The new album, which has ten tracks and clocks in at 43:45, is release under a Creative Commons attribution non-commercial share alike license. The band encourages downloaders to "remix it, share it with your friends, post it on your blog, play it on your podcast, give it to strangers, etc."

This begs two questions: 1. Just how many new albums does NIN have? and 2. Should all artists give away their music for free?

True Fans Theory at Work

What Reznor has done with Nine Inch Nails over the past two months is confirmation of Kevin Kelly's "true fans" theory, on a much larger scale. The theory basically states that any artist can make a living if he or she can cultivate 1,000 "true fans" -- people who will support anything the artist does. The actual number of true fans necessary to make a living will vary depending on the artist and the economics of what he or she produces.

While it is hard to find examples of this in the long tail, we are beginning to see it play out with more and more major label artists. Because Trent Reznor's true fans came through for him for the Ghosts release in March, he was able to release The Slip for free in May. At this point Reznor doesn't have to make money selling albums en masse -- his true fans will still buy the CD and and vinyl copies even though the download is free, they'll still come to his concerts and buy t-shirts and posters.

As we've pointed out in the past, this is also essentially the same theory employed by music startup Sellaband (our coverage), which asks music acts to generate $50,000 from "believers" -- usually in the form of $10 donations from 5,000 true fans. Any band that reaches that goal gets studio time to record a full album and distribution via the site and other retail channels.

However, it is still not clear whether Reznor's success can be duplicated by long tail artists. Clearly, cultivating enough die hard fans to make a living, especially while giving away your core product for free, is not easy. For Reznor it took 20 years and he had the backing of major labels along the way (Reznor's Nothing Records is owned by Interscope, which is in turn owned by Universal Music Group).

"If success for independent artists requires the cultivation of 'true fans' then awareness is paramount," we said in a March post that argued for the positive effect that putting music out for free into viral distribution channels like social networks can have for artists. But for independent artists who don't have major label backing, free might be a Catch-22. Give away tracks to build awareness and cultivate true fans, but try not to cultivate fans who expect everything to be free forever.

That sentence in specific drew a vitriolic response from Nick Carr who called it "the saddest, stupidest sentence [he's] ever read." You can't make money from awareness, says Carr, so thinking that awareness is all musicians want is stupid. He's partially right. Recorded music, even though its reproduction cost is zero, is still a product that can and should be sold, and professional musicians want to, need to, and deserve to make money from their craft. But Arrington is also right: there is value in awareness and musicians aren't owed any money from social networks.

It's interesting to note that this argument has been made before about MTV and iTunes, which some musicians feel were unfairly built on the back of their creative material. From a November 2007 editorial by music producer Jermaine Dupri, "If anything, WE made iTunes. It's like how we spent $300,000 to $500,000 each on our videos and MTV and BET went ahead and built an entire video television industry off of our backs. We can't let that happen again. These businesses exist solely because of our music."

Social Marketing Machine

The wonderful thing about social networks like Bebo is that they provide a ton of viral marketing for musicians and other artists. The other wonderful thing is that they're completely voluntary -- you don't have to upload your work if you don't want to. However, because of the massive amount of free marketing that they provide, most artists would be silly not to take part in the love-in.

Bebo's terms of service specifically state that don't "claim any ownership rights in any Content" uploaded to the site, but that by uploading the content artists grant them "a worldwide, non-exclusive, royalty-free, transferable license to use, copy, modify, publicly perform, publicly display, reproduce, communicate to the public and distribute such Content in connection with the provision of the Service and the Bebo Site, including with regard to the promotion of the Service and the Bebo Site on any media whether now known or hereafter invented, whether or not within the contemplation of the parties."

That's a lot of text, but what it basically means is that you own your work, and if you put it on the Bebo site, they might use it to make money. In exchange, though, you get your work exposed to thousands or millions of users of the Bebo service. Or, in other words, you get awareness.

Knowing the terms by which you participate in the site -- and anyone who uploads anything to sites like Bebo should familiarize themselves with the TOS first -- means that you can't ask for compensation later when the site turns a buck. That'd be like going on the TV show "American Idol," then demanding compensation when you didn't win because your performance was part of the show's content for a few weeks.

It should also probably be noted that most social networks allow, and sometimes encourage, artists to install third party widgets allowing them to sell their work via their profile.

Value in Awareness

Most artists know that there is immense value in awareness. Two large music acts demonstrated that this week. First, REM, whose new album will be streamed for free on iLike starting today until April 1, prior to its official launch. Next, Pennywise, who announced that they will be putting their new album on MySpace free for two weeks starting tomorrow.

Why would REM and Pennywise, two acts who have each sold millions of records, give their music away for free before selling it to their fans? They answer is awareness. These marketing stunts will potentially boost concert ticket and merchandising sales, while probably not hurting album sales from die-hard fans (i.e., the fans who buy every album a band puts out). It will attract a "look-in" audience as well -- people who have never listened to REM or Pennywise in the past will give their music a listen because its being offered free. That added awareness and consumer mindshare might translate into a few more fans and in turn translate into dollars down the road.

The "pay-what-you-want" download schemes from Radiohead and Nine Inch Nails would not have worked as well as they did had those bands lacked awareness. If success for independent artists requires the cultivation of "true fans" then awareness is paramount. The service that social networks provide -- free awareness -- is a valuable one for artists. The relationship between artist and social site is symbiotic: artists upload music and gain a following, social networks distribute music and make money.

What do you think? Are artists owed something by social networks if they upload their music there, even after agreeing to a TOS that says they won't be compensated monetarily? Is "awareness" compensation enough or should artists fight for more from the sites hosting their music? Let us know in the comments below.

"They will drive 200 miles to see you sing. They will buy the super deluxe re-issued hi-res box set of your stuff even though they have the low-res version. They have a Google Alert set for your name. They bookmark the eBay page where your out-of-print editions show up. They come to your openings. They have you sign their copies. They buy the t-shirt, and the mug, and the hat. They can't wait till you issue your next work. They are true fans."

This is interesting given the Nine Inch Nails release. As commenter Shannon Clark pointed out, very quickly the limited edition signed $300 "super deluxe" package of the new NIN album sold out. While clearly Trent Reznor is working with more than 1,000 true fans at this point (especially considering the "super deluxe" edition was limited 2,500 copies), the same concept is at play. Because his true fans came through for him, whatever else happens, Reznor will likely profit from the Ghosts experiment.

But how hard it is to find those true fans? Reznor had the benefit of a long career backed by major labels that help push his music out to a wide audience. There is an interesting debate raging in the comments of yesterday's NIN post about whether any artist has ever gone from obscurity to mainstream success without help from a major label. Of course, Kelly says mainstream success isn't necessary, with work you can connect on a more local, personal level with your true fans.

I've actually seen this happen up close with a friend of mine who plays music in a rather obscure genre. By doing things like playing free house shows, blogging on MySpace and Facebook, having email and IM conversations with fans, inviting fans to help in the process by doing things like copying CDs and designing case inserts, etc. he has made sure he stays connected to his true fans. The fan base he has cultivated, albeit small by record label standards, ensures that there are enough people who will buy every new CD he puts out and come to his shows and drop $30 on t-shirts and stickers that he can continue to pay his bills.

This is also essentially the same theory employed by music startup Sellaband (our coverage). The web site implores music acts to generate $50,000 from "believers" -- usually in the form of $10 donations from 5,000 true fans. Any band that reaches that goal gets studio time to record a full album and distribution via the site and other retail channels.

Kelly's blueprint for long tail success works because he is talking about goods that you sell directly to your fans. Alex Iskold wrote last year how that blueprint won't work in the blogosphere. Because most blogging is ad supported, and because advertising is based on volume, a small number of true fans won't cut it.

However, though Kelly's argument may not apply to those looking to make money directly from blogging, blogging is probably a good way to make connections with and create a base of true fans. So even though you can't make money directly in the long tail of blogging, as Iskold said, perhaps you can use blogging in the long tail to cultivate a base of fans to make money via other methods (i.e., by selling books or booking speaking engagements).