When Radiohead keyboardist / guitarist Jonny Greenwood shrugs off the issue of audio fidelity, indie musicians should take note. Given that Radiohead is perhaps one of the biggest proponents of alternative music monetization, it's ironic that Greenwood is discrediting one of the industry's key price differentiators. Musicians with tracks on iTunes, Amazon and DIY stores like Bandcamp have often chosen to price MP3s at lower rates while higher quality recordings have fetched more per track. In a recent article with The New Yorker's Sasha Frere-Jones, Greenwood admits there is little reason for the MP3 generation to look for a higher quality experience.

Said Greenwood, "We had a few complaints that the MP3s of our last record weren't encoded at a high enough rate. Some even suggested we should have used FLACs, but if you even know what one of those is, and have strong opinions on them, you're already lost to the world of high fidelity and have probably spent far too much money on your speaker-stands."

Greenwood's biggest complaint about MP3s was not quality or sound compression, but rather abundance. He suggests that MP3s make it far too easy for fans to hoard music without "giving it their full attention". In a recent Pitchfork article Eric Harvey suggests the opposite. Says Harvey, "The mp3 may have atomized music into millions of little pieces, but each piece, it seems, found a publicist. The average music fan now has the built-in capacity to double as promoter and distributor in an ever-expanding arena that's making and eliminating rules every minute."

Whether you see them as hoarders or promoters, one thing is certain, the iPod generation is changing how music is consumed. But if they can't depend on tiered pricing for audio quality, how can companies monetize the new music fan? While a Stanford study suggests that the iPod generation prefers the flat sound of an MP3, it doesn't mean today's listeners aren't willing to pay for their music. According to an NPD Group report purchasers of digital music downloads increased by 29% last year with iTunes controlling a quarter of all music sold. Some of the ways fans still generate revenue for bands include streaming music subscriptions, track and album purchases, concerts tickets, merchandise and paid application downloads.

Update, Ed: there can be a big difference in audio quality of MP3s promoted on the Web. For example the quality varied greatly between Radiohead's In Rainbows album and Saul Williams' album (promoted by Trent Reznor). See Kim Gaskins' post on the new Latitude Research blog Life Connected for further analysis.

Photos taken from Dead Air Space