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Image: Trent Reznor
Chris Pizzello  /  AP file
Trent Reznor of Nine Inch Nails declares his indepences from the recording industry by self-releasing the downloadable, "Ghosts I-IV."
msnbc.com contributor
updated 3/6/2008 4:50:12 PM ET 2008-03-06T21:50:12

The year 2008 may go down as the beginning of the end for the recording industry. And the recent downloadable album release by the industrial rock band Nine Inch Nails will probably be seen as a major blow against the recording industry empire.

“Ghosts I-IV” was officially issued Sunday, March 2, at 6 p.m. PST through the band’s Web site. The collection, which contains 36 untitled instrumental tracks, elicited so many downloads that the band’s server crashed.

Nine Inch Nails founder Trent Reznor made the album available in four editions. The first nine tracks were downloadable for free, while all 36 tracks could be had for $5. Fans who had to have something tangible to hold onto could get a $10 two-CD set, a $75 limited edition deluxe package (with a hardcover book and high-quality Blu-ray disc), or a $300 ultra-deluxe limited edition package, which includes vinyl albums and an autograph by Reznor.

What’s significant is that like Radiohead’s last release, “In Rainbows,” Reznor’s newest release was recorded, designed and distributed without any record company involvement. According to technology-attuned bloggers like Gizmodo and TechCrunch, the future of music is in Nine Inch Nails’ new model.

The 42-year-old Reznor, who was not available for an interview, clearly planned this move when he let his recording contract with Interscope Records lapse last fall. That happened just after Nine Inch Nails’ previous CD, “Year Zero,” debuted at No. 2 on the U.S. album charts last April, according to Billboard magazine.

Years ago, artists could work their local live circuit for years hoping they’d get a big pay day in the form of a major label contract. When CD technology made making your own records easier, artists like Ani DiFranco found that they could make more money by selling their recordings through their own label. Radiohead and Nine Inch Nails have proven, though, that a record company doesn’t technically even need to exist for artists to sell a lot of records.

The ramifications of that will permanently alter the record business paradigm, says Chicago Sun-Times pop music critic Jim DeRogatis, a longtime record industry detractor.

“I think quite clearly this is going to be the model for major bands in the future,” says DeRogatis of the “Ghosts I-IV” release. “Trent Reznor sold 2,500 copies of the deluxe CD box version of this new music and sold them out instantly at $300 a pop. Do the math. That’s $750,000. Even if those boxes cost him $30 a piece to make (that totals over) half a million dollars in a year.”

Cult or mainstream?
The “Ghosts” album itself hardly qualifies as a standard pop-music release. It’s all instrumental, consisting of tracks created by Reznor and then remixed by producers Atticus Ross and Alan Moulder, with a little help from such musicians as Adrian Belew and Brian Viglione of the Dresden Dolls.

According to InformationWeek.com, 37 percent of fans who downloaded the release paid for it. If you add that together with the numbers from the deluxe packages, Reznor has pocketed a pretty healthy chunk of change, says DeRogatis.

“This was a band capable of headlining Lollapalooza with 45 tour stops over the course of the summer, and drawing 30,000 at each stop,” DeRogatis notes. “That’s a major band. It’s only the record industry with its weird mathematics (that says) if Trent Reznor is only selling a million albums or 650,000 albums, he’s not worth (promoting) anymore. Not in an age where Mariah Carey can do 4 million.

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“That’s what got wrong with the music industry,” DeRogatis says. “That blockbuster mentality of ‘Thriller.’”

Nine Inch Nails’ popularity probably peaked in 1994 with their album “The Downward Spiral,” and Reznor’s popularity might not be on par with that of many major artists. But he has enough of a fan base for him to now sustain a career without the help of a record company. DeRogatis notes that it’s the lack of support from such music industry appendages as radio and MTV that have created the illusion that bands such as Nine Inch Nails have been relegated to cult status.

Slideshow: Celebrity Sightings “These are major, major artists,” he says of both Radiohead and Nine Inch Nails. “They don’t get played on radio, but show me the terrestrial radio station that even plays music anymore. They don’t get played on MTV? Well, MTV doesn’t play music anymore.”

But what works for Reznor and Radiohead might not work for artists who truly do have a small cult following. Take alternative folkie Jonatha Brooke, whose popularity peaked in the early 1990s. The singer-songwriter, who has gone on to write songs for Nick Lachey, says she thinks the music industry’s future might be determined more by the fans who download for free than the ones who pay.

“Because music is such a downloadable small form, it has become the easiest thing to trade for free,” says Brooke, who releases her CDs through her Bad Dog label. “And I think there’s a whole generation that has always had music for free, so there’s a real entitlement factor out there.

“I think there is this misperception that musicians are all loaded,” Brooke notes. “But 99 percent of the musicians out there working are just struggling to piece it together.”

Ringing up the new
But DeRogatis asserts that the majority of recording artists never made much money through selling recordings, though, and always had to tour to turn a healthy profit. These days, emerging artists such as New York indie rockers Vampire Weekend and British songstress Lily Allen use the Web as a marketing tool, then make most of their money from live gigs.

“Eight weeks ago nobody knew who Vampire Weekend was,” DeRogatis says. “Their MySpace page created them for all intents and purposes. In no time at all Lily Allen became a major touring act. And even if she never went on to sell any records and all her music was disseminated for free, she now commands considerable money for performing live.”

The combination of established bands using the Web to sell their music and new artists introducing themselves via the Internet points towards the future of pop music, DeRogatis says. But for an artist like Brooke, who has a small-but-rabid following and gets very little online buzz, no record sales could very well equal no future.

“How are we going to make this work if no one’s paying for music?” she asks. “It might not be a pretty topic, but I think it’s something that needs to be spoken about more.”

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