Tuesday, January 06, 2009

CC-licensed NIN album is Amazon's #1 MP3 seller for 2008

The record labels and the RIAA have insisted that peer-to-peer filesharing is cannibalizing the music industry and that aggressive lawsuits and copy protection are necessary to protect the industry. But Nine Inch Nails released Ghosts I-IV under a Creative Commons license which allowed free redistribution from its initial release, while also selling it in MP3 format from its website and via Amazon.com, with no copy protection. The result--it's the #1 selling MP3 album on Amazon.com for 2008 and generated $1.6 million in revenue for the band in its first week, with no cut to a record label.

Looks like record labels are now superfluous for established artists, who no longer need to see their revenue cannibalized by middlemen.

3 comments:

Reed said...

I speculate that the labels will argue that little has changed -- i.e., NIN would never have achieved its level of success had they not benefited from the risk taking, marketing expertise and influence of a major label.

Jim Lippard said...

Even if that's the case (and a few more independent successes like OK Go will disprove that), it's still a different game--one where major labels are solely for building initial success, not for keeping a successful act in business.

This also provides disincentive for any new or breaking act to sign contracts with labels under terms as onerous as they have historically been. The labels make most of their money from established, successful acts, and that era is coming to an end. The size of their pie is shrinking, unless they transform themselves into a business that is focused on providing real value to both musicians and listeners, rather than trying to extract value from the mere fact that they're in an intermediary position.

Reed said...

I can see the labels continuing in that marketing role. Few artists will want to rely on word-of-mouth alone for their future success. Many will want to claw their way above the cacophony of a million competitors for the listener's ear (and wallet.)

So if this is the case we could yet expect that they will continue to sign artists for a cut of the revenue.