Online Distribution

Bob Lefsetz, who is on a roll with this Radiohead story, says that the band should not be expected to know anything about the technical requirements of online distribution and should have gone with iTunes or Amazon who do. Bob says (can’t link yet because I got this in email and it’s not up on the web yet):

Maybe Radiohead didn’t want to align with iTunes because the band only wanted its music sold as an album, but then why didn’t they make a deal with Amazon, SOMEBODY WITH ENOUGH INFRASTRUCTURE!

That’s what Apple and Amazon do all day.  Fulfillment.  Rag on TicketMaster all you want, but believe me, it ain’t easy to process all those requests.  They ARE providing a service, however overpriced you might believe it is.

I agree with Bob’s first point. Radiohead should not have to know anything about server loads, bandwidth, etc. But I disagree with his suggestion that they go with Amazon or iTunes. Amazon and iTunes are intermediaries who will get in the way of your relationship with your fans.

There are ways to get online distribution without giving up the direct relationship with the customer. You don’t need Amazon or iTunes if you’ve got a direct relationship with millions of fans who will buy anything you come up with. What you need in that instance is a white label music distribution platform and there are a number of those if I am not mistaken.

Online distribution provides two functions, marketing and fulfillment. If you don’t need the first, then you don’t need Amazon and iTunes.

#VC & Technology

Comments (Archived):

  1. bernard lunn

    The disapearing chokehold that intermediaries have in the music industry is wonderful. I remember when John Peel in UK was the only guy who prevented bland mediocrity totally taking over and gave new bands an airing on his BBC show. Now there are so many ways to get that initial fan base and then who needs “da man”?

    1. anon

      I find it bizarre that people feel record lables add little value.

  2. vruz

    For those in the old music business, the Radiohead rebelion must be pretty scary.But… aren’t these guys trying out a new business model, possibly even creating a new refreshed industry, at a high margin ? (fans WILL buy the GBP 40 pack !!)It takes some principled people, and a lot of guts and smarts.How’s that for just a rock’n’roll band ?What’s in it not to like ? Oh sure… the old music business slacked for 10 years, kept milking the customers and now want a slice of the live gigs too…Rewind back to MUSICIAN magazine november 1995 issue, Jimmy Page and Robert Plant on the cover, and big white capital letters on a black background: IT’S THE END OF THE MUSIC BUSINESS AS WE KNOW IT.I’d say the old music business should be content with all the money they piled up in the last good 12 years, mostly to Britney Spears quality kind of work.Greed is good as long as you do something to earn it !!If Radiohead is right (and they seem to listen to what their fans want) they deserve to be rewarded mightly.They’re singlehandledy doing what the old music industry neglected doing for more than 10 years.Can’t wait to see variants of new business models and new record companies being created playing by the new rules.

    1. vruz

      For those who didn’t know Musician magazine, here’s what it meant to music back then:

      1. Ethan Bauley

        YES! That was an incredible magazine…I only got 8 or 10 issues before it was cancelled.

  3. Ethan Bauley

    Andrew Parker had a related meme going on his blog last week: “What is a software company”?My attitude is: if you’re connecting with your customers [transactionally or socially] on the web, it behooves you to “be a software company”There are white label services out there but they’re pretty dorky…What Radiohead wants is the Amazon Music API…waaaaaaaay white label.

    1. vruz

      now here’s a business model for Amazon, marrying S3/EC2 with their music distribution business.say like… application templates atop S3Bezos: you listening to the music ?

      1. Ethan Bauley

        Anyone could make this using S3 and EC2 for individual bands, because *the bands already own all their IP*.Bands still need another service to syndicate their music to all the other outlets, but you can swing that with IODA or Tunecore and Koch or Redeye.

  4. AdamD

    It would have been cool to see them go with someone like CD Baby, who has been helping independent bands sell their music for the last decade. Then, whatever they all came up with would be something that other bands could use. There’s talk of Radiohead changing the industry, but it seems like they missed a chance to have their change felt a little further.

  5. Brian Wolfe

    I think everyone is forgetting one thing. With iTunes or Amazon the customer can’t set the price. I believe that this was the primary goal of the Radiohead offering. Finding out what price customers are REALLY willing to pay for music. An analysis of price paid vs sales rates over time will be a VERY valuable piece of information after a couple of months to 1/2 a year of sales. It could very well set the standard for corporate controlled music pricing at existing downloadable music stores.

    1. Ethan Bauley

      Didn’t Amazon buy one of those “Choose Your Own Price” music startups?The answer is yes…Fred, anyone, remember what it’s called?

  6. Martin Edic

    Please don’t forget that Radiohead are not drug-addled musicians, they are incredibly skilled users of technology. Every new album is a departure on every level. It is naive to think these guys can’t figure out how to scale their distribution or hire someone who can.IMHO, this whole thread (why they should have used iTumes or Amazon) is an arrogant geek conversation that assumes that these guys can’t understand ‘our’ world- they’re brilliant people.

    1. fred wilson

      that’s my point Martin, maybe I didn’t make it very well

  7. fewquid

    Fred,I’m going to partially kinda-sorta disagree. They could have used Amazon. But it would have been Amazon S3, not Amazon the music store. And that’s quite an interesting idea… I wonder if Amazon would tolerate a white-label music distribution system built on S3???

  8. jackson

    I disagree with Bob, as usual.The concept of retaining some sort of relationship with their fans is surely secondary to the issue of control. I think there are enough smart folks in the Radiohead camp to figure this one out. Give ’em some time………..maybe 10 weeks 😉

    1. obscurelyfamous


      1. fredwilson

        how long has it been since I ‘gave 10 weeks” to disqus?it may be time to poll the readers again

  9. Ben

    The clue may be in the ‘advice’ section of the website. They mention a server called Xurbia Xendless. Xen is the server virtualization technology used by Amazon S3. I am guessing they are using something similar to cope with demand. Performing a whois on the IP block confirms the block is owned by Amazon. So hows that for smart 😉

    1. phoneranger

      Pretty.BTW Microsoft’s Halo servers were jammed last week as well. There’s no way RH should have put up enough bandwidth to handle this flood of 1st time RH fans. BTW2 does this album suck like the other ones did?

      1. Ben

        That’s my point. They are using Amazon EC2 and/or S3. I can see they are using it from the address of the server. It would be pretty brazen of them to have a fixed date for the release of the album and not have the bandwidth to follow through. For them, it’s just a matter of paying for the downloads. Even at 45p a download they are making money.

      2. Ben

        As for the sucking, it depends on what you mean by ‘suck’. If you mean socially aware, emotionally intelligent and technically adept then I am sure it’s going to suck ass. We will all have to wait for the release date, as they are not releasing any previews to anyone. Yet another reason why they will need proper bandwidth support. I suppose you could accuse Thom Yorke’s solo album of “sucking” in the more accepted sense of the word, but it may just have been “advanced” (as Chuck Klosterman might have said). I am not sure myself on that one.

  10. jackson

    I took Daniel off my hit list when I saw my username pop up.I think it wss less than ten weeks.Much like the puppy that followed you home, you can keep Disqus Fred, but YOU gotta feed ’em.

  11. Johnny Moxon

    I think we shouldn’t forget that band are a lot like start up companies. And the record labels are VC’s investing in the band- a lot of people out there saying we should cut out the record labels are basically saying the people who make the investment in the band shouldn’t reap the reward of their investment. I’m sure there is a better way.