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Radiohead and Innovative Business Models

October 10th, 2007

Radiohead In Rainbows

I hear terms like “new paradigm” and “paradigm shift” and the like quite a bit these days. Sometimes it is regarding some hokey new age phenomena regarding quantum this or cleansing that. And sometimes it is in the case of business models and the like. We’re going to talk about the second manner of new paradigms here. Business models and, more specifically, the business model of the record industry which, like more industries, including our very own U.S. government, has become a bloated beast that mostly subsists in a parasitic self serving manner.

So many people talk about “changing the system” or something of the like. They talk about new modes of sales like the Amazon.com mp3 store which has another version of same shitty TOU that so many other online music stores have. Whether it is the ZUNE or iTunes or whatever, it has this DRM feature that limits your usage and is one more cap on that illusory thing called freedom.

Make no mistake about it, there are many little doorways to freedom and there seems to be someone who always wants to cap them, charge a fee for them, etc. You have the record industry which would like to cap how you use or share your music. You have the internet providers like AT&T who would like to cap how you get access (and by what speed) to the internet. You have the US government which would ultimately like to watch where you go and limit what you can see.

So removing one obstacle may lead us encounter another. But not removing any obstacles will lead to a pretty limited existence.

Remember those mix tapes you meticulously made when you were a kid? Rewinding the tape a mere inch or two with your fingers just so you get the cut just right? Remember the copyright notice inside and we all laughed at it because god this was going to be the best freakin mix tape ever?

Well, the same kind of mixing goes on today (as we all know), but it has been discovered that you really can limit the use of a music file now by inserting small nefarious bits of code that will govern how you use it. So much for sharing music. So much for owning what you purchased.

So this brings us to: business models.

The old business model had a record company controlling the rights and distribution to an artists work. Nuff said. And the artist usually got very little.

Now let’s say the artist was pretty huge and let’s say they were done with that contract they had signed so long ago. And they’d made a new album. And it was a great album. And they wanted to connect with the fans directly. What if they made it available on-line at a price anybody could afford. That is: a price which the consumer could dictate.

All things considered, if the consumer dictates that they want to give the artist a dollar for the album, then that is really most likely more than the band was going to get from the record company anyhow. So you realize that some people will give ten, some one, some nothing and some will likely give twenty or thirty because they love you. And the music you give them has no copyrights. No nothing. Your fans can play it anywhere, share it with anyone. Sounds like the band not only respects you as the consumer but also wants to work with this whole “new paradigm” thing. Rather than change the system internally, they figure they’ll start a new system.

What if every band did this? How much did the LCD Soundsystem get from their record label on a per album basis? I would have gone to their website and given them a few dollars for it but go into a store and pay 15 bucks for a CD? Or go to iTunes and pay 9.99 for something that they control? No way. Very little of that money goes back to the artist.

So check it out:

In case you didn’t know there is a new Radiohead album available online. It costs, well, it’s up to you what it costs. It is a new system and I think we will see other bands following suit.

www.inrainbows.com (what a lovingly simple website)

The Artwork of Michael Divine

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