Radiohead, AmazonMP3 and iTunes

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This is Celia Hirschman with On the Beat for KCRW.

In a move that has just about everyone in the record business talking, British rock band, Radiohead, shocked the industry with news of their next album. Instead of announcing the formation of an indie label, as many were anticipating, the band side-stepped the question by making a bolder declaration. Radiohead would sell pre-orders of their new album directly from their website. Consumers who download the album can determine their own price online. Radiohead will also be making physical copies of the album available, with additional music and features. The physical box set, will be available directly from the band for about $80 US. Stay tuned, because this move could be a game changer for the recalcitrant industry.

In other news, just launched the beta version of its MP3 store. With its enormous popularity, Amazon has long been considered the only fitting rival for Apple's iTunes. The Amazon MP3 site won't be an Apple killer, but it will surely give iTunes a run for its money.

Let's compare these two online giants: iTunes is a self-contained site, requiring users to download the iTunes player for seamless integration with their iPod. One can use other MP3 players with iTunes, but its not a seamless integration. Meanwhile, Amazon MP3 operates effortlessly to download files onto whatever player you'd like, even through iTunes.

As for price and quality, iTunes offers individual tracks at 99¢ each, but those files have Digital Rights Management code on them. Consumers purchasing the files will be limited to how many times they can move their music between computers, MP3 players, and external hard drives. In addition, regular iTunes files are downloaded at a rate of 128 kilobits, which is only average quality. To combat these problems, iTunes Plus offers higher quality, DRM-free files, but the cost is $1.29 per track.

Over at Amazon, all of this is solved. AmazonMP3 charges between 89¢ and 99¢ per track. All of AmazonMP3 files are DRM-free already, so consumers can move their music files between players without any problem. And all of the AmazonMP3 files download at the higher 256 kbps rate, offering excellent quality at a lower price.

But right now content is king and Amazon is still behind because most of the major labels won't let their music out without DRM code attached. When artists like Radiohead, decide to sell music directly to consumers, one wonders if the labels are arguing amongst themselves, and ignoring the needs of the public once again. After all, retailers are as important as the artists they represent. The Radiohead model shows the industry very clearly "pay attention or we'll move on without you." It's a warning many labels and retailers should heed.

This is Celia Hirschman with On the Beat for KCRW.