The headline is misleading. Cliff will allow fans to pre-order the album on his website. The more pre-orders, the cheaper the album will be, with the potential for the price of the album to drop from the initial 7.99 pounds to 3.99 pounds. The pre-orders are (I think) for the physical product, not a digital download.
Attempts to compare this pricing strategy to Radiohead's recent "pick your own price" digital download sale are wrong on every single level.
But... I think it's a great use of the web. Ask how many people want to buy the album and print the required number. The more sales, the cheaper the production costs, especially if you reduce waste by knowing how many sales are expected.
Further, I suspect the preorders will have information on the potential buyers location, so the record company can print as many CDs are required for each location.
Although there was absolutely nothing stopping the record companies from doing this before the internet came alone. Pre-orders for CDs aren't a new thing.
Rewarding fans for the commitment to purchase your product is.