Digital Downloads: You CAN Give Them Away. . .

. . .but asking people to pay for them is another story. At least according to Trent Reznor, whose recent label-free, download-only release of Saul Williams' The Inevitable Rise and Liberation of Niggy Tardust resulted in "disappointing" sales — even at the suggested $5 price point. (Williams, on the other hand, seems satisfied.)

As this interview with Mr. Reznor in CNET points out, five bucks is around the cost of a McDonald's Quarter Pounder. And these days, it's not much more than a gallon of gas. For a full-length album of higher-than MP3 quality.

Partially inspired by Radiohead's online "pay-what-you-want" release of In Rainbows, Reznor and Williams decided to issue their collaboration in a free MP3 version as well as a $5, higher-quality digital download. The experiment, while not quite as frothed over by the press as Radiohead's, nevertheless received a fair amount of publicity.

As of early January, 54,449 people had downloaded Niggy Tardust, with 28,322 of them paying the $5. Reznor, while obviously let down, is philosophical about the figures:

Why do I end up stealing music? Usually because I can't get it easily somewhere else or the version I can get is an inferior one with DRM, perhaps, or I have to drive across town to get it to then put it on my computer or it's already out on the Internet and I can't pay for it yet. . .

So. . . here's the record in as great a quality as you could ever want, it's available now and it's offered for an insulting low price, which I consider $5 to be, I thought that it would appeal to more people than it did. That's where my sense of disappointment is in general, that the idea was wrong in my head and for once I've given people too much credit.

Reznor also seems to support the concept of an "ISP tax," which would essentially make all online music free, for a monthly surcharge of $5 or so. This idea has been advocated by the Electronic Frontier Foundation and the Songwriters Association of Canada, as well as FMC advisory board members Sandy Pearlman, William Terry Fisher and Peter Jenner. We even held panels on this “Alternative Compensation System” at our 2004 and 2006 Policy Summits. But so far, web providers have been reluctant to entertain the notion.

But should recorded music really be free? Reznor thinks there might not be any other option:

It kind of gets into the bigger picture that you've had to face as a musician over the last few years, which in my mind was a bitter pill to swallow, but it's pretty far down the hatch with me now: the way things are, I think music should be looked at as free. It basically is. The toothpaste is out of the tube and a whole generation of people is accustomed to music being that way. There's a perception that you don't pay for music when you hear it on the radio or MySpace.

There's a difficult transition in the mind of the musician and certainly in the mind of the record label. If that is the case, how does one adapt to that?

How, indeed. We're pretty sure that 2008 will see plenty more "experiments" in pricing and digital distribution, both in the mainstream and indie worlds.