MJ Kim/Getty Images
Rob Brunner
October 19, 2007 AT 04:00 AM EDT

One is arguably the biggest pop star of the last 20-plus years. The other is a quartet of pasty English eggheads given to song titles like ”Weird Fishes/Arpeggi.” On the surface, they don’t have a heck of a lot in common. But in a single week, Madonna and Radiohead just might have permanently transformed the music industry.

On Oct. 10, Radiohead, one of the world’s most beloved, respected, and unpredictable bands, self-released their first new album in four years. (Capitol had put out their previous six discs.) The rabidly anticipated new album, In Rainbows, is currently available only as a download through the website InRainbows.com. When it comes time to pay, you’ll encounter four short words that might come as a surprise: ”It’s up to you.” The album’s price, that is. Five dollars? Your call. Ten? Sure, sounds good. Nothing at all? Hey, whatever works for you. ”I’m just glad everyone’s hearing it at the same time,” says Radiohead guitarist Jonny Greenwood. ”That was the point, really.”

He’s being modest. Radiohead’s sliding-price release is a potentially game-changing tactic, perhaps the strongest indication yet that the record industry will in fact redefine itself — in order to survive. The same day In Rainbows went on sale, news broke that Madonna will leave Warner Bros., her home of 25 years, to sign a reported $120 million deal with tour promoter Live Nation that will include albums, touring, merchandising, and licensing. That’s right, Madonna is about to entrust her future to a company that has never sold a single album.

And it’s not just Radiohead and Madonna. Lately it seems like fewer and fewer established artists want to be on traditional labels. On Oct. 8, Trent Reznor walked away from Interscope. Paul McCartney and Joni Mitchell — who between them have logged more than 80 years on major labels — released their most recent albums through Starbucks. The Eagles’ new disc will be available exclusively from Wal-Mart. This past summer, Prince gave away his latest album with copies of a British newspaper, and Kinks frontman Ray Davies recently announced he’s planning to do the same with his next disc.

All of which makes us wonder: Could these developments herald the eventual demise of the label business? Well…maybe. ”I think it marks the beginning of a new era in how record companies function, but I wouldn’t call it the beginning of the end,” says Liz Rosenberg, Madonna’s longtime Warner Bros. publicist. ”For the last year or two it’s become much more crystallized that everyone in the business has to explore new ways of being profitable. The combination of Radiohead and Madonna these last few weeks is a big shift.”

Of course, what works for major stars probably won’t work for everyone. Few artists command the kind of respect and loyalty needed to succeed without label support. ”People called to ask me, Is [Radiohead’s pricing] the new business model?” says Eric Garland, CEO of Big Champagne, a company that monitors Internet music. ”And I said, Yes! It’s a fantastic new business model. Step one: Be Radiohead. Step two…”

NEXT PAGE: ”Soon a lot of these companies won’t define themselves as record companies. They’ll define themselves as artist development companies. If you’re involved in an entire career with an artist, then everyone’s interests can be aligned.”

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