Making Online Pay

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On the site you can also buy the physical version of In Rainbows: a box containing the new album on CD; the new album on two long-playing vinyl records; a second CD with more new songs, photographs, and artwork; an artwork booklet; and a booklet of lyrics. Plus, the download is thrown in as a freebie. The artwork is by Stanley Donwood, Radiohead's longtime collaborator. The boxes are priced at £40 ($85), including postage, and they will be shipped around Dec. 3.

Experimental Business Model

Radiohead is going off-label, letting people download their music for as much or as little as they want (without copyright protection) and then offering, for a high price, a sophisticated and unexpected (the vinyl) multi-item package that borders on being a collector's item. The off-label part is not a real surprise, since their contract with EMI expired after their last record in 2003. Many thought that their next album might be released through iTunes or other established online music stores. That they would skip even that step and go solo, directly to fans, that's the surprise.

The business model here is a matter of pure experimentation, but it challenges most aspects of the current music industry model. By giving away digital music, the group is turning it into a loss leader and hoping that it will boost the sales of the boxed set and of concert tickets (the concert business, by the way, is booming).

Cutting Out the Middleman

Radiohead seems to be adhering to a statement given to Time magazine by lead singer Thom Yorke a few years back: "I like the people at our record company, but the time is at hand when you have to ask why anyone needs one."

Their approach is likely to work well for stars with name recognition and huge fan bases. A few months ago, the singer Prince gave away his last album as an insert in a tabloid newspaper in Britain. The music industry and store owners protested, but the move certainly helped him sell out all of his 21 London concert dates.

But it may take longer for the music industry to work out the ramifications of these innovative approaches to music distribution—as a whole—and for younger, upcoming artists. For now, go online, name your price, and enjoy the music.

Bruno Giussani is a Swiss writer, tech entrepreneur, conference host and the author of "Roam: Making Sense of the Wireless Internet." He blogs at http://www.LunchOverIP.com. For BusinessWeek.com Giussani writes the monthly EuroScan column, discussing innovation in Europe.