Enough Radiohead already! Updated
Sorry, can't help myself: Gigwise.com, a UK music webzine, is reporting that Radiohead has sold 1.2 million copies of "In Rainbows" in a little more than a week of preorders and live online sales. The number comes from the familiar "source close to the band," so try not to crack your teeth on the salt. After all, Radiohead's last two studio LPs have yet to go platinum (i.e., sell 1 million copies). Still, Gigwise's number is conceivable -- the album's really good, it's been four years since Radiohead's last disc, and you can't beat the price. As noted in yesterday's sour-grapes Radiohead post, a third of the 3,000 buyers surveyed by the Times of London paid the minimum of 1 pence (2 cents, plus an 80-cent processing charge), but the average amount was 4 pounds -- a little more than $8.
If that holds true and Gigwise's number is correct, Radiohead has just hit the jackpot and validated a new model, although one that might work only for a band with artistic credibility and a rabid following. By my guesstimate, the band needs to collect around $2 per downloadable copy of "In Rainbows" to come out ahead of where it would have been under a typical deal with a major label.
Under the standard industry contract, labels typically pay artists 10-15% of the suggested retail price of a record as royalties. (N.b.: the royalty payments don't kick in until the label has recovered all of the advance it paid an artist, plus other "recoupable" expenses, such as the cost of music videos. As a result, most major-label bands never collect a dime in royalties from CD sales.) Those royalties are subject to various reductions and exemptions, so in practical terms they usually amount to well under $1 per CD.
Radiohead, on the other hand, will keep the lion's share of the money paid by "In Rainbows" downloaders. It will have to cover the cost of servers and bandwidth, but that's likely to be pennies per CD. It may also owe some money to its managers, lawyers and the record's producer, if they used someone outside the band (I haven't found credits for this album, so I don't know). Even with those expenses, though, it doesn't have to charge much for the new record to come out ahead of where it probably would have been under its last contract.
Here's hoping Radiohead releases its sales results, and not just for the first week. It would be equally interesting to see whether sales drop precipitously from week 1 to 2, as has become the custom for top-selling acts these days. If sales stay high, that would poke a hole in the argument that selling music in the unlocked MP3 format, as Radiohead is doing, spurs piracy. There's no question that the songs from "In Rainbows" will be traded online and on swapped CDs, but it's hard to see that activity putting a damper on sales. After all, with Radiohead making it so easy and cheap to buy the tracks, the only people likely to nick them are those who won't pay for music or, lacking the requisite fake plastic money, can't.
Update: Eric Garland, CEO of BigChampagne, a firm that monitors file-sharing networks, said he simply can't believe the Gigwise.com number. The reported sales volume was far beyond what any CD has done since the Boy Band Era. No CD was available, just a pricey box set and the name-your-own-price downloads -- formats that would typically account for only a fraction of a band's album sales. Beyond that, only one website offered "In Rainbows," and it wasn't Google. Finally, Garland said, about
125,000 240,000 copies of the album were downloaded through p2p in the first day, and fewer each day since then. It would be unprecedented, he said, for legitimate sales to vastly outnumber p2p downloads; instead, the ratio is typically reversed. Granted, Radiohead was making the album available for free -- according to Garland, it's possible to pay a price of 0 pounds, 0 pence and still receive a download code -- but he remained unconvinced that the band's site would attract more downloaders than the p2p networks have. If the 1.2 million copies represented a full week of sales, he said, then the ratio of files traded to files bought would be more in line with past experience.