Last Sunday, a new Nine Inch Nails CD was released… without a record label. Ghosts I-IV – may very well be the final blow that leads record labels as they are known to the beginning of extinction. Reznor let his last contract with Interscope Records expire last fall, then on Sunday made part 1 of his new release (nine songs, DRM-free, 320k mp3) available for free on the Reznor website. he. You can purchase the complete 36-song recording for a $5 download, or a $10 version of the traditional CD shipped, a $75 deluxe edition that comes with both discs, an HD-DVD, and a $300 Ultra-Deluxe edition that Comes with vinyl records and Rezonor’s autograph. All 2,500 copies of the $300 version were gone in 24 hours. In fact, the site received so many visitors that the server temporarily crashed due to the backlog of traffic.

At $300 each, those 2,500 CDs brought in $750,000 alone. At an estimated cost of $30 each to produce, that makes for the kind of profit margins no artist enjoys while tied to long-term recording contracts that pay artist pennies on the dollar for every unit sold. Between ghosts and from Radiohead in rainbow Late last year, the validity of having to wear a label has been seriously questioned.

With this kind of impact from NIN’s new release, expect this to be the first of many such free releases by big artists to come. There’s no question that the power of record labels to control profits, marketing, and ultimately impact sales has just been dealt a major blow.

Afterthought: I hadn’t had time to review the “free” download when I initially wrote this. The packaging is very effective: with dozens of high-quality photos, wallpapers, and a folder of web “goodies” including avatars and banner ads. Nice.