as a broker of music between and artist and their fans, and their preferred method of business is still retail transactions – physical or virtual.

For all the talk of the threat of file-sharing and the relative oligopoly of the digital music market, it’s the business model that’s sucking the life out of the music business. Unless you’re Radiohead (or Ani DiFranco) putting together a gestalt album package, what does album intrinsically mean? Why sell albums? Why sell? Why not let listeners subscribe to an artist like a magazine that doles out singles instead of issues?

Because that system doesn’t really require middleman, does it?

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(2b) Recently the tables have turned on the record industry and its previously inexaustible seat of power.

iTunes is returning the business to it’s single-oriented 45 days, killing per-track margins. Its a la carte nature combined with p2p makes it harder than ever for companies to reap extra album sales by repackaging the same release or through judicious exclusion of key tracks.

Meanwhile, songwriting artists are wising up and shopping to smaller labels and imprints to get more out of their publishing rights or make deals to own their own masters, and label power over FM radio is being eroded by satellite, internet streams, and the almighty iPod.

Suddenly that seemingly never-ending glacier of resources is melting at the labels’ feet while marquee names like Madonna take their business elsewhere because their major moneymaker is no longer their records but their overall brand. Artists major and minor are increasingly make their living from merchandise, publishing, and live shows, painting labels quite plainly as outmoded loan sharks hoping to advance money and support in exchange for the brand and intellectual property. And, the artists are finally – rightfully – balking at the concept.

They no longer need labels – labels need them.

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(3) Of course, record labels know they are about to be sitting in a lukewarm puddle resources, and they’re taking every action to prevent their leverage from melting.

Amy Winehouse was withheld from the American market for years after her strong debut with Frank, including several months after her blockbuster sophomore effort Back to Black dropped in the UK to massive acclaim.

Why wait? Universal Island wanted to drum up a perfect storm of stateside media coverage for their critical darling, and they wanted to ride a huge post-Grammies wave of attention on other UK imports who recently followed the same strategy: Gnarls Barkley, KT Tunstall, and Corinne Bailey Rae.

Amy shipped a big hit – score for Universal. However, it was just a single disc, and Amy hasn’t been anywhere near a studio for follow-up due to her whirlwind US promotional efforts. Six months later she’s canceled her first major headline tour for a stint in rehab, and is being haunted by bad press wherein her family is urging listeners not to buy her record until she cleans up her act. Universal Island is now pushing out Frank to American soils, but there’s no telling if she’ll be good for a follow-up hit.

None of that is the label’s fault, per se. What is their fault is letting the business artificially lead the music – trying to manufacture a hit with art that was already in the world by keeping Winehouse bottled up in the UK when she was fierce and ready to tour behind a fresh disc.

America got her second-hand, and it shows.

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(Epilogue) Radiohead is engaging in the antithesis of the Winehouse strategy – they’re letting the music drive the business, and it makes an astounding amount of sense. Release digital the second the disc gets out of mastering to hit rabid fans and major tastemakers. Then drop a special package for the die-hards and collectors. Finally, after drumming up a holistic, naturally occurring storm of interest, release a more traditional version of the disc for retailers to shill to the masses.

Not only does it make sense, in that order no one feels slighted by buying all three releases – no one is getting teased out by eighteen extra-special limited edition versions of the disc, it just runs a natural course: leak, premium, normal.

Kudos to Radiohead for breaking free not only of their label, but of the industry paradigm. I hope everyone votes early and often with their wallets handy.