Maybe you don’t know what a Radiohead is but you can bet your children do and moreover they have probably recently made a rational economic decision on the value to them of the band’s most recent album. Why is this important to book publishers? Well directly perhaps not so much, but the indirect impact of what Radiohead announced last week will be significant to all media including publishing.

As an established band, Radiohead have a large existing fan base and they are taking their music directly to this fan base by releasing their new album via download at whatever price the fan wants to pay. If the fan believes as stated by one of them, that the band is ‘rich enough’ they can pay 99cents for the entire thing (they could get it for free) or they can pay a traditional retail price of $12.95. Whatever. Radiohead receives all the revenue rather than having to split a fee with a recording company. Suddenly, after nurturing and investing in Radiohead over the past 10 years there is no longer a place for the record company. Is this fair you wonder? The question really doesn’t matter because the old model of artist development is dead.  Music companies are going to have to create a new model where reliance is not so much on revenues derived from recordings but shared across the pantheon of revenue opportunities from merchandising to touring to music publishing. The transition will be brutal for both the artists and the recording companies.

Radiohead finished recording their new album only 10 days before they released it via their web site.  Fans have two product choices: They can take a download and pay what they want or they can have a download and preorder a traditional CD and book package. The latter will be release in December. I expect that despite the availability of the download many fans will either buy the CD package initially or return later to buy it. Radiohead are likely to make a pile of money from this model both because of their fan base and due to the publicity that the action has generated. Typically a band would make more money touring than they would from CD sales mainly because their cut of the full retail price is so small. It is because they have so little to lose and that they want to get people to come out and see them that more bands will elect to forgo CD royalties in order to build tour revenues.

Back to publishing. What happens when John Grisham or Stephen King decide to forego a publishing contract and go direct? Well the truth of the matter is that it is already happening. Remember The Long Tail? The book was available for review and comment online long before it was finally published and this not only helped the author fine tune his argument it increased publicity for the printed book. There are other examples and the model will become more prevalent where authors either independently or with a publisher’s collaboration will allow free or discounted access to books both before and after publication.

The economic model may be less different between music and book publishing than is first thought. Related revenues in music come from merchandising and touring and in book publishing they can come from movie, tv, merchandising, and rights. Point is in both cases artists and authors and publishers and producers will increasingly be looking at the totality of revenue opportunities rather than in narrow terms. This could lead to some interesting new collaborations: the screen writer that signs a book deal with a movie producer, the musician who signs a CD deal with a book publisher, or the author that signs a deal with a tour organizer. To some degree these models are starting to become more apparent and as publishers we will need to think more creatively and in collaboration with the authors we publish so that we can remain competitive in an environment where the traditional boundaries are being eroded.

Posted by: Michael Cairns, Information Media Partners