smackfoo.com | I find your lack of faith disturbing.

A recent Variety article quotes an internal memo from EMI's new stake holder Guy Hands suggesting the music industry has been too slow to embrace the digital revolution and that:

Radiohead's move was "a wake-up call" that everyone at EMI should welcome, but "respond to with creativity and energy."

This really makes a clear point. Smaller bands have followed the path of internet-based sales for years now, but whilst their music may often be ground-breaking, their financial impact against the huge mega-national corporates is little more than an errant bug on a windshield.

It takes a popular, well established and valuable band splitting away for the top-brass to notice. Radiohead’s departure is more akin to the proverbial frozen chicken fired towards the windscreen at high velocity.

Hands also states:

"Rather than embracing digitalization and the opportunities it brings for promotion of product and distribution through multiple channels, the industry has stuck its head in the sand."

Not exactly a glowing statement of pride in how EMI, or indeed the industry as a whole has performed over recent years.

Combine that with losing out on the cut from 1.2 million (and counting) online unit sales, not to mention tour income and merchandise rights and it will surely cause a few rosy cheeks in managerial circles, where group pats-on-the-back and reckless blame-shifting on to the consumer are more usual fair.

"Why should (established acts) subsidize their label’s new talent roster — or for that matter their record company's excessive expenditures and advances?"

I don’t doubt for a moment there is a hidden message in Hand’s comments to Radiohead that all is forgiven, come back, we love you and we’ll even talk more favourable terms.

But there is also a clear signal that such loses aren’t about to be taken idly. EMI will be expected to redouble their sales efforts to offset the potential loses from a valuable asset leaving the stable — they will still be expected to turn a profit. Likewise, investors will expect results, not excuses.

Which means things may only get worse, in terms of fair use and DRM, until something gives.

Whether that is a watershed event, where the industry fully embraces online sales, or a fully fledged push back to DRM and even tighter restrictions, remains to be seen. There is always hope when a fresh voice enters the music industry, but they are often replaced quickly and quietly with a more industry-acceptable “Yes Man”.

None-the-less, it will be fascinating to see how this plays out. Radiohead isn’t alone in their endeavour and other acts are surely mulling over their options.

It should be noted that whilst file-sharing numbers are big for In Rainbows, somewhere around the five hundred thousand unit mark, they are well less than half of all sales — clearly electronic delivery of media is here to stay.

Whilst the RIAA are continuing to prove they are completely out-of-touch with the very market they seek to control, they are simultaneously taking full advantage of the current climate. In struggling to turn-the-tide they have found an increasingly successful business model, recently popularised by SCO; litigation.

At $10,000 per copy, suing your customers is infinitely more profitable than actual per-unit sales.

For a while SCO rode high on threat, demands and lawsuits too. Raking in a huge amount of money it had no genuine entitlement to. Before it all came crashing down. There is no real defence for Copyright infringement. But the sums of money being demanded far exceed any ‘equivalence’ with sales.

How many RIAA sponsored threats against purported file-sharers have been erroneous? How many millions of US dollars in fines and settles have been accrued from behind closed doors? It’s not in the least dubious to claim file-sharing is the devils work, yet openly seek to harvest a tidy profit from it.

The RIAA is out of touch, yes, but they are not equally stupid by default. They have a good thing going whilst the industry continues to try and breath new life into old models. As more acts follow Radiohead and Nine Inch Nails into self management, the RIAA has less to use as ammunition in return.

Which is perhaps what the RIAA fear most of all, and why they are so very desperate to cling to old ways. If an increasing number of acts split from their labels, at some point they will find they no longer have any acts left to “protect”.