The Future of the “Music Industry” II

I’d like to take a brief time out from hyperlinking, you-tubeing and podcasting to offer a short little essay on the release of In Rainbows. So please, bear with me as I indulge… or just skip the whole thing, if you wish.

Much has been made of Radiohead’s widely-publicized decision to let fans decide how much they would like to pay for the first versions of their new record, In Rainbows. I’d like to add to Stephen’s comments some of my thoughts on this.

First, they are offering the new songs in an MP3 format, which is universally recognized as being an inferior format. The advantage to MP3 is that it is incredibly accessible, more so than any other audio format before it. More so than vinyl records, than cassette tapes, than multi-track recordings, than video etc.

But the band is not relying solely on the MP3 format to sell its record. It is using this format as its lowest common denominator entry point, through which the majority of the public will purchase, hear, and forever file away this album.

This model suggests that different levels of purchasing platforms in the future could become common. The MP3 format could become the cheaper and more readily available format, while vinyl albums – with their superior sound quality and potential for visual art awesomeness – could be the more expensive, more fan-obsessive option. The third level between the medium-quality MP3 format and the high quality vinyl format could be superior-quality enhanced digital recordings, digital versions in high def formats or whatever other new technologies spin our way in the future.

Second, while most of the discussion has been around the pricing scheme of the new record, there is far less mention of the fact that the band is still seeking a major distribution deal for when the record does in fact come out as a CD. As well, there is the special $80 packaging of the album that contains a double vinyl LP, the enhanced version of the CD, additional art, and a digibox (whatever the *&!# that is!)

Are Radiohead’s practices altering the industry landscape significantly? I would say yes – the marketing practices of the band and its management have given new options to the larger labels and to other music marketing executives as to how to push records and music on the public. This is a significant industry shift. Better? Not sure. Different, yes.

The clever marketing of In Rainbows is placing a new premium on the customized shopping experience for consumers. Not to get too theoretical here, but it is true that we roam through a world that values individualization above anything else. The center of this society is consumerism. Therefore, to release ONE version of an album, at ONE price, is now impossible, what with all the choices out there, from ring tones to laptop colors, from shoe designs to Facebook profiles.

The different levels of release and the hundreds of different price points one could pay for In Rainbows are consistent with today’s consumer world. Writers, bloggers, executives and others are hailing this as a sea change to the music industry. It gives control completely to Radiohead and its management team.

The plan creates a new business model. This, I think, finally, is what is truly exciting people in the industry. Judging by the first week sales of 1.2 million copies and counting, you could also argue that fear is touching these people in much the same way.