BUSINESS WATCH:

The English rock band Radiohead has produced some of the spookiest tracks in modern pop music, with dissonant chords, moaning vocals and lyrics about alien invaders and the secret police. But the band’s latest endeavor doesn’t scare John Hughes, the marketing director for the Second Spin used-CD store.

Radiohead’s latest album, “In Rainbows,” came out digitally last month, and in a historical first, the band allowed its fans to pay what they wanted for the music or even download the album for free.

With online file-sharing already looming heavily over the music retail market, some in the industry have wondered whether Radiohead’s giveaway is one more nail in record stores’ collective coffin.

One who isn’t worrying much about the revolution is Hughes, whose chain has a location on Newport Boulevard in Costa Mesa. (And now a monopoly on the street; Tower Records, located a few doors down, closed last year.) Hughes acknowledges that most young music fans prefer to download their favorite artists online, but his store caters to a slightly older crowd — one that grew up with record racks and CD cases and hasn’t stopped adding to them.

“The people that come to Second Spin love the physical product,” Hughes said. “They like the experience of flipping through the racks, seeing the art, flipping through the lyric booklet. Our audience skews a little older, too. I think people in their 30s still like that physical product.”

Hughes points to the numbers page to back up his point: Over the last five years, he said, Second Spin’s profits have gone up, even as industry pundits have predicted the demise of major labels. As that generation grows older, though, used CDs could go the way of used vinyl LPs — a relic of an earlier time mainly of interest to collectors.

Then again, new CDs could become a niche market of their own, supported by the kind of people who shelled out money for “In Rainbows” even though they didn’t have to. Michael McFadin, the founder of Costa Mesa’s Ubiquity Records, presses new CDs and LPs for a number of independent artists and finds many listeners more than willing to pay. Loyal fans, he said, often go the extra mile to back their favorite musicians.

“I’ve always thought it odd that all LPs or CDs were similarly priced like a commodity,” McFadin wrote in an e-mail. “Art and fashion aren’t like that. T-shirts range from $10 to $120. I’d prefer to see music prices based at market value and what you get for the money.

“We are a catalog label with many obscure artists who sell a relatively small amount of records, but we have always kept our spending under control and priced our records at the higher end of the market. The people who support us and our artists understand the economics and are happy to pay it.”

MICHAEL MILLER may be reached at (714) 966-4617 or at michael.miller@latimes.com.