Welcome to the revolution

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I might be a month late, but I think it is time to celebrate the October revolution. No, not the Russian one, but Wednesday 10 October 2007.

That was the day Radiohead released In Rainbows, an album not only available as a download, but - wait for it - the buyers decide how much they pay!

Yep, for as little as one penny you can get yourself an album by one of Britain's biggest bands. Thom Yorke, the band's lead singer, told a journalist, "We're not part of this big empire - it's trying to get away from that because it's the death of anything creative." But I wonder just how noble the band's aims are.

A week after the album went on sale the band's spokesperson announced, "Most people are deciding on a normal retail price, with very few people trying to buy it for a penny." In fact, the average price paid on the Radiohead website was £7.

The Wall Street Journal argued that, with manufacturing, distribution and marketing costs largely removed, Radiohead should be able to sell In Rainbows for as little as $3.40 (around £1.70). That means they are making, on average, £5.30 per download.

The clincher for me is that Oasis are releasing their next single as a download only. They have never done anything purely for the sake of art; it has always been about the Benjamins for them. But you should decide.

What about the record companies? Well one thing is for sure, the optional pricing policy has left them looking nervously over their shoulders. One senior A&R executive told NME, "This feels like yet another death knell. If the best band in the world doesn't want a part of us, I'm not sure what's left for this business."

The music industry claimed, in 2001, that for every CD album sold, one copy was burned. At least half of all blank CD-R sales were for the purpose of copying music - only a small fraction of which were authorised by rights holders.

So is this the end of Sony BMG and EMI? Sadly, no, don't forget we have heard this guff before. Remember when the same corporations claimed that cassette tapes were destroying music? They never did. In fact major record company profits in Britain grew during the boom in home taping.

All serious studies of the impact downloading has on music show no negative impact on record company profits. In fact, many studies show that it helps sales.

Researchers at Harvard University and the University of North Carolina tracked music downloads over 17 weeks in 2002, matching data on file transfers with actual market performance of the songs and albums being downloaded. Even high levels of file-swapping seemed to translate into an effect on album sales that was "statistically indistinguishable from zero", they wrote.

"We find that file-sharing has only had a limited effect on record sales," the study's authors wrote. "While downloads occur on a vast scale, most users are likely individuals who would not have bought the album even in the absence of file-sharing." A recent BBC1 news report describes how giving away a few songs can radically increase CD sales.

Today there are loads of legal download sites - iTunes being the most famous. The BBC predicts that the download format will more than double the value of the music industry from £25 billion to £62 billion over the next three years. Downloading and music file-swapping have given massive exposure to a few new bands and has helped the careers of bands like the Arctic Monkeys and the Libertines, but this is nothing new - mixtapes played the same role in the past.

This has always been the case with popular culture: new developments that come from the initiatives and talents of ordinary people get appropriated by the corporations.

So over the past ten years major record companies have been fighting a battle to gain control of the download market. It is a battle they think they are winning. They broke the back of Napster and they have shut down many other sites offering free downloads. One Sony BMG executive gloated, "Our profits are up... we have got the level of illegal downloads down to a manageable level."

The giant record corporations also see the growth of legal download sites as a chance to cash in on their back catalogues. Format change is good for profit. The switch from vinyl to CD forced millions of people to buy the same product again but on another format.

So are we witnessing a musical revolution? Yes, in that there's a new way of people buying music, but no, if you want to see an explosion of artists taking control of their art.