Well, the industry itself has tried committing suicide by wasting money promoting one hit wonders and boy bands, now the successful bands are going to try and kill it by taking the companies revenues away too. Make no mistake, this isn't about setting music free, it's about cutting out the middle man and making life easier for themselves. (Not that I'm for the record companies interests, they've put themselves in this position.)
Let's say Radiohead are used to getting 30% of revenues that the record company prices the CDs to the retailers, so that would probably be in the region of £2.50 per copy. Assuming they have received wider publicity and will sell more (due to it being a bargain), they probably only need £2.00 per copy to make the same as last time. (Difficult to know since we don't know how many more they will sell and how much their real costs are for downloading.)
Their production costs should be lower so they'll be making on that too - since they are no longer under contract to produce a record "suitable for sale" - meaning they won't have to spend as much on production and they won't have tracks rejected by the record company. They can basically put out whatever they like.
By removing the bands considered "cash cows" from the industry, there's less to spend on new acts. I'm not sure if that will focus the industry on picking up good bands and leaving the dregs, or if they'll pick up more "safe" acts and we'll end up with bland radio. But for the acts that don't make it there's little chance they'll get rich the web - it's not a way forward for a new band.
If Radiohead are going for more freedom of expression though, loosening the grip on what the record co's will release by killing the "suitable for sale" clause, then it could be a good thing. IMHO.
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