comScore today released a study of online sales of In Rainbows, the new record album from the band Radiohead. The album’s release has challenged the music industry’s traditional distribution and sales model by allowing consumers to determine the price they are willing to pay.

Unfortunately for the future of musicians everywhere, nearly 2/3rds of Radioheads fans are freeloaders, according to comScore’s data.

‚ÄúI am surprised by the number of freeloaders. The stories to date about the In Rainbows ‚Äòpick your price‚Äô download offer have been much more optimistic,‚Äù said Fred Wilson, managing partner of Union Square Ventures. ‚ÄúThis shows pretty conclusively that the majority of music consumers feel that digital recorded music should be free and is not worth paying for.”

“That’s a large group that can’t be ignored,” adds Wilson, “and it’s time to come up with new business models to serve the freeloader market.‚Äù

Other Views On The Radiohead Experiment

‚ÄúWhile the band, its fans and artists alike are celebrating what looks like a success for Radiohead’s bold move in releasing their new album using the ‚Äòpay what you’d like‚Äô model, I think everybody has overlooked one very important aspect of this, and it doesn’t bode well for the future of the music industry,‚Äù says Michael Laskow, CEO of TAXI, an independent A&R (Artist and Repertoire) company. ‚ÄúRadiohead has been bankrolled by their former label for the last 15 years. They’ve built a fan base in the millions with their label, and now they’re able to cash in on that fan base with none of the income or profit going to the label this time around. That’s great for the band and for fans who paid less than they would under the old school model. But at some point in the not too distant future, the music industry will run out of artists who have had major label support in helping them build a huge fan base. The question is: how will new artists be able to use this model in the future if they haven’t built a fan base in the millions in the years leading up to the release of their album under the pay what you’d like model?‚Äù

“It is important to note that Radiohead has single-handedly accomplished a milestone that the recording industry has failed to achieve – they’ve eliminated much of the profit attrition related to piracy or illegal copying,” said Edward Hunter, comScore analyst and part-time songwriter. “Moreover, they have garnered good faith with the music consumer at a time when it’s all the rage to bash the industry and the artists who ally themselves with it. And then you have the reduction in cost of sale, cost of promotion and production. I’d call this a resounding success for Radiohead and music fans everywhere – and a fantastic artistic effort as well.”

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.