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38% of Downloaders Paid For Radiohead Album
brajesh sends us to Comscore for a followup on the earlier discussion of Radiohead making $6-$10 million on their name-your-own-cost album "In Rainbows" — with the average price paid being between $5 and $8. Comscore analyzes the numbers: "During the first 29 days of October, 1.2 million people worldwide visited the 'In Rainbows' site, with a significant percentage of visitors ultimately downloading the album. The study showed that 38 percent of global downloaders of the album willingly paid to do so, with the remaining 62 percent choosing to pay nothing... Of those who were willing to pay, the largest percentage (17 percent) paid less than $4. However, a significant percentage (12 percent) were willing to pay between $8-$12, or approximately the cost to download a typical album via iTunes, and these consumers accounted for more than half (52 percent) of all sales in dollars."
did they make more or less profit than what they would have made with the standard sales method?
I really don't think it's fair that Radiohead is just giving it away over the internet... Record companies put in a lot of hard work and effort to make a band successful, and I think it's really dishonest to just cut them out like that.
Perhaps its time the government did something about it, before the record industry starts losing even more revenue and therefore jobs.
Got radio head?
Listen, Fred:
RF containment
Could leave you dead
Drop the insulation
And broadcast, instead.
Burma Shave
Get thee glass eyes, and, like a scurvy politician, seem to see things thou dost not.--King Lear
One thing this didn't account for was advertising. A band that big probably had a huge advertising budget in their past that they no longer had to worry about because being the first ones out of the block, they caught a bit more press on the Internet. There were probably a number of new radiohead fans that were made because of this that will come back and buy future CDs. They might have taken a hit financially, but I think the payoff is going to be bigger in the long run.
After all is said and done, how does that compare to the standard take of the band's share? Typically $1-2 per album sold right? Sounds like they made out pretty well.
at 6-10 mil this experiment work. Radiohead made more in album sales via download than they have on other albums. Plus this does not included what they will make in storefront sales.
How many of those were people who downloaded it, gave it a listen and then went back and paid for it after they decided it was worth some cash.
What is google? What is the slashdot search box, even? If you expect each story summary to give you a background on every term or group it includes, slashdot would be a pile of shit.
Well, of course, it culd be that not all the users are keeping the program, they may be testing, etc... but I am counting the hits that the server register from the same address within a month... So the program has being used a month more or less....
So judging by that, music consumers have a more happy pocket than software users.
It's time to realise that Abble's products are the biggest abomination these days. Just say NO to the dumb iAbble way!!
For example, if I divide it in to two groups: those who paid less than $4 and those that paid more than $4, you could say that the largest percentage (83 percent) paid MORE than $4.
Lies, damn lies.... and terrible journalism.
A slashdotter who didn't build his own computer is like a Jedi who didn't build his own lightsaber.
The varying statistics of user behavior (from the degrees of payment to none at all) make a strong point Against RIAA's studies, which are used to determine the size of the damages they wish to seek from defendants of illegal downloads.
...And with all the free publicity, EMI (their old label) has decided to cash in-- selling their back catalog on a USB drive that retails for TWICE what the CD box set costs.
That pretty much explains the music "industry" in a nutshell.
The theory of relativity doesn't work right in Arkansas.
drudgereport.com is a right-leaning website frequented by media execs
you see the very first story linked as:
"Most Fans Paid $0 for Radiohead Album..."
(breitbart is a right-leaning media outlet as well)
ps: right now being 4:15 pm, 11/06/2007
what's funny is how a pro-file sharing website, like slashdot, can spin a positive out of the numbers, and an anti-file sharing website can spin a negative
spin, spin, spin
just my two cents: radiohead probably made more money off their album with this internet tip jar concept than if they signed with a label, considering how the companies nickel and dime artists to death. actually, radiohead has some clout, so maybe that's not 100% true. but rather, an unknown band would DEFINITELY make more money with free albums and an internet tip jar than signing with a label
hopefully more and more bands will realize this, and a critical mass of hot young bands will coalesce such that one will consider doing business with the defunct music labels ever again
then the RIAA attack dogs will sue up and coming artists to sign with the music labels? (half-joking, i wouldn't put it past them)
intellectual property law is philosophically incoherent. it is your moral duty to ignore it or sabotage it
We'll only really know the full impact of this if/when other acts start doing it. I don't really like Radiohead, but I threw them $5 just for shaking things up in a good way. Still, it's obvious most people who bought this album were Radiohead fans. The real question is, how much further will this distribution model go if/when other major fanbases are given the same chance?
Slashdot Burying Stories About Slashdot Media Owned
Either that or many people wanted to use this opportunity to make a point against the recording labels, and the results would be different if this became a standard practice.
For some reason, I'm inclined towards the latter.
The AACS key is NOT 0xF606EEFD628B1CA427BEA93A9CA9773F
Hmmmm.
Three cheers for Radiohead, at any rate.
"None are more hopelessly enslaved than those who falsely believe they are free." -- Goethe
Of those who did not pay anything, how many would have purchased the album if it had not been available for free download? Between that, and the minimal compensation from a standard record contract I'd call this endeavor a success. I also think that if this model took off there might be more of a social push to encourge cheapskates to support the bands they listen to.
I don't believe in karma, I just call it like I see it.
How many people downloaded and paid for it on one machine and then decided to download it to another (at work, on a laptop in a hotel, whatever)? There are several things online I end up downloading countless times because it's easier to get it off the net than it is to keep everything on me.
Either that, or many people wanted to use this opportunity to make a point against the recording labels, and the results would be different if this became a standard practice.
For some reason, I'm inclined towards the latter.
The AACS key is NOT 0xF606EEFD628B1CA427BEA93A9CA9773F
ANTI records which has some pretty big names pays 50%, does promotion and distribution but doesn't cover recording costs.
I've been an avid Radiohead fan for years now, and when I saw this I was delighted someone had stepped up and realised the change in the state of the music industry. I paid 5 quid for it, and I did so to say "good idea, I'm willing to pay" and I don't regret one penny of it.
Kudos to Radiohead, and I hope those fat cats at the RIAA and related Music Labels take heed.
ilovegeorgebush
You can spin the numbers any way you want...
17% paid less than $4? Well, that means that of the 38% that paid, 21% paid more than $4. What does $4 have to do with anything at all? It is a completely arbitrary number.
The numbers that would be important are:
Of the 62% who paid nothing, how many of them would have bought the disc at retail at launch?
Of the 38% who paid something, how many of them would have bought the disc at retail at launch? How much more / less did they pay than if they bought it at retail?
Not to mention that they will still sell physical CDs, which they stand to make more money off of.
Or was the website strange enough that I was inherently unwilling to give them ANY of my personal info, let alone my CC number?
I like the band, and I am willing to wade through any number of website disasters that reflect a given bands 'taste'. But when it comes to giving my money to someone I'd like something nice, normal and boring.
But that's just me.
A lucky band might get a deal whereby they are paid 15% of revenues *after the record label recoups it investment*. Costs to be recouped can include nearly anything: secretaries, fat cat lunches, photography and printing costs, air conditioning, parking, coffee. You name it. Perhaps most importantly, the label has to shell out a pretty hefty percentage of revenues to the distributors and manufacturers whether they be a disc manufacturer or iTunes.
My band had a record distributed through V2 records and I believe our tiny label was *supposed* to get paid about $2 per record. Despite selling a few thousand records, we never got paid a dime because they claimed they didn't recoup the cost of their sales department selling our record to Target, Best Buy, etc.
I'll admit my band isn't as popular as radiohead, but let's do a little arithmetic. Suppose radiohead sells 1 million copies of their record at $20 a pop. That's $20 million dollars. Let's further suppose they get an extremely generous (nay unheard-of!) deal whereby they're paid 20% of gross after the label recoups their 'investments'. Let's suppose they get an amazing distribution deal that only siphons off 10% of gross revenues. Hell let's go crazy and assume that the record label doesn't expect to recoup anything and pays radiohead their percentage from the first record sold.
20% of $20 million is $4 million
take 10% of that and give it to iTunes and that leaves $3.6 million dollars
I'd bet my right arm that radiohead have made out like bandits on this.
For some interesting reading on the crooked record business, I would suggest Donald Passman's book All You Need to Know About the Music Business
Yeah, what is google?
(types google into wikipedia)
Ahh, I see!
Education is a better safeguard of liberty than a standing army.
Edward Everett (1794 - 1865)
I tried to buy the album from the US, my bank declined the charges. When I called them to find out why they said a lot of fraudulent charges come from that part of the world and would not allow me to buy the album. How many of the folks who didn't pay for it actually "couldn't" pay for it?
It would appear the spread was:
$0.00 : 62%
$0.01-4 : 17%
$4.01+ : 21%
Why four bucks is some magic number to someone, who knows. If broken in to equally as arbitrary but halfway sensible thirds, I'm sure it would look something exciting like:
$00.00-00.00 : 62%
$00.01-05.00 : 12.6%
$05.01-10.00 : 12.6%
$10.01-15.00 : 12.6%
But, that would make for a terribly boring PowerPoint presentation.
They were the band that laughed at Scott Tinnerman.
Except for ending slavery, the Nazis, communism, & securing American independence, war has never solved anything.
Site Usability The website where you buy/download the albums is REALLY hard to navigate and understand. They don't even make clear that you set your own price. Had I not known beforehand that you could set the price, I would've abandoned the site because it looked broken.
Can't Purchase After Download If you download the album for free (like I did), but then decide you like it and want to pay for it, YOU CAN'T! Basically they let you have one download per email address. So unless you have another address handy to use the second time, you can't retroactively pay for your first download. That's just silly. Of course some of us want to decide whether we like it or not before handing over some cash, so this is a significant feature flaw.
So given these two significant things were hampering sales of the album, I'm actually pretty optimistic about the model. The next artist that does this and gets the site experience right and supports a "delayed" purchase, will make even more.
I wonder what is the overlap between the percentages, I mean some people could not pay anything, decide they like the album then come back to the site and pay for the download.
\u262D = \u5350
It's easy to sell things when you're already famous. That's what the record labels do: they make you famous. They put you in record stores and on the radio.
So I don't really care who downloads the albums of famous people. There are plenty of brilliant bands out there who you've never heard of and won't download their albums even when they give them away (and they often do).
Yeah, a bunch of famous people got in the newspaper and made a bunch of money off of it. Big deal.
So promotion is a bad thing? Oh wait, it's only bad when it's music -you- don't like.
Yes, that could inflate the numbers of non-paying customers.
I downloaded it for $0 too, and it didn't appeal to me at all. I wish I could "un-download" it, i.e. delete it from my hard disk and decrement their "$0 downloader" count.
Here
Results to Date
70 downloads
5 donations
% of downloaders making a donation: 7%
Smallest donation: $2
Largest donation: $12
Average donation: $6.80
As a poster suggested to me in the last thread about Radiohead, I'm not going to quit my day job.
There's a big difference psychologically between:
Putting up a free download link, and having a donate button
OR
Having an order form that explicitly lets you type in $0 for the purchase price.
Your method will not work because the audience at large feels no obligation to to "donate". Radioheads makes you feel like you ought to pay something, even if it's minimal. Those 62% must feel really bad about now, unless they didn't like the music, in which case they probably appreciate Radiohead for not charging them.
How many people paid THIS TIME to prove a point to the RIAA...and will pay little or nothing next time, or the time after, or the time after that?
Do you really think people will continue to pay $10 for something they can get for nothing? Neither do I. In the end, this incident is a gimmick with no sustainability.
"In this scenario, they're responsible for all the marketing, recording, and distribution costs. In the scenario where they're getting $2/album they don't have to foot any of those bills."
Huh? Typical music contacts often give you a set amount of money for a record and then X$ per CD, they then charge you for marketing, recording and distribution. so often an artist will come out ahead only if they sell X number of CDs to make up for those charges.
I think marketing/distribution was quite cheap for this one...
No sig today...
If every user expected every /. article to contain hyperlinks to define every little word larger than two syllables, the it would indeed be a pile of shit.
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Just a request, so that we can more clearly see the Slashdot crowd's impact... could you post an update to your stats in... oh... 12 hours?
>> Standing on head makes smile of frown, but rest of face also upside down.
If Radiohead did not have record labels such as "XL, ATO, Parlophone and Capitol" marketing them or in essence providing seed funding/capital, would Radiohead have had the ability to make a name for themselves in today's internet era? My band gives away their music for free and do you think KROC in LA would tell the world that my band gives away our music for free? Nope. Radiohead was taking advantage of the marketing that had already been done (and yes they paid for it with the labels taking their cut of Radiohead's work).
So how could you market your music? Mail CDs to the radio stations, doubt it. Battle of the Bands, local gigs, works fine but takes a while to build up a non-regional following, and even that might not lead to radio play. So you're still left with word of mouth.
and this is where Radiohead cheated. Their word of mouth was spread via the mass media. I heard about it on not less than 3 radiostations. Radioheads "Can we get people to download something for free?" is not much different from a local ice cream shop offering a free scoop on their anniversary. Since the ice cream is free, I'll give it a try even if I normally don't eat ice cream in February. Sure I might return one day and purchase some on my own, or maybe i'll never go back there.
While I envy Radiohead's experiment on downloading free music (or name your price), I think it would be far more interesting for a study to be done on the viability of the thousands of bands which do not already have an international following of giving away their music.
Steal? How can it be stealing, given that the author allowed them to download the album for 0.
Stating this, also is a broad generalisation : this proportion could be split up in many categories (thieves, curious about the music which did not like it afterall, curious about the process itself, etc...)
It would indeed, be interesting to see the account per country.
May I use your sig please?
No, you absolutely must look at the total, because that's what ultimately matters: the bottom line.
You can't go by the percentage because you don't know what they would mean in other contexts. All this says is that 12% of the total downloads came with a payment competitive with download services given the option of not paying at all. This says nothing about the number of downloads that would have been made at typical download service prices if there was no choice but to pay that price.
How many fewer downloads would there have been if it was a mandatory payment? How many of these downloads were from people who would have never downloaded the album at typical prices? How many of these downloads were from people who were not willing to pay for an album they had never heard, but after downloading it for free decided it was worth their money and paid for it? How many were people who had already paid but were now downloading a second or third copy for work? How many were from people who would have paid typical prices for the album, but instead happily downloaded it for free?
We don't know, and we can't know, because we have no way of converting the figures about downloads into figures about individuals. So how do you figure out how all these various factors turn out? If we can't put a number on each individual factor, can we at least find out how the add up together to give an overall picture? Yes. Yes we can. With total income.
The most definite fact we have about this is that Radiohead pulled in a high-seven-figure gross in a short period of time.
So however all these factors we're discussing about human behavior shook out, it resulted in a hefty pile of cash for Radiohead.
Hard to say that doesn't look good. It would be nice to compare this to Radiohead's (not the record company's, but the band's) income from previous albums.
The enemies of Democracy are
It is receiving oral sex while relaxing and listening to the radio.
Record companies often SCREW the bands on contract.
Dude, producers, sound engineers, and all those folks don't all work for the record companies.
Front money? How many record company contracts have you seen? And how much does a record company actually advance on royalties for anyone but a superstar?
Marketing: yes, that's true. Of course, it's less true now than it was fifteen years ago. Fifteen years ago, there were record stores, and people actually listened to the radio. Well, they killed record stores, and nobody listens to music on the radio anymore anyway.
Record companies are only now getting into the tour bus business, because that's the only part of the industry making money. That is not traditionally what record companies do. That's what band managers do, and for most recording artists, that's still what managers do.
Top-of-the-line instruments? Dude, you mean like Nikes and stuff?
So, no, I say your understanding of the music industry clashes with mine. But you do point the way forward: out of the hands of old "CD and lawsuit" companies and into the control of groups and individuals (within the current record companies, or outside them) with influence on the market as it currently is. And, with the internet, it currently is more segmented and more regional than it's been in a long time. Radio DJs are all but irrelevant; MTV? When was the last time they showed music? And yet the record companies still insist on making $2M videos? The current arbiters of music fashion and taste are those people who've been supporting recorded music since its advent, but have never been under the control of the music industry: your buddy who makes the mix tape, the club DJ, your little hoodrat friend who's been "saving it for the scene". The "industry leading" recording studios aren't worth it for most musicians: they can get a "good enough" job done in someone's house in the Meadowlands. The "music people" and their cocaine only harmed Rock-n-Roll to begin with.
So no, the Reagan 80s were not a glory period for music. As the saying goes, I survived the 80s one time already...
Don't forget about people who downloaded it for free to check it out then later payed for it. I'm curious how many of the free downloaders did that.
We hope your rules and wisdom choke you / Now we are one in everlasting peace
Well, I really like the album. The songs are accessible enough to enjoy on the first listen, but detailed enough to still be interesting on the tenth listen. It's an album to listen as a whole: there is no megahit on this one, but no fillers either.
You could download it for free, listen to it once and then pay whatever you think is a fair price. Or you could take a gamble and pay between $5 and $10 (there's 10 tracks). It's up to you.
You have no clue about the music business. Try again
"When I first heard Daydream Nation it quite frankly scared the living shit out of me." -- Matthew Stearns
I considered putting a Democrat link instead of a Republican one, but ultimately decided against it. The Democrats could never get organized enough to form one pile. Therefore, I stand by my original post.
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Nope. Many of those bills are recouped out of artist royalties. Marketing is usually split, often 50/50, recording is almost always 100% recoupable as are all other production costs (artwork, travel expenses, the time of the label personnel that were involved -- and some that weren't, etc.) and distribution costs are taken off the top before artist royalties are calculated. Distribution costs are also artificially boosted in various ways, to minimize the artist royalty.
My favorite technique is "breakage". See, back in the day of shellac records (before vinyl!), records were very fragile and lots of them got broken during shipment. Rather than address the complexity and fraud opportunities of getting retailers to report how many records arrived broken, the labels just offered to take 10% (IIRC) off the top for "breakage". This discount was also applied when calculating artist royalties, obviously. When vinyl was introduced, this structure was retained, even though breakage almost completely disappeared. When 8-track tapes, cassette tapes and then CDs came on the market breakage simply didn't happen any more, but the structure was retained. Along the way, the labels renegotiated their contracts with retailers and removed the breakage discount on the -- quite reasonable -- grounds that it didn't happen any more and when it did the shippers were responsible. However, they *still* apply the breakage discount to artist royalties. Nice, huh?
Note to ACs: I usually delete AC replies without reading them. If you want to talk to me, log in.
Rather than stealing I think this is a very interesting glimpse into a post-scarcity economy.http://en.wikipedia.org/wiki/Post_scarcity
The most interesting thing about this is that while 60% of the people paid nothing, the band still made more than they would have under the old method. Perhaps we could do this with the food we currently pay farmers not to grow, give away staples like rice and flour for "pay what you want".
We are all just people.
That's how with the RIAA style creative accounting a band can have a certified platinum album and never recieve a royalty check.
TFA seems to be comparing Radiohead's model to iTunes and traditional record sales, which is a bit confusing. Given that it doesn't take sales of the disks into account, the only fair comparison would be strictly between Radiohead and iTunes/<your_favourite_provider_of_lossy_compressed_files>. On those terms I would be surprised if this new model isn't hugely more profitable for Radiohead and cheaper for consumers.
If you take a different view of their model and consider the downloads to be predominantly promotional, they have more than paid for their promotional material before the actual product even ships. They have also made more than enough to pay for pressing upfront as well as any further promotion.
While a lot of the recent publicity is generated by novelty, I think online busking is an excellent long term method of promoting quality recordings.
The disc sets sell at 40 pounds each, from which they have to pay for pressing, printing, handling and shipping. I don't know what it's like in the UK, but I know locally 40 pounds (~$A90) would easily cover those costs for runs as small as 1000 and internationally they will probably sell a lot more than that. Radiohead has elimitated the risk of over-producing discs by offering a pre-order model and they don't have to give 98-99% to a record company.
I don't think TFA can make sensible analysis until after the discs ship. It's definitely an interesting model.
I don't therefore I'm not.
But they saved on lawyers fees because they didn't try to chase down housewives and drag them through lengthy legal battles.
Not to mention probably the best PR money can buy.
Let's hope this raises the bar.
These payments are anonymous. Tipping is not. I bet a lot of people wouldn't tip if they could do it without showing their face...and then, of course, restaurants would finally move away from our stupid tipping system itself.
In anonymous situations, many people are jerks. How often does someone cut you off when driving? How often does someone barge in front of you in a line at a store or restaurant. What is the difference? Anonimity.
The ever classic article from Courtney Love goes over the whole scheme:
http://archive.salon.com/tech/feature/2000/06/14/love/
Thom Yorke of radiohead produced much of his recent solo album on his laptop while riding around in a bus.
This space available.
I "purchased" twice (first for free, then I paid $8) but only downloaded once, figuring that they're probably paying for bandwidth.
"Scud Storm!" -- Jeremy of PurePwnage.com
I'm not sure that would be a good idea. There is a critical difference between staple items like rice and flour, and goods like digital media. A person has no reason to take more than one copy of the digital media, but plenty of reasons to stockpile an exorbitant amount of the staple items (save for later, take more than they would ever use and sell it, etc). It's the same idea behind newspaper and soda vending machines--you can feasibly take as many newspapers out of the machine as you want once its open, but theres no reason to take more than one (unlike the soda, where if the machine just opened up instead of dispensing one it would be empty *real* soon).
I decided to stop stealing cynical quotes to use as a signature line.
Whoa; Completely wrong.
Did they 'break' when they were vinyl? No. BUT, I worked for major chains, pal, and the automatic returns system (accounting) was valid because an enormous number of records ended up as returns. You have no idea what you're talking about. Big stores usually had staff whose sole purpose was to validate returns. The main cause of the returns? Warpage. And the reason for that? Two things: Thinner LPs, with less actual vinyl, and the killer cause: The major labels never veered away from tight 'shrink-wrapping', which, in combination with the standard 60 LPs to a box in trucks with higher heat... equaled Warp City.
On big number pressings, where sales were easily predicted at hundreds of thousands of units, the returns could hit 15-20% easily in Southern California, which makes the notion, that the "10% breakage" policy was an unnecessary artifact from the past, all the way wrong.
I worked, briefly, all over Southern Cali, for WEA, doing Inventory, and part of it was dealing with returns. Did the labels mitigate some of the loss as part of overall contract strategy? Sure. But a mitigated LOSS, is still a LOSS. And trust me, when we shipped X number of units we wanted wholsale times X back. Nobody wanted to lose shit, mitigated or not. That's Business 101. Nice paranoid try, though.
Sorry if I sound harsh. But I hate the way the labels have treated artists and the fans. I always have. But we can expose these people, and their methods by stating the facts and telling the truth. It's not valid to get the facts wrong in pursuit of any 'point' one is trying to make. I hated the 'returns' thing, back in the day, because it was simply more evidence of the cheap-assed cynical methods that were being employed and 'perfected' before, during and after my stint in that part of the biz, before I went back to 'just' being a working, touring musician.
I like what's happening here, but I agree with an earlier poster that this is more of a "fuck you" to the recording industry than a genuine indication of the viability of the model. It probably won't last. Artists need a way to ensure they get paid, while still embracing this whole consumer-friendly mentality. Here's how I think they can:
The artist signs up with what I will call "The Company". They complete their musical work. They release a song or two, or snippets of all of them. These could be played through The Company's website, seeded via bittorrent and other p2p protocols, or made available on a client in a way similar to the existing itunes store feature which allows track previewing.
The Company would use an algorithm - based on traffic to these various distribution channels, visits to the artist's myspace page, maybe even frequency of google searches if they'd be willing to make that data available -- to estimate consumer interest in the music. This would be used to determine a dollar amount that the public would likely pay for the music (a total, not an individual price).
With this figure in hand, The Company would set up a webpage where donations could be pledged. Credit card information is given, but no payment is taken until the total money pledged reaches the previously determined figure for predicted revenue (which should probably be made public, but I don't really know). When the figure is reached, all amounts pledged are withdrawn from the pledgers' credit cards. At this point, the music is made available to everyone, through bittorrent, and perhaps the itunes-style client I already mentioned. Pledgers are notified, and perhaps receive priority downloads, but the music is available to everyone. It spreads on its own, and nobody gets sued. The Company takes an eensie weensie cut to cover bandwidth costs (I imagine this as a non-profit entity). A "tip jar" type of business model could then take over to collect the donations of any conscientious consumers, but I would hardly expect this to generate much revenue.
It's not a very sophisticated plan, I suppose, but I've been mulling over it for a while and I just have to know what slashdot thinks. If some entity with enough resources, like google for example, really worked the idea over, I think there's potential.
P.S. if the RIAA patents this tomorrow I'm going to go totally fucking banana fudge sundae.
In the scenario where they're getting $2/album they don't have to foot any of those bills.
Reality is much more complicated than that, and in fact unless you're already a mega superstar you're not going to get a very nice deal.
First off, $2 royalty per album is quite generous for an emerging artist signed on with a traditional record corporation. Second, the record execs hardly foot any of the bills at all--at least not directly. Promising artists are awarded "advances". Basically an advance is a loan of sorts--it provides money to spend putting together and promoting your first albums, when you aren't generating any revenue. When your album is released you commonly get severely reduced royalties...or none at all...until the record company has recovered its investment in you (the advance).
Some other points to consider in terms of "new media" on the internet:
* marketing requires a much lower monetary investment these days--time and creativity are more important
* in order to get a deal with a record company you have to have a demo tape--generally you've already spent a lot of your own money on recording songs.
* distribution over the internet is very low cost
So, the costs to distribute an album online are much lower than the $10, $15 or more that is the difference between what the artist gets and what consumers pay for one copy of the album. It seems to me that Radiohead has done quite well here, getting revenue into the millions from one album sold on a name-your-price basis. This is just another sign that the business model of selling little plastic discs with songs made by artists held captive in a studio-system environment is obsolete and trying to make the same model work on the internet is futile. The commercial music industry is like the motion picture industry, except even more backwards, modeled after the way studios did business in the days of Gone With the Wind and Wizard of Oz. Because of that, it'll be quite a sea change that will make for very noisy lobbying.