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Trent Reznor And Radiohead’s Upward Spiral

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With the music industry constantly changing, losing money and never likely to act as a cohesive business ever again, some well-known rock and pop acts are foregoing longtime major label relationships to put out music on their own terms. And early returns for them are looking good.

Radiohead, and now Trent Reznor, with his industrial hard rock band Nine Inch Nails, are among the big names in popular music who have released new material on their own respective websites in recent months. Ghosts I-IV, NIN's new and all-instrumental 36-track album went on sale in various, low and high-paying formats March 2 on NIN.com and in its first week generated $1.6 million in revenue from over 800,000 download sales.

Unlike Radiohead however, NIN, who left Interscope Records late last year, plans to keep their new material away from a record label. Radiohead on the other hand, after releasing their seventh studio album In Rainbows online on a pay-whatever-you-want basis in October of 2007, ended up signing with a label anyway, XL Recordings. They released it on CD on New Year's Day. And also unlike Radiohead's music files, which were mid-level quality at 160kbps, NIN's choice of audio quality is of the highest caliber, at 320kbps for mp3s and lossless formats available for a higher price. You could also purchase CDs, DVDs and limited vinyl versions of Ghosts I-IV as well, again, all without any record label's input. The latter came as part of the already sold-out $300 limited edition, of which there were only 2,500 and were personally numbered and autographed by Reznor.

Though not enough time has passed to sufficiently compare the two artists in terms of sales numbers, both appear to be enjoying success with their new directions, not to mention highly acclaimed music, especially in Radiohead's case. Radiohead never made official estimates of their online sales, but various reports say they made millions of dollars on the online edition of In Rainbows, perhaps up to $6 million, with downloaders paying $5-8 on average for the album. Lead singer/guitarist Thom Yorke has said: "[W]e've made more money out of this record than out of all the other Radiohead albums put together, forever – in terms of anything on the 'net."

NIN's successful way of doing business may not revolutionize the music industry as a whole, but it may influence artists in ways Radiohead and independent artists like Ani DiFranco (who runs her own label Righteous Babe) have not to this point. In addition to marketing his new album on his own website, Reznor, who has been in the business for twenty years now, paid just under $40 to have Amazon.com sell it as 36 mp3s for $5 (which matches the lowest price you can pay for it on his own web page). He also gave away the first 9 songs for free on his site and on BitTorrent, presumably so that fans can get a good taste of the album and spread the word about it on the web. You can also get a free, 40-paged PDF from NIN's site. It contains visual representations of all the songs, courtesy of Rob Sheridan and Phillip Graybill.

What was most fantastic, shockingly simple, and perhaps influential about Reznor's self-release is his Amazon.com deal: he only had to pay Tunecore $38 to distribute the Ghosts album to Amazon's mp3 store. This method of marketing allows artists to own their music AND keep 100% of all royalties. All for under $40!

If more high profile artists take after NIN's all-encompassing strategy of selling music — especially the use of Tunecore — this could inspire who knows how many legions of musicians to come up with similarly unconventional album packages that are attractive, innovative, and relatively cheap to make and sell. And no record label would be needed.

But without labels, big or small, promoting your material would still be a big challenge, as would sustaining a career without a recording contract in general. That's where a growing number of independent media companies and concert promoters like Live Nation come in. This could be a highly rewarding or bad career decision for musicians, and may or may not result in the same kind of contractual and business-related headaches artists experience with record companies.

Newly inducted Rock Hall of Fame member Madonna recently said she will be leaving Warner Bros. after her new album Hard Candy comes out next month. Instead, she will work with Live Nation on all future releases — minus one greatest hits CD she contractually owes Warner Bros. — for the next ten years. Thus, it remains to be seen how an artist even as big as Madonna succeeds with a concert promoter running the show instead of a label.

In all, there may be plenty of retro acts out there trying to make hits by recycling the past, but there are a few forward-thinking star musicians trying new ways to market the music you crave. Who knows which new methods, if any, will have a lasting impact on the music industry, but at least Reznor and Radiohead are at the moment making a significant contribution to popular music once again.

Note: Pre-orders for the CD and other physical versions of
Ghosts I-IV are available and will be shipped out, starting April 8.

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About Charlie Doherty

Copy editor/content writer for Penn Multimedia; print/web journalist/freelancer, formerly for Boston Examiner, EMSI, Demand Media, Brookline TAB, Suite 101 and Helium.com; co-head sports editor & asst. music editor at Blogcritics Magazine; Media Nation independent newspaper staff writer, printed/published by the Boston Globe at 2004 DNC (Boston, MA); Featured in Guitar World May 2014. See me on twitter.com/chucko33, myspace.com/charlied, & Facebook.
  • http://theglenblog.blogspot.com Glen Boyd

    I thought I read somewhere that the NIN album was going to be released at a later date through traditional means (a la Radiohead). Am I wrong about this?

    -Glen

  • Charlie

    Glen, if you can provide a story link that says Trent plans on signing to a record label at a later date to release the Ghosts album, please do so.

  • http://theglenblog.blogspot.com Glen Boyd

    His own website talks of a $10. CD which can be ordered now for shipping April 8 (similiar to the Radiohead deal): Read it here.

    Presumably this would be through his own label. But what your article indicates is that “unlike Radiohead” there would not be a traditional release. Another story about this can be found here.

    He is not “signing” to a label, true. But he is releasing this album in traditional format in April. Like Radiohead did with in Rainbows.

    Finally this from the New York Times story dated March 4:

    Nine Inch Nails is offering a digital download of the entire 36-track “Ghosts I-IV” collection for a flat $5 from its site and Amazon.com. The band will offer a CD version in a two-disc package for $10, with sales through its site or through record shops starting April 8. (A $39 vinyl version will be available the same day.)

    -Glen

  • http://theglenblog.blogspot.com Glen Boyd

    You also might want to reference Tom Johnson’s article on this from a few weeks back.

    -Glen

  • Charlie

    Glen, you just don’t get it, do you?! I wrote that NIN won’t be releasing their new album through a record label! I also wrote that they have released the new recordings on CD, and vinyl, along with digital files. Why is that so hard for you to understand?

  • http://theglenblog.blogspot.com Glen Boyd

    The confusing part is that this article strongly indicates that NIN is doing business in a way different from the way Radiohead did.

    It does not mention the latter (April 8) date for a traditional, physical 2 disc CD package to be sold through record stores for $10. What I “get”, is that they are not going through a major label. What I “don’t get”, is how the way they are actually marketing this, is in any way different than the way Radiohead marketed In Rainbows, as your article indicates.

    The only difference here is in the better bitrate (which I applaud, because the original DL version of In Rainbows sucked, which is why I bought the far superior CD version in a store after buying the initial download), and the fact a major label doesn’t appear to be involved…yet…

    But the marketing scheme is hardly “unlike Radiohead.” It is in fact, nearly identical.

    -Glen

  • Charlie

    Glen, is Radiohead using Tunecore to market In Rainbows? No. Does NIN allow you to name the price you want to pay for their album? No. Did NIN decide to go to a conventional record label just a couple months after supposedly revolutionizing the industry? No. You see, there are some differences, which I’ll go more into later.

    You know something, first, you apparently wrongly told Connie that I wrote (in my draft) that NIN was ONLY selling the Ghosts album digitally. Then you pretend like I never even wrote that NIN was also selling the album on CD and vinyl.

    And now you’re changing the argument you’re having with me and saying that Radiohead and NIN’s music marketing are no different. If you want to talk about that fine, but first acknowledge that your previous arguments and assertions of my work were wrong.

    First of all, there are similarities between the choices consumers have to buy NIN’s and Radiohead’s albums: both can be bought digitally and on CD. But Radiohead didn’t stick with their independence of record labels, NIN has, and as far as I know, will continue to. Also, NIN’s outreach and use of technology to promote Ghosts (via Tunecore, pdfs, BitTorrent, YouTube, etc), along with their interaction with consumers (via remixing technology for listeners to take advantage of, and now filmmaking of the tunes by fans) was more extensive than what Radiohead did to promote IR.

    Overall, I think what NIN has done and continues to do with their new album will stick with fans and aspiring artists more so than what Radiohead did – and remember, not everyone was happy with the quality of the IR downloads. That’s my opinion. Feel free to argue that.

  • http://theglenblog.blogspot.com Glen Boyd

    The fact remains that you failed to mention the latter physical release date to record stores. As far as editing stuff goes, that discussion should, and probably will take place off-site. The thing is Charlie, I actually like this article. It’s just not complete without the whole story being told. A good w2riter would want to fix that. I know I would.

    We need to continue that part of this discussion off-site. You know the e-mail. I’ll be back from dinner in a few hours to take that up with you if you like.

    -Glen

  • Charlie

    Oh, now it’s the release date for the CD version you’re saying I should’ve included? You might have an argument there but give me a break, Glen. That wasn’t what started this back and forth — maybe I shouldn’t have brought the emails into this, you’re right — and besides, I gave all the relevant details for people who want the album now, and provided a link to nin.com, which is just a click or two away from all the full details on every version of Ghosts, including the release date and pre-order of the CD + digital version of it.

    Glen, a release date for a physical CD is important, but in this case, it’s not so much. A “traditional” release date would mean you can’t buy an album at all until that date. This album has been widely available to buy on nin’s site since March 2nd, like I wrote. It’s sold nearly a million copies since then. Just quit picking arguments with me and let’s move on. I’ve got dinner to eat now too:)

  • http://theglenblog.blogspot.com Glen Boyd

    My argument hasn’t changed at all. It has in fact, been quite consistent. Go back to the very first comment I wrote here and read it. What does it say?

    Then you asked me to provide links to back this, which I did.

    Look man, all I’m saying is that in order for a story to be 100% accurate and complete it should contain all of the facts. Leaving out the fact that a physical (and yes, what I would term traditional) release to record stores was planned, coupled with the assertion that this makes NIN’s release somehow “more” revolutionary than Radiohead’s (that “unlike radiohead” line of yours) makes this story somewhat misleading, at least in terms of intent.

    And yes, I pointed this out before it was published, despite the fact that I otherwise “green-lighted” this, because I saw a potential red flag there. In order for a story to be 100% accurate, it must also contain all of the facts. Thats all I’m saying.

    Again, the editing part of this conversation should take place off-site, and I am back from dinner now. You know the e-mail.

    -Glen

  • Charlie

    Since I can’t go back and edit my last post Glen, let me add one more thing before I go: I still haven’t found any story that says Ghosts will be available in actual record stores. It’s not for example, available for preorder at my local Newbury Comics store like In Rainbows is. Maybe it will be, I don’t know. So maybe you or someone else who reads this may know of a conventional store you can get this CD, but I have yet to find one (not even with your links).

    As far as I know, you can order the 2-cd set (plus one-time only digital files) direct from the NIN website and have it shipped to your home. I don’t care for the actual cd version actually, and am quite pleased with the $5 digital purchase.

  • http://theglenblog.blogspot.com Glen Boyd

    I’m going with what the New York Times says on this (quoted and linked above). See you off-site for further discussion.

    -Glen

  • Charlie

    Your argument has changed and did NOT start with this thread. See you off-site.

  • http://www.somrod.com/blog Mark Sahm

    Nice article, Charlie. Both RH and NIN are great artists, and this freedom suits them well, no matter what i’s they decide to dot in getting it to the public.

    For me, the main key of the web freedom is that the artist does not have a door of red tape to get through from a music label once you have an album complete. I mean, Trent could finish mixing a track and post it to his site 5 minutes later for sale to the entire world.

    That’s the real future of this endeavor.

  • Charlie

    Mark, you’re exactly right. The idea is to be able to cut out the middle man (i.e. record labels) when marketing your work and still be able to widely sell it (online or elsewhere), and also have more freedom and control/ownership of your work.

    Speaking of artistic control, though Thom Yorke said (as I wrote) that he and his band have already made more money from their new record than from all previous albums combined — owning their own studio may have contributed somewhat to that, which saves them some big money –, I’m not sure Radiohead has total ownership of their In Rainbows sales now that they’ve signed with XL Recordings. But I do now that Trent, because he’s using companies like Tunecore and Creative Commons, DOES have ownership of his master materials and therefore makes more money from his record sales than he otherwise would. [It used to be that artists would sign a contract with a label but have no publishing rights and make something akin to getting pennies for every dollar’s worth of music they sold through record labels].

    Both bands have been sucessful in their self-releases, but what Trent did (which was somewhat different), if he sticks with the totality of his wholesale marketing, interactive as some of it is, and 100% copyright control rights, and has continued success with it (online or in conventional stores in the future), could be the future of how artists market their music.

    Just because it worked for Radiohead and NIN doesn’t necessarily mean the average artist will have anywhere near their level of success (which is subjective, I realize). The REAL money-making, no matter what, would have to be done on the road, which artists have largely known, anyway.

    You have to be popular to have the kind of self-release success these two are enjoying, and they didn’t get where they are today on their own, as everyone knows. Even though record labels are a drag, they always took care of marketing and other important issues; the big names usually gave you cash advances to buy whatever you needed to record your music as well.

    Doing things without a label means DIY (everything related to recording a record), or doing what Madonna’s planning to do for the next decade: trusting a concert promoter to handle both records and concerts (but that would mean the middle man is back in action). I don’t know if the average artist would be able to do that and have much success – it’s rather new territory.

    Will all or any of these approaches be the norm or work at all for lesser known artists? Who knows. We shall see soon enough. What I think will happen is, knowing that you can only go so far with a Tunecore route, independent labels will replace soon-to-be extinct big name labels as far as maximum exposure goes. But more importantly, faced with the competition of on-the-rise independent, inexpensive and pro-artist-ownership marketing companies like Tunecore, will allow bands/singers more artistic control/ownership of their music than ever. Ok, I’ve said more than a mouthful on this so enough out of me (for now<:).

  • http://www.magicjunkradio.com Mark Sahm

    Let’s just hope that Tunecore and similar services maintain their bottom line of keeping the artist rights first, and that their services don’t get bought out by a corporate label!

  • http://www.tunecore.com Peter Wells

    We will, Mark, so long as I’m here–and I co-founded the company, and have no intention of leaving anytime soon.

    This is WHY we founded TuneCore. It’s UNFAIR to act like a gatekeeper, it’s UNFAIR to take a percentage unless it’s earned. Our service is flat (deliver your music, deliver back stats and money), you deserve a flat rate.

    I’ve been reading this thread for a while. It’s interesting stuff! Thanks. Holler if y’all have any questions.

    –Peter Wells
    Co-founder, TuneCore.com

  • Charlie

    Wow! The founder of Tunecore read this article and thread? Cool. Thank you, Peter. I’m sure you were thrilled when Trent Reznor called you. I know lots of musicians are using your company nowadays — I get emails from Guitar Center promoting your service — but it always helps to get a big name every once in a while like him. That’s one of the reasons why I thought what Trent did by using your service was a bit different and potentially more inspiring for future recording artists than what Radiohead and others did recently.

    I don’t know totally how Tunecore works business-wise, but I think I can assume (by your comments) that musicians who use it are helping theirs and your bottom line in a much more equitable fashion than artists previously did with most record labels. Am I right?

    Also Peter, I don’t know how big a success Tunecore is right now but do you think there will be enough Tunecore copycats in the future to put a lot of record labels out of business? And, seeing that you’ve done advertising with Guitar Center/MusiciansFriend recently, what are your plans for further marketing of Tunecore in the music industry?

  • http://www.tunecore.com Peter Wells

    Hi Charlie! Yep, I comb the Web, always looking for what folks have to say about us and the industry. There’s a lot out there, as you can imagine, and I don’t always comment, but this time I wanted to.

    You hit the nail on the head: we came up with an equitable arrangement and so far, it’s helped make us hugely successful (just had our first million dollar *month*) and pretty much offers the first true break for artists in this industry. We charge $0.99 a track, one time, to deliver a song to the stores. Tracks live on an album, and albums, no matter how many tracks they have, cost $0.99 to get to any one store, and$0.99 more for every additional store: one time. Usually comes to about $15 bucks up front, since most folks want to go to all the stores (all five iTunes, AmazonMP3, all the others). Then it’s just $19.98 a year to maintain the album. Total outlay, about $30 first year, $19.98 thereafter. That’s all Trent paid.

    And that gets you worldwide distribution: anywhere, everywhere someone has a computer and access to those stores. Labels can get you that too, of course, but then they take 85% of everything you make. That’s fine, labels DESERVE that, if they promote you and really do a lot for you, like give you a fat advance, make up posters, set up gigs, land you serious press, pay to shoot your videos, on and on. Labels still have their place, they’re not the enemy. It’s when they take 85% (or more!) and DON’T work for it that it’s a crime, in my book. And other places that deliver your music and take a cut (30%, 15%, 9%) also don’t do anything to earn it, so that’s also not fair.

    Gary, our CTO, wrote some seriously amazing computer code, so we can deliver music extremely efficiently to iTunes and the other stores. And we automatically process back the money and sales data, so that’s really cheap and easy too. We figured out how much it REALLY cost, then came up with pricing that anyone could afford. That’s how it’s fair to us (our costs are covered) and to the artists (no-strings-attached, keep all rights, not ruinously expensive).

    We’re all over Guitar Center because GC invested in us last year. We’re partners now. They figure if more people have a fair way to get their music heard, they’ll make more music, and that means they’ll buy more instruments! That’s it, foresight.

    And yes, we’ve got lots of competitors now, but so far, none offer as good a deal. There’s CD Baby, which costs more up front (they charge $20 for bar codes) AND takes 9%. There’s lots of little ones that charge $65, $100 and one even $495! That’s just psycho. I know from experience it doesn’t cost THAT much to get music to iTUnes, it’s just a file, after all.

    I don’t want the labels out of business, I just want them to do what they do best, and for those who want to go it alone to have a fair, easy way to get into the stores. It’s the “gatekeeper” thing I want torn down. Who’s to say your music isn’t as good as something a label A&R guy spotted? Let the fans decide, and that can only happen if they can hear you, and pay you a fair price for your music, and let you survive as a musician.

    I don’t always check in everywhere, feel free to drop me a line [personal contact info deleted]. Thanks for the debate, good stuff!

    –Peter