Nine Inch Nails’ four-part album “Ghosts I-IV” took the crown in Amazon’s 2008 sales ranking for mp3 albums. Taking into account that Amazon’s mp3 store positioned itself against iTunes in terms of revenue, this placement would mean a considerable earning on the band’s side. What makes this interesting is the fact that the very same album was released for free under a Creative Commons license directly from the band’s website. However, people chose to pay for this album. This may seem special, but considering basically all music is still available for free illegally, the same could be said for almost every sale of an mp3 album. People choose to pay because they value the artistic work and the convenience offered by second-generation online stores like Amazon and Beatport. DRM-free offerings may play a significant role in this.
Nine Inch Nails apparently understood this and took the straight approach: Don’t make free downloads illegal; those downloaders are still your fans, and they may well pay for a concert. Maybe because they were given the free option, so many people felt enticed to pay for the download in the end.
Via Chris Anderson’s Long Tail Blog