Radiohead - practicing disintermediation with their new album - King of Limbs

A few years ago Radiohead adopted a very interesting pricing and distribution strategy for their album In Rainbows. Consumers could choose their own price and download it directly from the website owned and controlled by the band.

Stories vary as to how much money was made - numbers of sales, average price paid etc, but what was undeniable was that per copy, Radiohead were receiving a much greater slice of the pie than for the traditional model of reproduction and distribution on physical media - like a CD.

How so? Costs not being incurred - burning and shipping discs - but also because Radiohead cut out many of the intermediaries in the supply chain. Record label, manufacturers of discs and jewel cases, distributors and of course retailers. The curse of the 'content producer' like a music band or the drudges that produce textbooks is that only a small percentage of each sale makes it to their bank account - all the other parties get paid, and often by a multiple factor when compared to the artist. Retailers would historically do much better from a book or album than the people who created them.

Radiohead have realised that these other parties are no longer useful or necessary - and that they can keep a much larger slice of the pie by disintermediating their supply chain. The prices are now fixed, but the same model is being used for their new album - King of Limbs.

Not everyone has gone - Radiohead still have financial intermediaries to move money about, and there is probably a technical and legal team supporting the website - but the vast majority of the cash is now going to the band and not the middlemen. Good for them.

Could a new band do the same - with no fame and reputation - we might say brand? Difficult.