Creative Commons provides easy and effective ways to offer up your content without abandoning all rights to its use—free distribution might be allowed, for instance, but only as long as the author is attributed and the distribution is noncommercial. Sounds great for hippies and Web 2.0 types, but what big-name artist would actually commit this sort of career suicide? Nine Inch Nails, for one, and Trent Reznor & Co. produced the bestselling MP3 album of 2008 at Amazon.com, even though the music could be had for free.

Ghosts I-IV offered four albums of instrumental music, but Reznor bypassed the normal distribution channels and released the music himself. Ghosts I was offered as a free download and was even thrown up (legally) on The Pirate Bay for anyone to grab, but the entire set of albums was offered under a Creative Commons license. That license allowed free sharing and remixing of the entire work.

Though fans could grab the music free of charge, Reznor racked up huge amounts of cash by offering limited edition sets with extras like Blu-ray discs and deluxe packaging; this was widely praised as a way to profit from scarcity while simply giving away the stuff that's easily copied (i.e., the digital bits that make up the music).

But Reznor actually made a ton of cash from even those basic digital bits. Forget about the deluxe artwork and the high-priced, limited-edition extras; Reznor actually sold more copies of the basic Ghosts I-IV albums through Amazon's MP3 store than did any other act in 2008. He beat out Coldplay, Death Cab for Cutie, Vampire Weekend, Beck, and hundreds of others, and he did it without a label and by giving the music away.

This is exactly the sort of success story that Creative Commons likes to highlight ("See, it's not just for hippies and anarchists— it's for actual business use, too!"), and the group did so Monday with a blog entry that attempts to answer the question of how Reznor succeeded.

"So why would fans bother buying files that were identical to the ones on the file sharing networks?" asks Fred Benenson of Creative Commons, and he has an answer. "One explanation is the convenience and ease-of-use of NIN and Amazon's MP3 stores. But another is that fans understood that purchasing MP3s would directly support the music and career of a musician they liked. The next time someone tries to convince you that releasing music under CC will cannibalize digital sales, remember that Ghosts I-IV broke that rule, and point them here."

Assuming the answer is correct—fans will directly support work that matters to them—a few additional questions arise. Certainly, a Creative Commons license doesn't mean penury for all musicians, but Reznor had the incredible advantage of a large fan base before taking over music production and distribution. Is the model of "do it all yourself, control all rights, release the music freely" really a feasible one without getting some name recognition first?

Second, would CC licensing work for labels? That is, could an indie label release all its music for free sharing and still see good financial results? The feeling of directly supporting an artist would be lost, though there's always the convenience and ease-of-use argument for downloading from a site like Amazon for those who have more money than time.

Question and answer



I put both questions to Benenson. Regarding the first one, he notes, "Sometimes people say that Reznor has an advantage over independent musicians because he's previously benefited from marketing and traditional record label support. What isn't taken into consideration is that Reznor, through splitting his royalties and earnings over the years, has actually paid for that marketing and then some."

Given the ease of digital distribution today, artists are in a better position to be "mini-labels" of their own, hiring marketers and tour managers themselves, as needed, rather than signing away control and huge chunks of revenue.

As to the second question about traditional labels adopting CC licenses, Berenson says it's not just possible but already happening.

"There are many labels that use Creative Commons licenses. Magnatune is an example of one that uses CC licenses exclusively—you can download everything the label has released for free. They make a significant amount of their income by licensing that music commercially and splitting the revenues with artists. I have about a dozen other labels if you'd like a list."

But what about that feeling of direct connection to the artist that buyers get when the artist gets to keep all the cash you pay for their work? "While a lot of NIN's success with Ghosts can be attributed to fans interested in supporting Reznor digitally," Benenson says, "I think this dynamic can work for labels too. That is, if labels can properly message what they do as something that helps artists and new talent (rather than exploiting them), then I think fans will act supportively.

"There's an opportunity to add value to the once-cut-and-dry music transaction where it has never existed before—consumers love feeling that they are contributing to something good, and if a label can transparently represent itself (and perhaps more importantly, distance itself from the behavior of the majors) as well as offer new value to its community, then I think the same affect as Reznor's Ghosts offer can be achieved."

Licensing music for free and noncommercial distribution might not take over the world in 2009—no other act in Amazon's list did so, though Radiohead (#11) did. Still, it's encouraging to see examples of artists making a living without having to adopt a confrontational approach to fans. Under Reznor's model, everyone wins... well, except for the major labels, which a decade ago would have raked in much of the profit from his work.