Radiohead's new album made $6-$10 million?
 

http://blog.wired.com/music/2007/10/...tes-radio.html

Is this good or bad compared to what they would have made it they released using traditional methods (music stores)?

For those of you not aware, they made the album available online, and allowed people to pay as much as they thought the album was worth.

People still buy cd's? Jeez

yeah, $10.000.000 :)

They still are going to release it in stores.

Either way fuck em.
Let them do it as a garage band instead of waiting until after a record company built you.

Yes but thats $10 mil in a short period of time. How long would it take to earn $10 mil on a normal CD? I hear the artists earn like $1-5 a CD. So it would take many millions of sales to earn the same.

Yea how many new bands will receive much needed support from their net download fans :helpme

the novelty of them being the first greatly improves how much money they have earned. They have had free advertising on every news channel and many talk shows ect.

Record companies often would give advances and all that shit. Many artists were pre paid for their next couple albums. Hence the shit they produce, they already have the funds.

Everyone is always so quick to blame the record industry for the crappy extra songs, the stupid prices, all of that shit. Hell they used to love giving people royalties on singles sold. (evil agents and contracts aside)

I call busllshit. First of all 500K people downloaded it for FREE over bit torrent. How much money did they make off that? Um ZERO $. Also it's a well known fact when they gave people the option to pay whatever they felt on thier own website over 1/3 gave NOTHING. Proving people are cheap assholes that expect welfare. Doing my math 1/3 of ZERO $ is ummm ZERO $.

$10 million is a press sensationalized lie. The band said no such thing. They DID make more than they would have if they released the album first though. Roughly around 4 or 5 million.

If they released an album they would have only sold 1.5 million worldwide at best... with a roughly $1.50 per album royalty. But, they don't play the royalty game with labels anyway...

The truth is they would have gotten maybe $1.5 to $2mil as an advance in the US and another $1.5 for the rest of the world... and never see a royalty check because they got everything up front.

They made out very well on this recent deal. I think they will be the only band who will do that well though. Folks participated for the novelty of it... plus Radiohead has a very computer literate, older and affluent fan base. It was a perfect storm for them more than it would be for an average band.

They made more money then they would have ever had made through a record label. I think this is actually kind of a groundbreaking thing. Established artists usually don't make much money from their records unless they sell a ton of records. They make most of their money through touring and selling stuff at their shows like shirts and posters and stuff like that. Other bands like Oasis have already said they will be doing the same thing and I think more and more established artist will be doing it. Once they have built up a fan base they have little use for the record labels and this way they can get the cash right in their pocket and still cash in on their tours.

So it is ok to use the record labels to build you up and get a fan base, then say fuck you and try to sell your own eh?
Plus do not most established bands not get royalties but actually record advance deals?

You are absolutely right on both counts.

Sometimes those advance deals will span several albums. It's not unheard of to hear about an act getting $50 million against 5-7 albums up front to do as they please. Madonna just got $60 million against several albums a few weeks ago.

The public at large is all gung ho to say "Fuck the major labels" but they have no clue how much work and investment went into making the majority fo thier favorite acts. That shit wouldn't have happened if it weren't for those same major labels that they demonize. Fucking Led Zepplin would have been a bar band. Radiohead wouldn't be shit either.

The millions that majors spend, and hours that their staffs put in, plays a major role in most major acts. There's no way around that.

Now, whether or not it's fair for acts like radiohead to thumb their nose at the labels after... I dunno. A band is an investment that usually lasts in 7 year cycles. If a band is signed for damn near 14 years then I think the label has gotten all they should have gotten.

But in Radiohead's case all of that is moot. They just licensed their CD version of the album to specific majors this week. See, they know very well that they can sell digital downloads all day, but they can't get the kind of promo that puts asses in seats on tour without the majors promo dollars.

What would you rather have, $5mill in music sales or $200k a night on the road plus another $4 million in advances?

People are using torrents to download this album? It's free on their website.. :error



DOWNLOAD
THIS CONSISTS OF THE NEW ALBUM, IN RAINBOWS.


IT DOES NOT INCLUDE THE EXTRA MATERIAL CONTAINED IN THE DISCBOX.

YOU CAN DOWNLOAD THE FILE DIGITALLY FROM THE 10th OCTOBER 2007.
THE DOWNLOAD IS PROVIDED AS A .ZIP FILE WHICH CONTAINS THE 10 160KBPS MP3 ENCODED TRACKS.

YOUR PURCHASE MAY BE SUBJECT TO A TRANSACTION FEE.
THIS WILL BE SHOWN AT THE CHECKOUT.

:1orglaugh:1orglaugh:error

Amen.

Ps: I paid the full usual price for an album when I downloaded it :)

I dont follow your train of thought here, After Shock... Did they breach a contract with their previous / current label?

If not, then why cant they go another route to promote themselves? They acquired their fans, not the record label. The record label's deals were there to make their money for those fulfilled contracts. Are you suggesting they owe them something? Are they attached at the hip for life?

Its $5 mill on the first month... so yea, Id definately opt for that. Wonder how much more they will make from this.

RT

YOU=RETARD. Go back to 1st grade and learn MATH.

Exactly who pays the costs of making the actual album in the first place? Ummm it's the labels. And yet they are evil to expect to recoup cost and God forbid make a bit of a profit.


Why does every up and coming band want to sign with an evil label then? Oh yeah they are broke motherfuckers than can't make an album on their own, yet then they expect 100% of the sales. Give me a fucking break.

10 million is a small drop in the bucket, but good numbers of an album that is getting little or no airplay and hasn't really been talked about since the big download day.

Kane, the actual costs to produce the record were borne by the artists themselves. The cost of the website, the downloads, the processing... all against that 10 million. I am suspecting that all done that they might net half of that. It sounds good, but you have to consider their history. Albums such as Kid A (went to #1 on billboard) sold many times more copies than that, and most importantly, continue to sell today and make the band money. The true money in music sales isn't a 10 second money shot, but a long term continued grind. How much money do you think that the guys form the Rolling Stones or the remaining Beatles make each year on residual income from album and song sales, income from over the air use, etc? That is where the true millions are made.

Many artists have come and gone, made a big splash with a platinum album, and dissappeared, only to turn up pumping gas or turning tricks to make ends meet.

Radiohead is in the very lucky position to have a long cultivated fan base (courtesy in part by the work done by people at their past record labels) that are willing to buy a record from the band with no real buzz, no media support, no radio airplay, and no real marketing. I am sure there are 20 other bands that live in the same area as them that can't get 20 punters into a pub on a saturday night to hear them play. Without the marketing, they never will make more than beer money.

It's easy for top acts to kick the record companies to the curb. But music is going to get very boring very quickly if there are no new acts and no new music (records and styles) coming into the marketplace.

I think it's a good number, they make even more after they release it on cd.
huh, people still pay for music ?

The Eagles are a good example of that. When Hotel California was originally released it wasn't a huge success. But the album continued to gain a following and sold so steadily over the past 30 years that it is among the highest if not the highest selling album in America. I think it's sold around 30 million copies.

Then you have MC Hammer that sold 10 million albums within basically one year and went broke soon thereafter. But his album isn't moving off shelves anymore.

personally, i havent downloaded it

so what's happening with the 'mechanicals' on the cd release and record company? since there is no actual product is the record company getting fucked?

Radiohead has no record company deal. They have entered into some sort of distribution only deal that will allow the album to be sold at record stores, but the band themselves are not signed to the label in question. I don't see there being any real label support for the album or any promotions, just a deal that gets the physical product, which radiohead was producing anymore as a very expensive (near $100) upsell to their fans.

It is the comparatively dark secret of this whole deal: Even Radiohead are smart enough to know that the real long term money is made on sales over the years, even if you are only getting 25% of whatever of the sale price.

Used to quite like Radiohead. Not so much now though...

i also i have read the record company nickel and dime the artist for everything. Hall & Oates didnt see any money from record sales until their album voices and it was their 6 or 7 th. Even if it was 3 million its probably more then they would see if the record went thru a label. I heard the real money is made touring and t shirt sales.

All I know is that I payed for the "big pack" of cds + disc + books for 60 euros.

The touring and the t-shirt sales don't happen without the record. They are part and parcel of the same thing. The record company puts up the money to record, puts up the money to press the record (physical product), puts up the up front money for the band to live while they are recording, and that money all comes out of the gross before anyone gets paid. Album production in the 80s and 90s was insanely expensive, meaning that records that sold millions often netted the artist nothing more than the advance they got to live on while recording it.

However, those same artists go out with record company A&R support, tour, make live appearances, interviews, music videos, and such all of which supports their live shows where the artist money is made.

No record, and the rest of this doesn't happen.

The "free the music, fuck the record company" people always forget that before there was a fire, there was someone with a matchbook lighting a fire. Without them, you just have a pile of cold wood.

yeah right. if that was true, then 1/2 the bands playing in clubs would be famous and 1/2 the bands that are famous would be flipping burgers.

Radio Head, NIN, Jamaraquoi and others are moving to this or similar formats. Lots of big changes are in store for the music industry.

Look for more soonish on www.Band.com :)

I've always heard that artists make pennies on the dollar for every album sold, but that they make most of their money on royalties. Like if it's used in a commercial, the ad agency pays the artists directly; same for whenever the song is played on radio, etc.

Many artist do make pennies on the dollar for albums sold. The average artist makes around $1 per album in royalties, but most of them don't see much of that money because the record companies make them responsible for almost all costs in make the record. The cost of recording, promotion, videos, travel and just about everything comes out of the artists royalties.

How much they make with radio play and licensing for commercials depends on who wrote the song and who holds the publishing rights. Many big labels make younger unknown artists sign away most of their publishing rights and since they are desperate for a deal and they don't realize how much it could cost them down the road they do it. Springsteen did this at a young age and sued to get out of the contract.

If you are the person that wrote the song an performed the song and you hold the publishing rights you can make some very good money licensing it.

it's a great album, regardless

It depends. In the case of Radiohead their contract had run out and they decided not to renew it. It is a risk and they decided to take it. Many artists get advance royalty deals and they hold out of the biggest advance they can because they know that is all the money they will ever see from the record companies. For example an artist may have a huge hit record and then sign a 3 album 10 million dollar deal. They take it because they get to keep that money no matter how the record sells. If it sells big, maybe they will see some money in royalties, but probably not.

If the artist has a couple of very big records and then sues to get out of their contract just so they can sell the next album online and get more money, that might not be okay, but if you have no contract, I don't see a problem with it. The record company made money promoting the band and helping the band get big so it's not like they got nothing out of it.

Same answer: It works well for bands that have a following. But for 1 million unknown bands, there will be little or no way to get traction and worldwide attention, which in turn will mean that the lucrative tours don't exist, and they will be out there playing for beer money and the chance to be artists, nothing more.

The record companies, the radio stations, the sat networks, MTV, the record stores, Itunes, and others are all in it together to take people from unknown to megastars. Without megastars, none of them make money.

Can you imagine you go to New York, and all you hear are local bands... and then you drive to Phili and it is all local bands, because nobody has the money, the connections, or the system to move these acts through the steps from idiots to major stars.

The radio would be dominated with winners of American Idol.

Can I be ill now?

Sure, longevity is always a good thing in the music business. The Stones haven't really had a hit in decades but they will sell out arenas world wide and both they and The Beatles still sell tons of records every year. It wasn't long ago that they put out an album of nothing but The Beatles number 1 hits and it sold like crazy. However that is not a realistic stick to measure against. Most bands won't make it even with all the marketing in the world.

In this case Radiohead does have to cover the cost of the producing the album and distributing it (via the website). however, they own their own recording studio so that cost is pretty low and bandwidth is pretty cheap. I would venture to guess even if they make half what the expectation is says and they made 3-5 million off this record that is more than they would have made using a major label.

Record companies charge the band for every thing. Say for example Radiohead got $1.50 royalty per CD sold. The record company gives them a 500K advance up front and another 100K for recording costs. They then decided to shoot 2 music videos at 400K each (this is actually pretty cheap in today's market) and they spend another 150K marketing the album to radio. Put 200K on top of that for other marketing (getting the band on shows like Letterman, putting ads in papers stuff like that) and we have a total of 1.75million dollars and the album hasn't even come out yet. If the album sells 2 million copies the band would realize royalties 3million dollars. You have to subtract all the other costs the record company put into it so the band actually gets 1.25 million. They were given 500K in an advance so their total take is 1.75 million. Subtract about 20% for agents and legal fees and that leaves them with around 1.4 million. Not bad, but still less than they probably made selling it online. They also don't have to deal with the shady record label and their creative accounting. There are artists who talk all the time about having their accountants audit the books of record labels and finding tons of money they were never paid.

So up front they make more, but will they over the long run? That is a good question. It looks like they signed a distribution deal to get the CD put in stores. There will be no promotion put behind it other than what the band decides to do so all those fans that want a CD can now go out and buy it.

I have worked in the music business and to me it seems that most bands need to get what they can when they can because they won't be around long enough to collect down the line. The music biz chews up and spits out acts like they are nothing. Take a look at the billboard top lists from 10 years ago. Most of the acts on that list are not around anymore. Most of the acts that are big today will not be around in another 10 years. The music biz, for most, is all about the here and now and what can you do for me today. There are a few acts that make it and hold on and continue to go year after year, but most will not make more than a couple of albums then fade away.

I happen to think that with the changes in the world and the internet now being widely available bands like Radiohead and others can go back to how things were in the 50's, 60's and 70's. You make a good album and you play live as much as you possibly can to cultivate an audience. If you build up a fan base the hard way they will stick with you and you can have the freedom to do things like this. If you don't, ultimately you will be another footnote in history that came and went.

On this board we are always talking about adapting to changes or you will fail. The record companies are in turmoil because of what the internet has done to them. Radiohead has taken a bold step forward into what may be a new business model. I applaud them.


---holy crap, sorry for the super long post--- :)

Honestly, I'm not sure how this thread even went this direction.
The MPAA and RIAA and RIAA and all other variations have shown constantly that they refused to step into the digital age.

They just don't give a flying fuck about trying to change or adopt.
Finally, a band takes a monumental fucking risk - in an attempt to kick some sense into the industry.

Yes, Radiohead have a fanbase, etc, blah - but it's all irrelevant - they stood up, posed their nuts, and released their album online, for free. Doesn't matter how rich or famous they were, they were making the decision to release their latest works for potentially $0.

It's obviously not the best marketting scheme, and I'm sure they make no pretenses about it, but fuck, it's something.

Be glad artists are doing SOMETHING. GFY appalls me most of the time.

Rick Rubin (the head of columbia records) recently was saying that he thought giving the albums away like this might be a legit form of distribution. Let people pay nothing if they way, or whatever they feel is right and then also put it in stores for those that want to buy a CD. The record companies would then enter into a deal with the artists to get a percentage of their touring and merchandise money.

It might work. You give the fans something and since it is cheap or free they give it a try and then they buy concert tickets and t-shirts and stuff like that down the road.

Kane, I don't disagree with you, but you are missing the important points:

Radiohead has effectively ZERO media at this point. The album is out there, there is no push to get it on radio, there is no media interest, there is no reviewer copies, there are no press tours, no junkets, no internation record listening parties, no hype. For a band like Radiohead with an established fanbase this, might be an okay situation, but they are trading entirely on what was created by the record companies and their artist management and promotion department over the last 15 years.

If Thom Yorke was a box filler at a local factor with a record, he would make exactly NOTHING. The album isn't that good. Radiohead without the labels behind them over the years would be nothing, just a bunch of pre-emo bitches with bad blue collar jobs.

The other part is that in the end, the artists have the big end of the stick long term. The Beatles, the Stones, Deep Purple, Led Zeppelin, The Scorpions, Styx (nice round and random list) are all artists that don't have to really put out new music to make a ton of cash. Styx play something like 200+ dates a year, making pretty darn good money. Even without a single additional album sale, these artists can go on and on making money without paying the record companies a cent. They own themselves and they make the cash. Record companies make the money up front, sucessful artists make their money long term.

Do you think the record companies make any money off of Mark Wahlberg acting? Do you think that the record companies are making money off Will Smith? Nope. The artists go on with long term value created in a greater or lesser part by the record companies and management that discovered them, nurtured them, and paid for them to learn and make mistakes.

Take that out of the equation, and everything changes.

I agree with you fully that having a long term goal and being lucky/talented enough to establish yourself while you are young could pay off big time down the road. Like you said most of the people on that list you put together haven't had a hit record in years, yet make millions touring and that all comes from them having established themselves and using the media/promotional tools available to them to get their name out.

Here is the problem. Everyone on that list was successful under what was really an old record industry. These days there is no such thing as artist development at most record labels. They sign new bands/acts, put money in them, hype the record and put it out and see what happens. If it hits, great, that band/act is the labels number one priority and they will probably have some big success (at least over the next 2-5 years) because the label will put the money and promotion machine behind them. If the album fails to hit, they are pretty much left out to dry. They may get a chance to make a second record to see if they can come up with a hit, but if they don't (even if the record is good, it just lacks a radio hit) they will either be dropped or ignored. gone are the days when a label would sign an act and help develop them and help them build up an audience. Most of the acts that do that these days do it on their own or with smaller independent labels. Major labels want home runs, not base hits.

Sure Radiohead has benefited from many years of promotion that the record label has put behind them and while the money for that promotion has come out of their royalties, it was still the industry knowhow that got them that promotion. Now that they are established they can benefit from that. Will that success continue for another 20 years? Who knows.

For me it is a simple equation. The list of artist you put together are well known, if not rock and roll hall of fame type bands. They are one in a million type bands. Most bands that have success put out and album or two then they either break up, get dropped by the label or the public just loses interest and even if they have a hit or two they will never be one of those bands that can still sell records and concert tickets 20 years after their one hit. For a few they will get lucky and have the right combination of foresight, talent, marketing and timing and they will end up being one of those elite few that can draw on short term success for years to come.

The number one thing any act can do is make sure they write their own songs and that they retain publishing rights to it. That way, 20 years after the song was released, if someone wants to use it in a commercial or a movie or TV show or something they can get paid and if their is a resurgence of interest in them they can cash in.

All that said you have to understand that ultimately it is the artist who pays the record label for that promotion/media hype. They don't pay up front, but they do pay out of their future royalties. There are many bands that get signed, get a small advance then have a ton of money put towards promoting their record and it flops. The artist is then in debt (sometimes millions of dollars worth) to the record label. They may or may not ever make another record because of all the contracts/debt that they now have to the label. It's hard to think long term and plan to be Led Zeppelin when your first record (while maybe good) lacked a hit, got dropped from radio and landed you a million dollars in debt to the record company who is now all over your ass to produce an album with a hit single so you can make that money back.

That is such an awesome concept though ahha

radiohead's future is clear - and they take much more from their new album than these 10 millions

my point was that the record companies are not the fucking great satan that so many act like they are.

I know radiohead was out of contract, could care less what they did. Hell they can do whatever the fuck they want. Just do not pretend that the record companies are all evil. Band can and do get paid, yes some loose all their cash via not watching their funds. Others sign stupid contracts and then wonder why they are getting cock up the ass.

i like what they did, but i still downloaded it by my normal means. however, a lot of people that normally download it made a payment for it.

imo they are getting money out of the downloaders, then using the traditional method to get the normal sales. smart by them

Exactly. People should know that.

It's all BS, I have been in the recording industry for 20 years. Sales reports all all fake. Check out this link http://www.soundscan.com/venue.html

They are just helping to facilitate change. There is also added value in that.

The "Record" business is changing. You don't need millions of dollars to launch careers. DIY. A good product, your laptop and YouTube can turn anyone into a star. This is all just the beginning and the Record companies are just trying to keep up and will pretty much survive on this point out from digital sales of back catalogs.