Analyst estimates Radiohead made $2.7 million (and they keep nearly all of it)

So the question is:

How do bands build a fanbase? How much is a band willing to pay for marketing? Maybe labels will be able to profit from bands without stealing the copyrights as they have traditionally done. If not, will anyone else step up?

It's too bad that feature wasn't really built into the interface. My friend ordered it, and it wanted you to enter a price as soon as you downloaded it. That meant you would have to go through the download process again if you wanted to pay $0 at first and then more later, which seemed kind of backwards. In my opinion, it would have made more sense to have the songs as streaming mp3s on the site, and then allow the option to buy the album after listening to the tracks.

It's also too bad that they are effectively punishing those people who bought into this business model. The tracks ended up being somewhere between 128 and 192 Kbps mp3s (I don't remember exactly what, though, something like 154 maybe?), and they will now be selling the CD through the usual outlets for the normal price, with additional songs that weren't available in the pay-what-you-want offering. This means that fans who went out and bought the low-quality, less-songs album will have to pay yet more money to get all of the album's songs and CD-quality music.

All of this would have been fine (in my book) if they told everyone from the start that they planned on doing this, but instead it seems like they are capitalizing on the loyalty of their fans, getting more money out of them than they would have otherwise.

I don't think that we can really consider this a win for the pay-what-you-want business model until an entire album is offered in a lossless format (flac built-in on Windows like it is on Mac, anyone?), with an easy interface for listening to the music before buying the album. This might be a good area for a startup to target: a site to facilitate the streaming and financial aspects of this kind of business model.