Moving the Tollbooth

Just in case you haven’t heard yet, the British band Radiohead is taking online pre-orders for their new album. That’s nothing out of the ordinary, except that they are letting the purchasers determine the price they pay — from 46 pence (45 of which is a credit card transaction fee) on up. Daring? Maybe.

Radiohead parted ways with their record label (EMI) when their contract ran out in 2003, which gives them the freedom to market their new music online without RIAA interference (or the UK equivalent, whose name escapes me at the moment). Considering that a recording artist’s cut of a retail CD sale is maybe 10%, and assuming a new-release CD goes for $18 (which is typical in the US, not so sure about the UK), then you’d guess that an average sale price of $1.80 average will net them what they would have gotten in royalties. Actually, we should account for recording expenses and hosting/bandwidth fees as well — but they're getting free promotion from everyone (including me) and I’m pretty sure that a $5 average sale price is going to put them ahead of the curve.

Yesterday, The Register interviewed Gerd Leonhard, a media consultant who is putting up his newest book, The End of Control, as a set of PDFs. According the the El Reg article, he writes lovely sentiments on his blog like “Another 12 months for this Radiohead experiment to become the default approach” and “move the tollbooth further down.” To be sure, the labels that comprise the RIAA membership are trapped in an old business model that worked well (for the executives, at least) for a long time — they will not be able to adapt quickly, and it’s just as likely that they will drive away their last retail customers with “piracy” lawsuits. Naturally, they will blame everything and everyone but themselves as they sink into the pool of irrelevance where the buggy-whip manufacturers of the early 20^th century are likely waiting to receive the first industrial casualty of the 21^st.

The recording industry is quick to remind us that they provide valuable services: production, promotion, distribution — and indirectly, with top-shelf acts (like Radiohead) subsidizing the up-and-comers. But when production is a matter of copying files to a server, and distribution is iTunes or eMusic (or services that wish they were iTunes or eMusic), what’s left? Promotion? When is the last time you heard or saw an ad for a new CD coming out? (Actually, I suspect that promotion these days amounts to paying Clear Channel and other giants to play selected tracks on the air, a practice known as “payola” and once frowned upon.) But I’m sure I’m not the only person who rarely listens to commercial radio nowadays. The last CD we bought was an act Daughter Dearest heard on MySpace. The next two CDs I buy will be from groups I’ve heard on streaming stations.

Leonhard says, “The real money is not in the CDs. It's in the gigs, the merchandising, the sponsorships. To make that money, you have to let people further down the highway before they arrive at the tollbooth.” But how do you get the people to the tollbooth? Thus, I still see a role for traditional music publishers: as incubators for new acts. Not nearly as lucrative as it used to be, partly because promotion is all they really have left to offer and they’ll have to actually do some of that promotion — including getting tracks into the hands of streaming stations and giving away some free samples.

Aspiring writers, unfortunately, only enjoy part of the potential that the Internet brings to aspiring musicians. Non-fiction writers, like Leonhard (or my day job, for that matter) can self-publish non-fiction to promote consulting or similar businesses… the book becomes a loss leader, much like a free music track, in the hopes that people will like what they read and pay for related services. But fiction writers, especially novelists, have it more difficult: as I’ve said before, people won’t abandon paperbacks until e-book readers with hi-res screens sell for $10 in the grocery checkout line. In the meantime, it’s a lot harder to print and bind a book than it is to burn a CD — and writers don’t have 10,000 people lining up to buy tickets to a reading.

But the Internet does, however, open up possibilities for new kinds of fiction. I humbly submit that FAR Future is one example: by the time I finished the story, and it wound its way through the publishing system and onto the shelves, it would be perhaps two or three years to 2012 instead of five, the writing would be on the wall, and the parts I guess wrong would make the whole story less believable.

But here’s the bottom line: can authors make a living publishing fiction online? and if so, how? I have an idea along those lines — but like Radiohead and their new album, it would likely work best with an established fan base.