Last October, Radiohead gained a good amount of fame when they decided to release their album, In Rainbows, online for whatever price you felt it was worth — including $0.00 if that’s what you decided to put in. So effectively, you could download the entire new album in MP3 format, immediately, for free. So then, why in the world did millions of people opt to download it illegally via BitTorrent anyway?

According to statistics from BigChampagne, In Rainbows was traded via torrents over 2.3 million times within one month of the album’s internet release. While the actual number of legal downloads of the album from Radiohead’s website are not public, it is still generally believed that in the end, the album was still pirated more times than it was legally acquired.

Especially interesting is the fact that these numbers — 400,000 downloads on the first day and 2.3 million over the first month — completely dwarf illegal downloads of albums by huge artists such as Gnarls Barkley and Panic at the Disco, even though they weren’t giving away their music and thus piracy was to be expected.

Believe it or not, though, this all makes sense, and I will break this down for you now.

When something is free, more people hear it, and more people share it. Giving away your music is generally accepted as a way to get it out to more people, even if that means you can’t profit directly off the sale. We must remember that when something shows up on the torrent trackers, it had to start from somewhere. Someone, somewhere had to buy, steal, or leak the original CD in order to digitize it and get it onto the torrent trackers. In this case, since anyone could go download it, essentially anyone could also be the “seeder.” Thousands of people were downloading and creating their own torrents of it, resulting in not only the most blazingly fast download ever, but also the fact that you couldn’t go onto any torrent tracker without seeing it. It was everywhere.

The bigger issue at hand here, though, is that the torrent platform has done for piracy what iTunes has done for music sales — created a well-known and respected brand that is also incredibly easy to use. It’s pretty easy to download files from the torrent trackers. You just go somewhere like The Pirate Bay, search for what you want, and click a single button. Done. It’s easy. In order to legally get the album from Radiohead, you were required to give them your email address, navigate an overloaded server, etc. It could take several minutes and required too many steps.

This is exactly why iTunes is so successful. Even though you can get the exact same music with better quality and no copy protection at lower prices at Amazon, iTunes still wins. It’s easy, it’s a brand, it’s respected.

It is also comparable to a band trying to run their own website rather than use MySpace. While you have more control, the sad fact is that in order to sell things to the masses, you must now to go where the masses congregate — they will no longer come to you, in most cases even if the content is compelling. And right now, those masses congregate on MySpace, iTunes, and The Pirate Bay. It is therefore interesting, but not surprising to me, that Radiohead’s album was pirated more than it was legally acquired despite being free.

But in the end, the band still wins. They still made a good amount of money from the pay-what-you-want approach and for the special edition versions of the album. Their concerts will sell out. They won the public opinion, and made themselves a beacon to the rest of the music industry.

The big winners in the music distribution space are always going to be the ones that balance price with ease. And when the price is $0.00, so much the better.