Even so, the strategy points to an undeniable truth: The traditional way of doing business is disappearing. Album sales continue to plummet (down 25 percent since 2000) — a victim, at least in part, of the illegal file sharing that has plagued the industry since Napster's 1999 inception. Record stores are shutting their doors, including once mighty chain Tower Records, which closed for good last December. There's even speculation that recorded music could turn into just another marketing device, a promotional tool rather than the key source of profit.
For bands like Wilco, that might work quite nicely. Though they do make some money on albums, most of their income is earned on the road, and they've been known to stream their albums online before they come out. ''With Yankee Hotel Foxtrot it just seemed like the simplest thing would be to let people hear it [for free],'' Wilco frontman Jeff Tweedy told EW earlier this year, referring to the album that the band initially gave away online in 2001 after Reprise rejected it. ''Because we wanted to keep touring, which is what we do for our livelihood. A lot of naysayers in the business would say, 'Well, Wilco would probably be selling a million copies of every record if they didn't have this liberal policy toward downloading.' I find the opposite to be true. I think that you really should spend time developing goodwill between yourself and your audience.'' And for many, the bond between artists and fans is stronger than ever. ''Consumers have never been happier,'' says Big Champagne's Garland. ''There's more music being consumed in more ways than ever before. We're spending more time with popular music than we ever have. So the clear losers here are major recording companies and traditional music retailers, who are very vulnerable.''
These days, the most reliable money is in still-healthy areas like touring, publishing, and licensing. Which is why, as intriguing as the Radiohead release is, the Madonna deal could end up being more significant. The singer's contract with Live Nation — which takes effect after she delivers one more new album and a greatest-hits disc to Warner Bros. — is a 10-year deal covering, among other things, at least three albums, all of her tours, and merchandise sales.
This sort of contract is known as a ''360 degree'' deal, where a single company gets involved in all aspects of an artist's career. They're becoming increasingly common (Korn and Robbie Williams signed huge 360 deals with their labels a few years ago), and many label execs believe that's where the future lies. ''Soon a lot of these companies won't define themselves as record companies,'' says Steve Greenberg, the former head of Columbia Records who now runs the independent record company S-Curve. ''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. If for some reason an artist winds up having an unsuccessful record career but a tremendously successful career as a songwriter or as a performing artist, I'm happy for them. I'm not happy if I only have [profits from] the recorded music.''
NEXT PAGE: ''I think it's irresponsible on Radiohead's part to take the position that they don't need a record company. Because it may work for a few artists who are hugely successful, but the large population of recording artists aren't Radiohead.''
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