Free for All?
Online downloads are becoming cheaper every day. Yet one artist made millions by giving it away for free.
by Terry Matthew | Published April 2008 | Features Archives

Times have never been better for someone buying music online. Legal download sites are proliferating at a torrid pace - nearly every week, I come across a new music source I've never heard of before. Completely legit music downloads are easier - and cheaper - than ever before.

In fact, online tracking sites have reported that the average price of an mp3 sold today on the internet is down to only $0.87 - a fall of 33% in the last six months alone. At the current rate, the download of one track will theoretically be down to $0.25 in one year's time - cheaper than a piece of gum.

That sound you just heard was a chill running down the spine of every record label in the world. Artists and independent labels watching CD sales and, in House Music, vinyl sales dwindle didn't expect that the bottom would fall out of digital downloads so quickly. Yet all indications are that not only will digital downloads fail to make up the lost revenue from sales in other media, but may soon approach a value of zero. And this is when the number of tracks being bought is increasing every single month.

What to do? Sunshine Jones, co-founder of Dubtribe and an artist with a large and remarkably engaged fanbase, has proposed a "community funded" album. On sunshine-jones.com, he's attempting to raise $50k to record his next full-length album by essentially asking fans to pre-order the disc on a sliding scale (the more you pay, the more swag and perks you get, from a digital download for $10 all the way up to a private concert). As of this writing, the campaign was about a month old and he was 10% of the way to his goal.

Another more radical (and seemingly insane) solution was proposed - and then carried out - by Trent Reznor of Nine Inch Nails. In March 2007, Reznor announced the release on his website of four separate EPs containing nine songs each. The first EP, Ghosts I, was (and still is) completely free for anyone to download. You can buy all four albums as a digital download for $5 (an average of $0.14 per track), or order them on CD for $10.

In the first week, Reznor announced he had drawn in $1.6 million in sales. More than 2000 copies of a special collector's edition of the four Ghosts EPs (on vinyl, with a DVD and other bonuses) sold out at a $300 cover price in a single day.

By giving away a small piece of the pie, Reznor received a larger check for album sales than he's probably ever gotten in his life.

(Ed. Note: Since this article was published in our April issue, Trent Reznor is giving yet another album away. On May 5, Reznor wrote about the new NIN album the slip, "Thank you for your continued and loyal support over the years - this one's on me.")

There are a few caveats here - foremost of all, Reznor didn't spend a dollar on marketing, letting the media advertise his record based on the novelty of how he was selling it - but the question is obvious: if giving away the barebones and charging for the extras worked for Reznor, could it work for House Music? Could an artist, say, give away low-quality MP3s of his work for free, knowing that DJs need their tracks to be at a much higher bitrate than the average listener? Or could a label give away an original mix and charge a nominal fee for a package of remixes instead?

I asked around to see what some Chicago-based artists thought and, more to the point, if they could see doing the same with their music:

Mark Grant (Blackstone): "Though giving it away pretty much puts you back at square one, it does offer a promotional angle for [Reznor] - here we are even discussing it.

"I'm not sure I have the answer to the illegal download deal, but from the info I have, I wouldn't do it. From my little research of just striking up this conversation with consumers (and DJs), I've found that if they can get something for free, they will. I mean, if purchasing a song for $0.99 at iTunes is too much, it'll be too much to purchase it for even a penny, as long as they can get it for free."

Frankie J (The Sound Republic): "This probably won't happen on the same level as it's happening in rock music because rarely are full albums released in dance music, but there have been similar instances that I've seen. We just recently gave away two remixes of ours for free on thesound republic.com. These remixes were never going to see the light of day on vinyl or be released digitally, so why not just give them away? The people who visit our website frequently benefitted and it was a way to show our appreciation.

"I've been kicking around the idea of offering a portion of our back catalog in bulk for free. There is a certain point when a release has topped out in sales on vinyl as well as digitally. After this point, it may be beneficial to offer it for free. More people who may have missed it, never knew about it or will ever know about are more likely to get a hold of it."

Leonard Part Sixx: "I think that Trent's campaign may be have some merit. I think he's looking outside the box on ways to promote his work. Dance music could be done the same way, giving away a few songs and making exclusive remixes available on a group/label website via a special code, for example.

"We'll see if this works for Trent, but I wouldn't mind doing it. I know that people are going to pirate anyway, so if I can find ways to promote myself, I could win in the long term by building a fan base."

Do you have thoughts on this? Everyone in the music industry is talking about these figures, but hardly a peep from our little corner of the music biz. With a well-known online store reportedly in talks to offer unlimited music downloads for a flat monthly fee, is free the only way to go? Email me at terry@5chicago.com and join the argument.

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