Pretty crazy. This is a great thing that they and Radiohead are doing, but there is one major flaw that everyone is kinda overlooking. Free music like this will only work well for very established artists, the smaller artists couldn't pull something like this off sadly
It will work fine for smaller artists (obviously they are not going to gross 1,000,000+). Fans of music will pay for good music. If they release a good album that they make available. They will:
A) Not lose profits to a record label
B) Watch as real music fans pick up their album
C) Become hyped by the music sites, which in turn, will turn even more people to the album
The only people who have anything to lose from giving their album away for free are bands that aren't releasing good albums. If you're target audience is 13 year old girls (see: ATL), then this is a terrible idea, but for people making real music out there, I can't see how this can go poorly.