Radiohead’s notorious release strategy for In Rainbows, which allowed fans to download it for an optional price with a valid e-mail address, was considered to have been a failure by some because the album became wildly popular on file sharing networks almost immediately upon its release.

But Garland and Page’s, “In Rainbows, On Torrents” report, slated to be released on the MCPS-PRS website on Friday, indicates that Radiohead’s strategy was a success nonetheless, contributing to the album topping the charts in both the UK and United States and a successful worldwide tour. When it comes to judging whether an album is a success these days, the old metrics just don’t cut it.

The report found that torrent users traded 400,000 copies of In Rainbows on its October 10 release date, and that it was shared a staggering 2.3 million times by November 3 (chart courtesy of BigChampagne). By comparison, albums by Gnarls Barkley, Panic at the Disco and Portishead released around the same time using conventional means were shared less, the most-frequently shared being Panic at the Disco’s album, which was downloaded 157,000 times in a week — about three times less than In Rainbows’ peak day of trading.

Many within the music industry (including U2 manager Paul McGuinness) will no doubt view these 2.3 million downloads as sales Radiohead lost by giving the album away in a readily-sharable format. And either way, they represent email addresses that Radiohead failed to add into its fan database.

Garland and Page admit that server problems on Radiohead’s site almost certainly drove some users to torrent trackers, as did the fact that Radiohead had “signaled” to fans that the album was free. But their most interesting finding about why fans chose to download the album via torrent rather than from InRainbows.com is their hypothesis that users adhere to music acquisition venues regardless of other factors.

“The venue hypothesis suggests that even when the price approaches zero, all other things being equal, people are more likely to act habitually (say, using The Pirate Bay) than to break their habit (say, visiting www.InRainbows.com),” reads one section of the report. In other words, people tend to develop habits around the acquisition of music; once they find something that works, they tend to keep using it. As the paper mentions, “The Pirate Bay is a powerful brand with a sterling reputation in the minds of millions of young music fans.”

The hard lesson to the music business here is that it must license venues for music acquisition that fans prefer to file sharing networks or otherwise make the toleration of file sharing part of their business plans. If even Radiohead’s freely available album was torrented 2.3 million times in the first three and a half weeks, how can more traditional offerings successfully clamp-down on file sharing? They can’t, pure and simple.

Read the full story over at WIRED.

Radiohead news on this day..

• Radiohead Live in Cuyahoga Falls [live report] – 2008
• Justin Hawkins loves Radiohead – 2004
• GERMAN JANUARY DATES ARE OFF – 2003
• CREEP IN TOKYO – 2003
• Radiohead at the Benicassim Festival – 2002
• More new album details from the band – 2002