How Trent Reznor just barely missed another opportunity to set a powerful positive precedent by doing everything right except for one extremely small but critical detail
Once again making all the headlines, Trent Reznor has released a brand new double album (four volumes) called Ghosts, which is every bit as experimental in its sound as it is in its business model. Free from the influences of mainstream record labels, Trent and his cronies have created an eclectic series of 36 instrumental tracks which sound more like Godspeed You! Black Emperor than what you'd expect from NIN; something that should most certainly be taken as a compliment when coming from me.
But what's more interesting (to me at least) is Trent's thrown yet another curve ball in his everlasting experimentation with music business models. According to the official site, "Ghosts I-IV is licensed under a Creative Commons Attribution Non-Commercial Share Alike license." This means that Trent is legally condoning redistribution of the album on mainstream file sharing services. The bottom line: if you want to, you can legally download the whole album for free.
This is not new. Trent did it with Saul Williams when he produced The Inevitable Rise and Liberation of NiggyTardust. However, likely as a consequence of Trent's disappointment with that album's donation-only monetization model, it appears that while Trent continues to legally condone file sharing simply because it's impossible to stop, he does not explicitly endorse it. Further confusing the issue, Trent officially created and endorsed a torrent for the first quarter of the album on The Pirate Bay, but deliberately left the rest of the album out of the torrent, meanwhile admitting, condoning, but not necessarily endorsing in the README text of the torrent that the whole thing will likely be provided by a third party on the same file sharing network in short order.
And indeed the rest of the album was available on mainstream bit torrent networks in short order, and why shouldn't it have been? The third party torrents with the entire album are perfectly legal, thanks to Trent licensing it all under Creative Commons. Trent's business model among this class of his customers hinges on shaming them into paying $5 for a digital download directly from NIN.
Trent's apparent position is a logical contradiction. As an artist, you either accept the reality that unstoppable market forces will force recorded music downloads to be free or you don't accept that. Trent's trying to play both sides, and I dare say, Trent needs to pick a side. He should have either officially endorsed the free digital downloads by offering the entire album (rather than one quarter of it, or asking for $5) for free on his site via a direct download or a torrent of his own, or he should have never licensed it under Creative Commons. You're either for the consumer cost digital music downloads business model or you're not. Trent seems to live somewhere in between at the moment.
That said, once Trent licensed the whole album under Creative Commons, he effectively abandoned the consumer cost business model for digital music downloads. The only people paying him the $5 are people who want to donate money to him or people that don't understand how to use file sharing or are unaware that it is perfectly legal in this case. Granted, the ignorance I'm alluding to is amazingly widespread. People don't really get Creative Commons, and what's worse is Trent's not going out of his way to advertise the fact that it is licensed this way. I had to dig it up in the FAQ I linked to above.
It seems to me the biggest detail overlooked when Trent formed this business model is he failed to realize or refused to consider the option of monetizing the freeloaders. Content can be monetized in ways other than a consumer cost business model. Trent's business model at the moment works on the assumption that either his consumers will pay him, or he won't make any money off that consumer. However, as I've written about and others has written about many times, content need not be at consumer cost to be monetized when consumed. The most common way to monetize free content is advertising. Google, radio, broadcast television, and countless other businesses have been leveraging this technique for decades now. It's crazy profitable.
To apply this concept to this album's release, the critical specific mistake Trent made was letting the bit torrent websites get all ad revenue from the freeloaders. If Trent had hosted his own bit torrent tracker for the freeloaders to go download the album directly from his site to their heart's content, Trent would have had an opportunity to place ads on the site and monetize the free content. This is as opposed to the present $0 in revenue he gets from those consumers presently.
But the biggest missed opportunity here is not the arguably insignificant amount of ad revenue Trent failed to take advantage of, especially when compared to the astounding $750k he made off personally signing 2.5k physical deluxe copies (damn it feels good to be a rockstar). The important missed opportunity here is to set an incredible example for the future of the digital music downloads business. Had Trent done as I've suggested and, better yet, written an impassioned article calling for just the kind of change I'm talking about, it would have had a profound effect on the industry.
Specifically what I'm talking about is the fact that there are very few people with the means and the motive to change today's screwed up music business and Trent Reznor is one of those few people. He's already considered to be the de facto leader of La Revolucion! in the eyes of most industry-aware consumers, but as evidenced by this analysis, he lacks focus. If Trent nailed his focus, called for an end to consumer-cost music downloads, and started a brand new "record label" (for lack of a better term) with said goal in mind based on an indirect revenue model (such as ads), he could galvanize consumers and artists alike into entering this brave new world, single handedly toppling archaic labels he hates so much along the way.
The reason it's critical for someone like Trent to do this is because I can write about this stuff until I'm blue in the face and change nothing. Frankly, people with vastly greater sums of fame and critical credibility have made all the same points I have in this article and also have changed nothing. What we lack is Trent's fame, fandom and music business establishment. I'm a professional web developer. Much of the other guys writing about this stuff are economists, analysts, and other business people. We can't motivate large sums of important people entrenched in the music industry to save us all a lot of trouble and embrace the inevitable direction the industry is going sooner than later; gracefully, rather than kicking and screaming decades from now when it's the only choice left for the industry. But Trent can do that. And it's a shame he's not really trying. Even a man as visionary as him is in some ways is acting like a ghost of the music business model's past.