Is there gold at the end of In Rainbows?

8th October 2007

Nobody has yet heard any of the music, but when Radiohead unveiled release plans a week ago for their next project it instantly provoked one of the biggest media frenzies for a new album in years.

Anything Radiohead do is usually news to some extent, but the fact they were not only making available new album In Rainbows as a download themselves in just 10 days but were also allowing anyone buying it to pay as little or as much as they wanted for it provoked the kind of coverage that neither the band nor Courtyard Management could ever have imagined.

Provocative words such as revolutionary were banded about in the aftermath as commentators pondered whether this concept could ultimately change the face of the music industry forever.

If this is some kind of revolution it is probably news to Courtyard Management’s Chris Hufford and Bryce Edge, who have been steering the career of the band from their Oxford base since 1991. In a manner that flies in the face of some of the hysterical coverage the plan has sparked, Hufford simply and calmly describes the name-your-price download as a promotional tool and a matter of “art driving commerce” in what stands as the opening part of a strategy that will reach its second phase early next year when a conventional CD album will appear through a more traditional record company-to-retail model.

The download ploy may only have taken a few hours after being announced last Monday to make headlines around the world, but Hufford says the pricing idea has been in gestation for five years since the pair met a friend in the IT business while in Los Angeles. “That’s the way they were distributing software and they were getting lots of donations,” he adds. “It’s good to think the consumer is honest. I think most people are.”

Hufford’s faith in consumer integrity has, so far, been rewarded with Courtyard suggesting as many as 50% of fans are choosing to pay something for the download, which will comprise a DRM-free 160kb version of the album. Fans can also pre-order a £40 “discbox”, containing a booklet, two CDs and two vinyl discs via the website at www.inrainbows.com.

And, after listening to feedback from fans, Radiohead’s management is also considering giving them the option to pay after they have downloaded.

“Some are saying that they have not heard it so don’t want to pay much but that they will make a donation later if they like it,” explains Hufford. “On October 10 when it goes live [and fans receive the download], we might put a box on the site to allow people to donate after hearing it. It’s a matter of how do you make someone pay for something they can get for nothing? The only way is to make them think about how much it is worth to them.”

With recording for In Rainbows completed in June, prior to the album being mastered and then remastered to meet the band and producer Nigel Godrich’s exacting standards in September, key to the managers’ decision to take such an unusual route to market was the band’s desire to try a new approach and not sit on the album for months.

“With Radiohead it’s increasingly difficult to find ways of avoiding the same old routine,” says Edge. “The two parameters that we were given by the band were ‘We’ve finished the record and we want people to hear it now’ and ‘We want everyone to get the music at the same time’. It’s been a bugbear throughout the latter part of their career; how do you get out of the week-one syndrome?”

Out of contract since EMI released the platinum-selling album Hail To The Thief in 2003, Radiohead have seen their management hold discussions with all four majors and a number of independents about the prospect of releasing In Rainbows (see box). But none of them was aware of the band’s download plans prior to the October 1 announcement to fans.

Hinting that In Rainbows is the band’s most accessible album since OK Computer, Hufford emphasises that a record deal remains an absolutely essential element of the release strategy. With the music set to appear all over P2P networks as soon as it is made available in any case, the download is purely a promotion vehicle for a CD release in January. A full European and American tour will follow next summer.

“In November we have to start with the mass-market plans and get them under way,” he says. “If we didn’t believe that when people hear the music they will want to buy the CD, then we wouldn’t do what we are doing. This is a solution for Radiohead, not for the industry,” says Edge.

“This is for Radiohead fans; the masses probably won’t even know about it,” suggests Hufford. “We think we have a brilliant record that loads of people will like so we are going through the promo to start with and hopefully the word will spread and the masses will come on board.”

Far from being enthusiastic about digital downloads, both managers strongly favour the compact disc as a format of superior quality. “CDs are a fantastic bit of kit,” insists Edge. “You can’t listen to a Radiohead record on MP3 and hear the detail; it’s impossible. The attention to detail on this record is remarkable. We can’t understand why record companies don’t go on the offensive and say what a great piece of kit CDs are. CDs are undervalued and sold in too cheaply.”

Asked if he believes they are devaluing music by making it available so freely, Hufford refuses to shoulder any blame. “We are not devaluing the music. If they don’t pay, it’s the fans who are devaluing it,” he insists.

Despite the possibility of receiving tiny payments per download, the managers say that they will be able to pay composer royalties and Radiohead’s publishing company Warner/Chappell the full mechanical royalty rate and still make a profit. “We are going to pay the publishers the download mechanical rate and we are easily going to be able to do that from the revenue we are collecting,” insists Edge. “Warner/Chappell have been fantastic; they have seen the plan, realised it was a risk, but seen that it was a plan worth taking a risk for.” By cutting out the middleman, he adds that the band will earn more in digital royalties than they would if the album was released through EMI.

Aware of Courtyard’s release strategy prior to the October 1 announcement, Warner/Chappell was quick to pledge its support, with managing director Richard Manners stating, “These new ways are iconoclastic in nature; they acknowledge the realities of a digital society and they challenge existing commercial assumptions. It is in this spirit that band and publisher are working together.”

Band and management are expecting strong sales of the £40 boxed set and have self-financed its production, with Clear Sound & Vision responsible for its manufacture and design, while the contents have been orchestrated by the Radiohead-owned merchandise specialist w.a.s.t.e. This company, which maintains a global database of 300,000 Radiohead fans, is also responsible for administering the inrainbows.com online shop and is a key part of the band’s release plan. The finished product is due to be shipped to consumers in late November.

“It means we can control the price,” says Edge of the discbox. “When a CD goes on sale its price is driven by the market conditions – we can’t control how much Tesco will sell it for, nor can the record companies. Labels have allowed retail to control them on that, especially the supermarkets, which is really distressing. I’m not saying that we have come up with a solution, but it seems to have a logic to it.”

Hufford and Edge say they are eager to support independent retailers and are looking at ways to supply them with exclusive material. “We definitely want to help independent retail. They like vinyl and the band love vinyl, so there are a lot of things we can do along those lines,” says Hufford.

“Both the band and us are so proud of this record, we want as many people to hear it as possible,” he enthuses. “The band are so excited; they are turning up to meetings full of ideas. With them in that kind of mood, who knows what could happen before the physical release in January? They could turn up with a whole pile of new material. It’s entirely on the cards.”

Aware that the venture could backfire, Edge remains nonetheless defiant. “The risk is that by the time we get the record in the shops in January, is there going to be a demand for it? We believe there will be. We might be wrong, but fuck it, at least we have had a go with an interesting idea.”

Traditional label backing crucial for album venture

Radiohead’s management forge ahead with negotiations with record labels and a physical release despite their moves away from the music-industry norm

Among the media hullabaloo surrounding the new Radiohead album, one fact seems to have been rather overlooked: that the band are, according to their management, on the verge of linking with one or more good old-fashioned record labels. Indeed, Hufford and Edge say that a decision will be taken on which label to partner with this week, adding that they have talked to all four majors and a number of independents, with Beggars, Domino and Pias understood to be on the list.

Further details are scant: the pair say the band are looking to sign three separate one-album physical licenses – for North America, the rest of the world (excluding Japan) and Japan itself – and reveal that most labels reacted positively to the band’s “pay-what-you-like” strategy.

“At the moment it is just the physical side that we need their help for,” Hufford adds. “In an ideal world we would like to get the deal done with all the different partners by the end of October.”

When it comes to names, however, the duo clam up. But with Hufford and Edge promising an “emotionally-direct” new album (they shy away from the term “commercial”), with Thom Yorke’s vocals more prominent in the mix, speculation about a new label is approaching fever pitch.

While in the US Courtyard is negotiating with three labels including ATO, among the contenders to handle the release outside America and Japan are two familiar names: EMI, the band’s home from 1991 to the release of 2003’s Hail To The Thief, and XL Recordings, the indie label that released Thom Yorke’s solo album The Eraser in 2006.

Neither party will say much about the possibility of signing the band. EMI, whose new owner, Terra Firma chief Guy Hands met Hufford and Edge for the first time last week, says that it continues to discuss future plans with Radiohead. Meanwhile XL managing director Ben Beardsworth will only speak of his admiration for the band.

“Through this groundbreaking example of experimentation and innovation, Radiohead have generated a huge amount of excitement and interest and I suspect that, as their plan unfolds, they have set themselves to eventually sell huge numbers of conventional copies of the album via conventional retail routes," Beardsworth says.

Although the band are clearly well off, selling copies of an album is clearly important to them. For although live and merchandise accounts for around 60% of their income as a band, the 40% contributed by record sales is more significant than for many of their peers because they do not tour often and do not allow their songs to be used to earn lucrative sync income.

Whoever the band – whose lawyer is John Statham of Statham Gill Davies – do eventually sign with, the deal is likely to be far from the music-industry norm. Hufford describes record companies as a “service industry” – “just like managers, agents and everyone else”.

And Edge says the band are not interested in receiving a large advance. “The start of the deal is not feathering the nest with a huge advance,” he explains. “Whoever our partner is will see a dealer price, they will see a royalty they have to pay and something left in the middle which is profit and marketing spend.

"They can work out how much they can afford to spend and together we have to make that work. Our aim is to incentivise the partner into doing the marketing. Areas like royalty rates – it is giving them an element of the royalty rate that is a lot more flexible. An idea that we have seriously talked about is doing it in reverse; the more records they sell the more they earn.”

"We want our partners to earn money,” Hufford adds. “We don’t want to rip them off.”