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from nytimes.com

Radiohead Finds Sales, Even After Downloads
By JEFF LEEDS
Published: January 10, 2008
LOS ANGELES — In a twist for the music industry’s digital revolution, “In Rainbows,” the new Radiohead album that attracted wide attention when it was made available three months ago as a digital download for whatever price fans chose to pay, ranked as the top-selling album in the country this week after the CD version hit record shops and other retailers.

The album, the first in four years from the closely watched British rock act, sold 122,000 copies in the United States, according to Nielsen SoundScan. That represents a mixed result for the band. It’s a sharp drop compared with the debut of Radiohead’s previous album, 2003’s “Hail to the Thief,” but it’s far from a flop, considering the steep decline in music sales in the last four years and the typically weak sales in the post-Christmas period. “Thief” sold about 300,000 in its first week in 2003.

In any case the figures challenge the conventional wisdom that music fans no longer have an affinity for plastic. The sales of the album, which also snagged the top spot on the British weekly music chart, came despite the fact that “In Rainbows” — in the form of digital files — had been acquired by many fans after the band offered it in an unconventional pay-what-you-want offering through a Web site, inrainbows.com. The album was released on plastic CDs and vinyl LPs on Jan. 1, with the CD priced at $13.98, though it could be found for as little as $7.99 at outlets like Amazon.com.

Some retailers viewed the Radiohead figures as a sign of the continuing market for so-called physical products in the music business, where the popularity of iTunes, music blogs and other sites have made the digital file appear to be the coin of the realm. In particular they said even fans who received the digital files distributed by Radiohead may have decided to pay for the better audio quality versions on CD or LP.

“Having a physical, archival high-fidelity master recording that you can side-load into your MP3 player of choice for a similar price is significantly better than just purchasing zeros and ones,” said Eric Levin, owner of the independent record shop Criminal Records in Atlanta and founder of an 18-member alliance of independent retailers. “I feel like that’s what 75 percent of the people are saying.”

Mr. Levin said that at his store vinyl copies of “In Rainbows” outsold the CD by a wide margin. Demand for the album was such that some record shops put it on sale before the label’s planned “street date,” resulting in sales of about 9,000 copies the previous week.

But sales of the plastic and vinyl versions of the album also received a boost from digital services like iTunes, where the album sold about 28,000 copies. The iTunes service, which sells individual songs for 99 cents and albums typically for $9.99, had not carried any of the band’s previous albums, owing in part to Radiohead’s demand that its recordings be sold only as complete works.

But Bryce Edge, one of Radiohead’s managers, said the band decided to sell “In Rainbows” on iTunes because it expects that EMI, the British music giant that released the band’s first six albums, will soon post them for sale on the service, and it would be strange for the new album to be excluded. An EMI representative declined to comment.

The decision to release the music as a digital file so far in advance of the CD also allowed time for the music to circulate on free, unlicensed file-swapping networks. Big Champagne, a tracking service that studies file-sharing, estimates that the album was downloaded more than 100,000 times on free networks in the first 24 hours after Radiohead delivered it to fans who had preordered it from its Web site. But Eric Garland, chief executive of Big Champagne, said that by offering the music for as little as zero from their own site, Radiohead “stole market share” from pirate networks.

Mr. Edge said that sales of 100,000 copies of the album this week would be “almost certainly less than the number we would have achieved if we hadn’t” offered it as a digital download. But the band still came out ahead, he said, in part because it attracted so many fans to Radiohead’s Web site, where it collected e-mail addresses from fans looking to acquire the album.

The band has not said how many copies it distributed. Now that the CD is in shops, some fans who paid for the initial downloads may have been tempted to buy the album, in effect, for a second time. But Steve Gottlieb, chief of the independent label TVT Records, said he believed the sales mainly reflected fans who were acquiring the music for the first time.

“Radiohead is one of those really big groups that appeals to people outside the intensely pirating demographic of 16 to 29,” he said. “To the extent Radiohead still has a significant audience in its 30s and 40s, there’s a bigger audience of those people who will still pick up something at Best Buy or don’t want to bother with figuring out how to go to a Radiohead Web site and track it down.”

Still, Mr. Gottlieb said, the sales suggested that the band’s name-your-price offering, and fans’ subsequent free sharing of files, had taken a toll. “Clearly we can’t give it all away and expect to sell CDs,” he said.

But Radiohead will have yet more opportunities to gain fans. The band said yesterday that it planned to perform in more than 20 North American cities this year.