While Radiohead basked in adulation for dipping its toe into the digital future with the pay-what-you-will In Rainbows pre-release, it wasn't the first major act to toy with the internet model, and certainly wasn't making a genuine move toward disruption. Had it truly boldly gone where a few have gone before, it potentially stood to lose boatloads of revenues the traditional distribution model guarantees an A-list act. On the other hand, Saul Williams, someone with a lot less to lose, took a dive into the deep end with his release of the Trent-Reznor-produced Inevitable Rise and Liberation of Niggy Tardust.
Pearl Jam and The Doors have been offering direct DRM-free MP3 downloads of material for a while now in a mix-and-match format, though not with the highest ease of use factor; Prince just gave his last album away (though not digitally); and Public Enemy's giving away How You Sell Soul To A Soulless People Who Sold Their Soul for free on P2P networks, albeit loaded with ads. And loathe as I am to credit Phish for anything, they directly sold MP3s way back in the Stone Age of 1999.
Ultimately Radiohead was only wading around the kiddie pool wearing floaties, those being its plans to distribute the album on vanilla CDs next year, possibly through one of the Big Four in North America, ensuring their experiment held little possibility of sinking them (or their cash haul).
The release was brilliant: Fanboys latched onto the $80 superfan package, casual or sympathetic fans threw a couple bucks its way for middling but DRM-free MP3s, and the band cleaned up on positive press, only to have another shot to do it again in a couple months with a regular release riding a wave of hype.
Saul Williams proves to be an interesting test case for independent digital distribution: He's not a household name, but he is forcefully backed by someone who is. In truth, without Trent's involvement, it's doubtful many people would be writing about this at all. Regardless, the release strategy is bolder and closer to what people want out of digital distribution: no DRM, easy access, solid bitrates whether you paid or not, and choices (FLAC or MP3, free or flat, reasonable fee). And while there could be a CD release of Niggy Tardust, given Trent's stance on the major labels, it's highly doubtful it'll be through one of the Big Four.
It's been asked what's up with the hate for physical media and trumpeting of digital releases. I don't hate CDs. I buy a ton of them. The issue is choice. People can buy an album on CD, buy it DRM'd to hell and of mediocre bitrate from a number of online stores or grab it for free in whatever quality they want without DRM from an equally large number of quasi-(il)legal outlets. Trent Reznor and Saul Williams are simply recognizing that piracy is a legitimate, or at least a real consumer choice, and they are cutting out the middlemen—both the labels and the pirates.
What I'm arguing is that the future of the music industry is in offering up music in as many avenues as possible, as easily and cheaply as possible. It's not so much advice as it is inevitability—it's just where things are going. The hard reality is that people place a different value on that content now than they did before—it's absurd to me to pay for news, for instance, despite being in the industry—and no matter how many people the industry sues, that won't change.
To me, five bucks is reasonable for a digital copy of an album at a good bitrate, ten for a real CD. But it might be three bucks and six for the guy next to me on the bus. Or nothing at all, but he'll drop thirty bucks go to a concert. Maybe he just spreads the word to someone who will. The music industry fits in here by offering reasonable choices and formats to accommodate all of those situations—at prices people will pay (or not) in each of them—of which there are, actually, more of than ever.
Radiohead didn't go far enough because they didn't really believe in their online release as a genuine choice. (Witness the quote from their management, "If we didn't believe that when people hear the music they will want to buy the CD, then we wouldn't do what we are doing.") On the flip side, Trent told people to steal his music because CD prices are too high, and will probably release his next album in much the same way Saul did.
Radiohead gives samples away to try to keep people from stealing it. Saul is giving his album away so they don't have to. In that way, Radiohead's step forward is an almost equal one back, while Saul's is one that's firmly forward, even if he ends up stumbling along the way.