There seems to be a fair bit of excitement in the F1 world over the idea that such a well-known brand as Virgin may associate itself with F1. Despite the megabucks involved in the F1 world, and the massive worldwide exposure it can provide any brand, it is fair to say that F1 has failed to attract most of the major brands in the world.

Aside from tobacco companies, a few alcohol companies, and latterly electronics firms and a few financial institutions, it is interesting quite how many big brands have never touched F1 with a barge pole. Coca-Cola? Nowhere to be seen. McDonald’s? Nope. Virgin? It could be about to happen.

It wouldn’t quite be the first time Virgin has been involved in F1. A few articles have pointed out that Virgin Mobile had a relatively minor deal with Jordan in 2002. That is the full extent of Richard Branson’s involvement in F1 to date.

There was something else in the back of my mind. I remember in 1999, Arrows (then led by the big-talking and ambitious Prince Malik ado Ibrahim) was very proud of itself for bringing the Virgin brand into F1 for the first time. It had secured a minor sponsorship deal with Virgin Records, whose logo appeared in a tiny red area just in front of the cockpit. You can just about see it if you use your imagination while looking at the picture on F1 Wolf’s 1999 liveries post.

But with the world of the Virgin brand being rather complex, Richard Branson had nothing to do with it. As this article on Grandprix.com, written when the deal was made ten years ago, points out, Virgin Records had been sold to EMI seven years earlier.

So if a deal between the Virgin Group and Honda goes ahead, it won’t be the first time Richard Branson has been involved in F1, and it certainly won’t be the first time the Virgin brand has been in F1. But such a deal would easily eclipse the earlier forays, so it will still be momentous for F1.

Not bad for a sport that’s supposed to be in the doldrums. No wonder Bernie Ecclestone is so enthusiastic about the prospective deal.

There is some exciting news from Last.fm. I have been in love with that website ever since I signed up back in 2004, and there is now yet another reason to love it.

As of today, you can play full-length tracks and entire albums for free on the Last.fm website.

Something we’ve wanted for years—for people who visit Last.fm to be able to play any track for free—is now possible. With the support of the folks behind EMI, Sony BMG, Universal and Warner—and the artists they work with—plus thousands of independent artists and labels, we’ve made the biggest legal collection of music available to play online for free, the way we believe it should be.

Beforehand, you could only play a select few tracks in full for free — and to be honest, they were mostly rubbish. Now all four major labels as well as 150,000 indies are on board letting people listen to their music for free on Last.fm. Millions of songs are now at my fingertips.

Okay, so the music is not completely free. Once you’ve listened to a track three times, you will be blocked from listening to it again until you pay up. But complaining about this would be churlish. Even if you approach it as a kind of ‘try before you buy’ service, this is much, much better than anything that has come before.

For me, this is the day the recorded music industry has begun to face the music (excuse the pun). There have been signs of them facing up to the reality of a world with the internet. But even, for instance, their plans to sell DRM-free MP3s through Amazon was as much an attempt to derail Apple’s dominance in the digital download arena as anything else.

No doubt there will be questions about the financial viability of this. The BBC report on the announcement certainly adopts a slightly sniffy, sceptical tone.

It certainly feels strange, coming just a couple of weeks after Pandora closed its similar service in the UK on the basis that the labels were making it too difficult.

Both the PPL (which represents the record labels) and the MCPS/PRS Alliance (which represents music publishers) have demanded per track performance minima rates which are far too high to allow ad supported radio to operate…

But that is pretty much the model that Last.fm is adopting:

We’re not printing money to pay for this—but the business model is simple enough: we are paying artists and labels a share of advertising revenue from the website.

Today we’re redesigning the music economy.

How can Last.fm make it work if Pandora couldn’t? It is true that Last.fm has big backing in the form of its owner, CBS. But if it’s not financially viable, it’s not financially viable, right?

Maybe there is more to this, or there is something I’m missing. Leaving the Pandora issue aside, it looks as though something big has happened today — as though someone’s banged a gong and the majors have all woken up to what’s going on. And they’ve agreed to finally do something sensible about the situation. Today music became even cheaper, and we all became a bit richer.

There are only two things in the world that give us absolute total happiness. One is seeing other people fail. The other is unwrapping a newly-bought CD.

–Armando Iannucci

In the wake of all the upheaval that the recorded music industry is facing, a lot of people have been predicting the death of the CD. After all, the very reason why music is cheap or free these days is because they don’t need to be put on a physical object which then has to be transported around the world. Surely digital downloads are the only conceivable future for music distribution.

I don’t like the idea of this. If I was five years younger it would probably make perfect sense to me. Last week’s edition of The Economist tells the story of a focus group that EMI held. It was aimed at understanding yoofs better. At the end of the meeting, the teenagers were invited to take as many free CDs from a pile on a table as they wanted. Not a single person took a CD.

It’s just the latest example of a recorded music industry that has always found it difficult to adapt to new technology. Historically, consumers have gone for the most convenient and cheapest format rather than the technically excellent one. So says Fredric Dannen if you scroll a long way down.

When the long-playing record (LP) format was introduced by Columbia Records back in the late 1940s, the industry as a whole resisted it, and many predicted it would never take off because 78s sounded better. Without question, early LPs did not sound nearly as good as 78s. But given the choice of listening to all of Beethoven’s Ninth Symphony on two sides of one record versus sixteen sides of eight records, the consumer opted for convenience and simplicity (not to mention less shelf space).

…You can always count on the record industry to cling to the past, and to fight innovation.

So does the arrival of MP3 mean the death of the CD? I personally hope not. I love CDs. I am of that generation, probably a small five–ten year window of people who wouldn’t consider vinyl but had no access to file sharing as they grew up. Napster came onto the scene in 2000, when I was 14 — well into my music-consuming life.

I have been collecting CDs since I was nine years old. I haven’t counted, but I must have around 600 CDs. I only bought my first vinyl records a few years ago. I bought them grudgingly, only because they were not available on CD. I reckon today I have 30 vinyl records.

I have only ever bought around a dozen MP3s — again, because they were not readily available on CD or vinyl. (I have downloaded a few dozen more because they weren’t commercially available at all — mainly live bootlegs and demos.) I would consider buying more. But although MP3 is the format du jour, there is a big block in my mind preventing me from buying something that I will never be able to see or touch.

I suppose this makes me a collector. (Yes, my collection is in alphabetical order — or it was until I ran out of space.) Collectors tend to be fans of vinyl though, which makes me an anomaly.

It would be nice to think that the CD will limp on and eventually survive another day in the MP3 era just as vinyl has done in the CD era. I have grown up with CDs and I love them. I’m not an audiophile, so the sound quality issue doesn’t worry me too much. And to be honest, I can’t be bothered with the faff of vinyl.

Whether it is CD or vinyl, there will always be people like me who treasure the physical presence of an album. It’s not just about a collection of notes. It about an event, a happening. It’s the artwork, the packaging. The sleevenotes, the lyrics. The smell of the booklet. It has an aura. When you hold a copy of a good album, you are transported to its space without even having to put it on. Could all of this really die because of the internet?

When Radiohead released In Rainbows, the pricing structure grabbed all of the headlines. But that wasn’t the interesting thing for me. The pay-what-you-want method is just a belated recognition of the fact that people could choose to pay nothing anyway.

The other aspect of the release of In Rainbows interested me much more. I didn’t pay anything for the MP3s. I downloaded them for free when they were released on 10 October. That’s because I got them as part of the £40 “discbox” set.

The discbox is a premium edition of In Rainbows. It comprises a CD of the album, an second CD with eight extra tracks and enhanced content, a 2× vinyl edition of the album, and generally all-round badass packaging.

£40 is the most I have ever paid for an album. I hesitated before I ordered it — but not much. Although I am sort of a collector, I have never been a completist. I am usually happy to have the CD version on its own. But I couldn’t resist the awesomeness of the discbox — despite the fact that I hadn’t even heard the album.

This was largely ignored in the media coverage of the album, but to me it was the most notable aspect of the unconventional release of In Rainbows. When I first posted about In Rainbows, I neglected to even mention the fact that the MP3s were free. I didn’t find it that interesting.

People like me, who love the physical formats, will be continue to be catered for. It is easy to make money out of us. Slap a sticker saying ‘limited edition’ on a record and suddenly demand for it will become price inelastic. Suckers like me will buy premium versions of albums at higher prices than we would otherwise consider. And this will become ever more important for the record companies as physical sales continue to get eaten into by the internet, where profit seeking is impossible.

In Rainbows wasn’t the start of this. Limited edition versions of albums have been around for a very long time. But in an age where it is becoming increasingly difficult to make money out of recorded music, it is becoming more and more prevalent.

When I went shopping for Sigur Rós’s Heima DVD I thought £17 was a bit steep. Then I saw the limited edition version for £25 and bought it.

The deluxe multi-format edition seems to be becoming more common as well. Björk’s latest single, ‘Declare Independence’, is available as a deluxe edition, yours for only £19.99.

Formatted in the same extravagant packaging as the Volta double LP, this contains all conceivable formats of the single: double vinyl, CD and DVD.

Something else that is becoming more and more common is for people to automatically get the MP3 version for free when they order a physical version. For instance, Nonesuch has started doing this. You can choose between standard 128kbps MP3s or maximum quality 320kpbs at no extra cost.

It makes sense to me. Being able to have your entire music collection on a portable device is becoming an expectation these days. Since vinyl is a bit more tricky to get onto your iPod, it would be good to get the MP3s of music that you have already bought automatically for free. Hopefully more record companies will adopt this approach.

A lot of people have wondered aloud if the fact that we can now get music for free from the internet is devaluing music. But it seems to me as though the internet is not only driving the price of music down — it’s also driving the price of CDs and records up.

Apologies for taking so long to get round to writing this post. That pesky life business getting in the way as usual.

In the previous posts in this series I have been waxing lyrical about copyright law and the mistakes the entertainment industry has made in adapting to a world with the internet. Over the past couple of years, people in the music industry have — belatedly — begun to tackle the issue properly.

Radiohead made big news last year with their latest album, In Rainbows. What hit the headlines was their novel pricing structure. You could choose the price you wanted to pay for it, between zero and £100.

This idea wasn’t all so novel though. Radiohead are by no means the first band to release their music for free, or to take the ‘honesty box’ approach to pricing. They certainly won’t be the last.

Prince did a similar thing this year as well when he gave away his latest album free with copies of the Mail on Sunday. This led to the odd sight of branches of HMV installing a dumpbin of the paper for one day only.

It’s worth thinking about exactly what Radiohead did by implementing a choose-your-own-price method. The record industry often likes to talk about how much it has “lost” as a result of piracy. But the numbers they use are misleading.

As Tim Worstall pointed out on his (now tabloid) blog many months ago, demand curves slope downwards. So the record industry don’t lose anything like as much as (number of illegal downloads) × (RRP of a CD) as a result of the download revolution.

The old model meant that people could basically either choose to buy a CD at its RRP or pass on it completely. So if you were only willing to pay £11.98 for a CD that was priced £11.99, you wouldn’t buy it. That is fine — that is how the market works.

But when filesharing became more common, people could choose to buy a CD at its RRP or download it for free. Those were the only options available. So if you were still willing to pay £11.98 for that CD, you would not pay £11.99 — you’d just download it for free. From £11.98 and lower, record companies were losing profits. They didn’t know how to deal with this, so used the ham-fisted techniques I described in the previous post instead of coming up with a new business model like they should have done.

The In Rainbows method tackled the problem head-on. Under Radiohead’s system, if you were willing to pay £11.98, you could choose to pay £11.98. What’s more, if people were willing to pay, say, £80 for the album, they could choose to pay that as well.

Chances are that most wouldn’t. You could legally download it for free, so lots of people will have done this without feeling any sense of guilt. Radiohead aren’t releasing any figures, so we can’t tell. But reading between the lines of the interviews Radiohead have given, they seem quite happy with how the experiment has worked out and most estimates suggest that Radiohead have made more money using the honesty box approach than they would have done with the old way — mostly because all of the middlemen have gone.

The middlemen are a big problem. They seem to be particularly so at EMI. Recently EMI was taken over by a private equity firm, Terra Firma. They appear to be particularly clueless. In the space of a few months they have managed to piss off three of the biggest acts on their roster — Radiohead, Paul McCartney and now Robbie Williams.

Here is some insight from Paul McCartney:

“I’d started saying to them: ‘Look, we could write a thing and have it released the next week.’ And they would say: ‘You can’t do that these days.’ So I would say: ‘Well, how much time do you need?’ And they’d say six months. I said: ‘Why do you need that long?’ And do you know what they said? ‘To figure out how to market it.’ I said: ‘Wait a minute, are you sure you need six months for that? Couldn’t some bright people do that in two days?’ Jesus Christ. I said: ‘Look boys, I’m sorry, I’m digging a new furrow.”

EMI seem to be making the mistake of treating artists like widgets. They have mistaken creativity for something that can be switched on and off like a tap.

And they seem to be amazingly inefficient. Fans know all-to-well about the six month gap between the announcement of a new album and its actual release date. It surely don’t have to be that way. Indeed, one of the most refreshing things about In Rainbows was that it was announced a mere ten days before its release.

So if the middlemen are no longer needed and are actively hurting the artists and the fans, does it mean labels are doomed?

Well, Radiohead took a risk, and it paid off. A lot of people say they were in a lucky position. And they were. Radiohead are the best band in the world and probably the most popular contemporary band. They were always going to do well regardless.

But what about the smaller bands? Surely the chances are that they won’t do as well as Radiohead by adopting such an honour system.

But honour systems work. Paul Feldman the bagel salesman knows that. LibraryThing has been using such a model for a while, and found that their takings increased once they adopted the system.

A lot of music fans are extremely loyal to their favourite bands. They are just the type of people who won’t take advantage of the fact that you can get music for free. They get such a warm glow from knowing that they are rewarding their idols.

Labels and bands may still be wary. If honour systems don’t convince, the common answer to the problem is to release music for free and use it as a way of generating publicity so that more money can be made from touring. Alan McGee, manager of The Charlatans, who are also now giving away their music for free, reckons that it could even triple the size of the crowds at gigs.

Merchandise is also becoming increasingly important. There is a theory that the reason concert promoters don’t charge the market value for gig tickets is because keeping the price low attracts a younger audience. These youngsters will go on to buy loads of t-shirts from the merchandise stall, so in the end everyone involved makes more money. Some bands are even stopping selling CDs at gigs for fear of cannibalising t-shirt sales.

So the future of music is gigs and t-shirts. This is great for my wallet. I rarely attend concerts, and I am more and more reluctant to buy t-shirts.

But I think the music industry could still potentially make lots of money from selling physical copies of the music. And my wallet won’t be so happy about that. That will be the subject of my next (and, at last, final) post in the series.

Radiohead is one of the best bands on the planet. But even Radiohead have some incredible turkeys in their back catalogue. Thom Yorke’s single is the distinctly average ‘Analyse’. Listening to The Bends yesterday was the straw that broke the camel’s back and made me write this post. Here are the ones to skip.

• I Will — Doesn’t seem like a bad song at first. But an alternative version, ‘I Will (Los Angeles version)’ is far superior, yet had to make do with being a B-side.
• You Never Was Up After Yourself — I almost left this off the list simply because it’s such a forgettable song.
• Melatonin — This unmemorable song sounds like a demo, mostly because of the horrible cheap synth sounds used.
• Analyse — A monotonous track, if you’ve heard the first ten seconds you’ve heard the whole song.
• Backdrifts — Only some interesting electronic soundscapery saves this one. The melody is so unbearably sickly sweet, it sounds like the sort of thing they’d sing on Hi 5.
• How Do You? — This song kind of single-handedly sums up everything that was wrong with early Radiohead. Why did they feel such a need to sound so American?
• Stop Whispering — Radiohead can perhaps be forgiven for having the odd bum tune on their first album, but there is simply no excuse for this travesty. Why… just why? Shockingly, the worst song on Pablo Honey is also the longest one.
• Sulk — The Bends is regarded as a classic album, but I think the quality varies dramatically from song to song. Sulk sounds like a proper dud, particularly given the fact that it is immediately followed on the album by the genius of ‘Street Spirit (Fade Out)’.
• High and Dry — Possibly the most banal song ever written, I almost always skip this track while listening to the otherwise-bearable The Bends. Thom Yorke recently admitted that EMI put pressure on Radiohead to release this. If only they hadn’t, then we might never have ended up with banal whinepots like Coldplay and all those other bands that get compared to Radiohead but couldn’t actually hold a candle to them.
• Let Down — OK Computer is widely regarded as one of the greatest albums ever to grace an ear. I say that no truly great album can contain a track as poor as the aptly-titled ‘Let Down’. A cheesy, unadventurous song that goes absolutely nowhere. And what is with that bleeping at the end? It’s like something out of a low-budget 1970s science fiction programme. They went down to the Oxfam and bought the cheapest Casio keyboard and accidentally leant on the demo button?

Generally believed to be a bad Radiohead song, but actually quite good

Pop is Dead. It’s not well-known as it doesn’t appear on any albums, but this was actually one of Radiohead’s first singles. Most people think it’s quite cheesy. I just think it’s good fun and a whole lot less cheesy than some of the songs from Pablo Honey.