Radiohead May Have Made $6-$10 Million on Name-Your Cost Album

mytrip passed us a link to a Wired article indcating that if music industry estimates are correct Radiohead has made as much as $10 million on the 'In Rainbows' album so far. This despite the estimates of widespread piracy of the album as well. "[The estimate assumes] that approximately 1.2 million people downloaded the album from the site, and that the average price paid per album was $8 (we heard that number too, but also heard that a later, more accurate average was $5, which would result in $6 million in revenue instead).

They don't have a label anymore

[MichaelCrawford]

they are completely independent, or perhaps you could say they are their own label.

I doubt many record labels would have permitted them to do this.

for the record

[SolusSD]

Making $6-$10 million on a new album the week it comes out is _unheard-of_ in the music biz-- especially since radiohead gets to keep most of it, if not virtually all of it. (When you buy a CD in the store for $14 less than a dollar actually goes to the artist). Also-- this album went platinum in the first week! Huge success for Radiohead.

Re:Figure for comparison?

[metrometro]

Use this:

Number of album sales * Average Retail price * 0.1 = artist's take.

Labels, retailers middlemen and RIAA lawers generally take a 90% cut. Traditionally, the label pays for production and advertising, which was considerable pre-internet. Those costs have plunged now that the internet can hype anything and production costs can be trimmed to 2 or 3 good mics, some software and a laptop.

But all you really need to know is that the old way got them ~$2 an album, and this way got them $5 or more (estimated), while building considerable goodwill with fans. Sounds like a pretty good model to me.

That's what I ahve said over and over again

[geekoid]

If the musicians do not sign, the contracts will be changed.
If all new group boycotted the contracts en mass, they would change, literally over night.

I am not sure why you imply radiohead is being greedy.
They let the fans pick the price. The amount of money someone makes has NOTHING to do with greed.

Re:One thing's for sure:

[wilymage]

Check your history before making off-hand statements:

The band signed a six-album recording contract with EMI in late 1991, following a chance meeting between Colin Greenwood and label representative Keith Wozencroft at the record shop where Greenwood worked. [1 [wikipedia.org]]

Off the top of my head, the six albums were:

1. Pablo Honey
2. The Bends
3. OK Computer
4. Kid A
5. Amnesiac
6. Hail to the Thief

The band have no record contract, having fulfilled it in 2004.

Re:for the record

[burris]

The artist royalty may be less than a dollar but generally the artist doesn't get any of that. That's because all of the costs of production, marketing, packaging, etc... come out of the artists royalty.

see http://www.negativland.com/albini.html [negativland.com]

Re:Who the fuck is radiohead?

[The Great Pretender]

I paid $10 but dowloaded it twice. Once at home and once at work. Seemed to be easier than downloading it and then putting it on a thumb drive taking it to work and uploading it. I must be really stupid.

Re:for the record

[Anonymous Coward]

Rubbish. $6.95 will buy a web hosting account with 1TB of disk space and 1TB of data for the month. Let's be really generous and say the album is 100MB in size. The total cost for each album downloaded is $6.95 / 1TB * 100MB = $0.000695. This is a negligible cost. For 1.2 million downloads the cost is $834. Even I could afford to pay $834 up front out of my own pocket. Think I'll start learning the guitar...

Re:for the record

[Chandon Seldon]

In this case, bandwidth is a smaller expense than credit card processing fees - if they got a decent price for their bandwidth, by an order of magnitude. Remember that sites like Youtube exist - the larger videos on their approach the size of a music album, and *none* of their users pay money.

Re:Who the fuck is radiohead?

[gigne]

The 45 pence charge was actually a credit card admin charge. If you put 0 in the box you didn't have to pay anything at all.

Re:Who the fuck is radiohead?

[Anonymous Coward]

Except there was no transaction fee if you entered a zero price.

Re:Who the fuck is radiohead?

[dan828]

Actually, no. There was a credit card processing fee of .45 pounds. So strangely enough, if you opted to pay nothing, there was no need for a processing fee and thusly no charge. That way you could check out the music for free, and if you decided it was worth it you could then pay whatever you liked.

Re:Who the fuck is radiohead?

[Scrameustache]

Who the fuck is radiohead?

Exactly. The idea that 1.2 million people downloaded Radiohead's latest is not believable given historical sales data for the band.

You mean given that since historically they've sold more than that for most of their albums [wikipedia.org] means that they shouldn't sell as much for this one, which they offer for less than any previous album?

How does that make sense?

PROTIP for firefox users

[tetromino]

The website failed and left me frustrated.

I'm using Firefox on Linux, and I too had some trouble with the site (the flash navigation didn't work). Fortunately, View -> Page Source revealed Radiohead's secrets. Firefox users, just click here:
http://www.inrainbows.com/Store/index3.htm [inrainbows.com]

Re:for the record

[Dunbal]

Keep in mind bandwidth isn't too cheap.

      You're joking, right? Even if it cost them 100k (that would be 8 cents PER DOWNLOAD which I sincerely doubt), name me another industry where you can make a 10000% profit margin?

Re:and that is the threat to the big labels;

[mochan_s]

Extensively processed music will become a thing of the past. People will play and record on devices that are much cheaper than they do currently. The lower capital costs will enable them to better weather rampant piracy, surviving on fans' CD purchases, some legitimate online sales, and concert revenues.

It's a marketing campaign made by the cheap recording gear makers. It is NOT TRUE.

Extensive processing can be done by anyone with the computer.

However, before extensive processing comes, we need a very basic thing - a good room, a good instrument, a good microphone. It's very very expensive to make a good room, buy good equipment and microphones - plus, using them requires training and experience.

Without a good basic sound to start from, all the processing done on the computer will not sound good.

Re:and that is the threat to the big labels;

[adolf]

The cost of a quality musical instrument, as a tangible thing, might not be going down. But we're not talking about Strats or Steinways; we're talking about recording, specifically the processing end of it.

To that end, let's take amplifiers, which are the near-universal processing and monitoring side of the electric guitar. These are definitely getting cheaper. A Marshall stack is always going to be expensive, for a variety of reasons, but other amplifiers from companies like Line 6 and Roland keep bringing down the cost of quality amplification and effects. (Line 6's processor modules are also available as software plugins with no hardware dependancy, which can reduce or eliminate the need to have separate amplifiers/cabinets for each guitarist, as far as the recording process goes.)

Synthesizers are cheap, and getting cheaper. They consist largely or entirely of software, lately, and there's even a few free open-source packages that don't suck.

Commercial multi-track software recorders like Adobe Audition (formally the much more reasonably-priced Cool Edit Pro), and of course open-source products like Audacity and Ardour, allow more possibilities for recording, post-processing, editing, and mixing than were ever dreamed possible with analog gear. Multiple-input sound cards from companies like RME and M-Audio keep dropping in price and gaining new features.

It is quite possible, and has been for some years, to produce extremely professional recordings with nothing more than a few good microphones, a decent outboard A/D device, a few selections of totally free software, good engineering practices (!), a spare bedroom, a revealing home stereo (or maybe just some quality headphones) for monitoring, and the instruments that the musicians already own. Oh, and a little bit of talent from everyone involved doesn't hurt, either...

So, in reply to you, UncleTogie: Good instruments have always been expensive, and will probably only become more so as the cost of raw materials continues to escalate. But gone are the days when the only way to cut an album was to rent time in a recording studio stuffed with gear, and so the cost of cutting an album is indeed dramatically lower than it has been in the past.

And in reply to GP: Because computers are, by any estimate, quite cheap and getting cheaper by the second, it is simply not very hard to produce "heavily-processed" music without a "proper" studio. These days, they're even fairly quiet, which again lessens the cost of recording -- there's just no great need to physically isolate a modern, quiet, cheap Dell machine from the recording space. This makes the whole process a lot cheaper in terms of real estate, dedication, and cabling. Even my 2-year-old laptop is able to run for extended periods with the fan completely disabled, its Hitachi hard drive is practically silent, and it is more than fast enough to enable nearly any manner of "professional" recording thanks to the virtues of USB 2.0 and Firewire.

Nine Inch Nails' most recent album was largely recorded in hotel rooms and tour buses, for example, using the same software and technology that is available to anyone else. And while the expensive Protools rig that Reznor finished the album with is sure to enable a smoother and more productive workflow than anything being produced in Audacity, that doesn't mean that a competent engineer cannot accomplish similar results with far less.

Back on topic, these lower barriers to entry all conspire to mean that a recording contract continues to be less and less useful to a musician or band which seeks to make money selling the products of their creativity, but that by no means is any indicator that quality must suffer in exchange.

The guys that called Scott Tenorman a crybaby

[denzacar]

Remember that Southpark episode when Cartman gets that kid (Scott Tenorman) to eat his parents? http://en.wikipedia.org/wiki/Scott_Tenorman_Must_Die [wikipedia.org]

Radiohead was the band that told the kid that just ate the chili made out of his parents that he was a crybaby and totally not cool.

There.. now you know.

Re:Who the fuck is radiohead?

[thegnu]

Except for if they sold it through the RIAA, they'd make 37 cents per sale, instead of $5. Or $1. Or whatever. Almost noone is so cheap that they can't beat what the RIAA pays.