It wasn't that groundbreaking. Radiohead were already massively popular despite taking the anti-Britpop, anti-commercial rock route in the '90s. The online MP3 thing in 2007 was a bit of a publicity stunt -- the record was still distributed by XL , which retained all the traditional distribution channels.
I believe Smashing Pumpkins actually beat them to it by several years by releasing Machina II for free online in 2000 after the breakup of the band.
It was ground breaking, taking into account that Radiohead released a critically acclaimed album. In Rainbows had a digital release that was pay what you want, not exactly the same as putting something out for free after breaking up.
I believe Smashing Pumpkins actually beat them to it by several years by releasing Machina II for free online in 2000 after the breakup of the band.