You asked how to sell music:

Originally, putting music on a medium and selling the medium worked. The trouble began when the medium was irrelevant: now, the content and the medium are separable from one another, and the content can be transfered without medium. The reason piracy is an issue is because the content can no longer be controlled, and because the label industry is addicted to the concept of the medium.

The solution proposed currently is digital rights management, or DRM. The idea is to put limits on how exactly the content can be enjoyed; for example, The iTunes DRM allows the music to be played on a computer which is "authorized" by password to play it, it may be burned to a CD a certain number of times, and cannot be played on an unauthorized computer. Back in the first days of the iTunes Music store, the DRM was cracked very quickly by hackers, and a new DRM would be release, quickly followed by a brand new exploit to crack. The DRM has gotten better: after about 4 years, it has gotten to the point where it takes about 4 months to crack a new DRM. Superficially, the battle may seem to be between defective execution and the people who exploit it, but this is untrue: it is the battle between defective design and the unavoidable demographic of people who will be convinienced by the limitations of DRM. From a purely technical standpoint, DRM can never be succesful simply because consumers will resort to increasingly primitive ways to circumvent it, the simplest method being placing a microphone in front of one's speakers and recording. DRM is having a gumball machine with the top open. It is a broken idea.

Unfortunately, the medium and the content have been seperated for good. The internet is far too pervasive and the people who use it are far too clever. So why do people still buy CDs at all? Here's a better question: why does nobody pirate books? Some people would probably say its because less people read books or, at least, less people who are inclined to pirate something via the internet read books. Perhaps this is true. However, I read books, and I pirate music and movies. Why do I buy books but I don't buy music or movies? Let me tell you:

There's a writer named Cory Doctrow. You've probably never heard of him. He's the son of an accomplished novilist. He writes science fiction books and gives them away on the internet, and he sells printed copies as well. I read his first novel, Down and Out in the Magic Kingdom, before internet piracy was an issue at all. I downloaded it for free and read it. The truth is, reading on my computer screen was crappy. It sucked. I read the book, but the experience of reading the book really sucked. So I went out and bought the book from his site. I knew the book was shitty. I had read the book, I had noticed it was shitty, but I had to have the shitty book in its tangible form. Why? Becuase I was getting something more. I got the feeling of the paper in my hands, I got the luxury of lying in my swiviling chair by my window and propping the book on my knee as I read it. The book was still shitty, but I payed Cory Doctrow 12.00 dollars.

Obviously people still buy CDs. But if you asked those people why, it's probably because they really like the band and the little piece of paper you get with it is important to them somehow. It adds to the experience. However, the vast majority of consumers are not getting anything more. Whether they buy the CD, get it from the DRM'd version from the iTunes music store, or pirate it, they experience the music in the excact same way: they listen to it with their computers or on their iPods. Buying music or movies does not give the consumer anything more, whereas buying a book does.

I'm not a fan of Nine Inch Nails. I wouldn't say Trent Reznor is untalented, I'm just not personally a fan. I am a fan, however, of Lao Tze. Lao Tze was born in China 5000 years before the internet or music piracy, but apparently Trent Reznor is familiar with his stuff. Trent Reznor put certain tracks from his upcoming album, Year Zero, and put them on thumb drives (DRM free!) and hid the thumb drives at concerts. Bit by bit, tracks were leacked individually. Pretty soon, the entire album was circulating throught the Internet, DRM free, and with no coorporation behind it. Reznor said:

"The USB drive was simply a mechanism of leaking the music and data we wanted out there. The medium of the CD is outdated and irrelevant. It's really painfully obvious what people want — DRM-free music they can do what they want with. If the greedy record industry would embrace that concept I truly think people would pay for music and consume more of it."

By April, Reznor had the entire album available free to stream on the internet. In March, Reznor released a multitrack source file of one of the songs in Garageband format for anyone in the world to remix. The CD was finally released on thermo-dynamic chrome disk which was black upon purchase and, when played through the CD drive, the heat created by the computer erased the black paint to reveal a message:

"Consuming or spreading this material may be deemed subversive by the United States Bureau Of Morality. If you or someone you know has engaged in subversive acts or thoughts, call:
1-866-445-6580
BE A PATRIOT - BE AN INFORMER!"

The album has scored 2 on Billboard 200, 2 on United World, and 1 on Billboard Rock.

So if you want to sell music, give it away. [That's what Lao Tze would tell you.] The trick to getting people to buy it is to give them something else. Think outside the disc.