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Thinking it over though, releasing their album the way they did, cutting out the labels and typical music business structure, made a lot of negative waves in the business.
The people who vote for the grammys are people in the industry, so I see a strong incentive for them to keep Radiohead down in favor of someone who still plays their game.
Bongjangles hit the nail on the head. Radiohead threatened the establishment of the traditional music distribution system, which although already obsolete, retains a lot of financial and legal power, and definitely controls the Grammys.
It's just a way for the industry to pat itself on the back for selling crap to mindless sheep and to further sales of said crap. Besides, it should be an "entertainment" award ceremony anyway since some of that shit is the furthest thing from real music.
Ignoring them completely might backfire for the industry. I think a lot of acts are nominated just so it looks like the industry may actually be paying attention to them. Keeps everything looking fair and reasonable on the surface. I don't see it as a conspiracy so much as a mindset dominating entertainment elites.
Who cares, fuck the grammy's. What a worthless award. What they should do is just get all the nominees to throw down some rock-paper-scissors for that shit. It'd be more fair than the system they have now.