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In case you missed it, Radiohead's new CD, "In Rainbows," was released to the public as a download from their website - for free, if you didn't want to pay anything. Or, you could pay what you wanted. It was a shot across the bow of the major record labels, and only a band with the stature of Radiohead could pull it off. But did it work? They shut down the site after only three months (mere infancy in the recording industry).

A follow-up article recently came out in The NY Times detailing how this all came about:

Radiohead's pay-what-you-choose gambit didn't just set off economic debates. It should also establish 2007 as two kinds of tipping point for recorded music. One is as the year of the superstar free agent. After fulfilling its contract in 2003 with its last album for EMI, "Hail to the Thief," Radiohead turned down multimillion-dollar offers for a new major-label deal, preferring to stay independent.

Signing a new major-label contract "would have killed us straight off," he added. "Money makes you numb, as M.I.A. wrote. I mean, it's tempting to have someone say to you, 'You will never have to worry about money ever again,' but no matter how much money someone gives you - what, you're not going to spend it? You're not going to find stupid ways to get rid of it? Of course you are. It's like building roads and expecting there to be less traffic."

After detailing how the music on "In Rainbows" came to be, the article goes back to whether the experiment of "Pay-What-You-Want" has worked:

The band and its managers are not releasing the download's sales figures or average price, and may never do so. "It's our linen," Mr. Hufford said. "We don't want to wash it in public." A statement from the band rejected estimates by the online survey company ComScore that during October about three-fifths of worldwide downloaders took the album free, while the rest paid an average of $6.

Factoring in free downloads, ComScore said the average price per download was $2.26. But it did not specify a total number of downloads, saying only that a "significant percentage" of the 1.2 million people who visited the Radiohead Web site, inrainbows.com, in October downloaded the album. Under a typical recording contract, a band receives royalties of about 15 percent of an album’s wholesale price after expenses are recovered. Without middlemen, and with zero material costs for a download, $2.26 per album would work out to Radiohead’s advantage — not to mention the worldwide publicity.

Hmmm...so why did the band shut down the site?

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