Trent Reznor, lead singer of Nine Inch Nails recently announced the cutting of the cord between himself and his record label. And, to celebrate one of his first actions as a free agent was to offer his new album on a pay-as-you-like download model similar to that provided by Radiohead.
According to his own data:
- 154,449 consumers downloaded the album
- just under 20% paid the requested $5 for the album
- Total royalties = $141,610
- Total royalties kept by Reznor & pals = $141,610
Compare this with hypothetical launch through label
- 50,000 people pay for the album @ $16 per CD
- Royalties = $800,000
- Royalties kept by Reznor and pals = $80,000
From our rather unscientific extrapolation, offering music for free appears to be more profitable.
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