Let’s start with a little history.

In October 2007, free of label contract obligations, English band Radiohead rocked headlines by offering their last album, In Rainbows, as a digital download under a pay-what-you-want distribution model. A few months later, in March 2008, Nine Inch Nails, taking the same route, offered the album Ghosts I-IV online under a variety of different versions and price points, ranging from free for part of the album to $300 for a limited edition signed package of vinyl, photo book, and other multimedia.

Both of these releases had music critics, bloggers, and news media talking about the uncertain future of the music industry, as the Internet makes it increasingly easier for users to download music for free and instantly—illegally or not. Though many saw Radiohead and Nine Inch Nails as pioneers of a new digital age of free music distribution, many critics rightfully felt that only mega-bands with massive fan bases could implement such models successfully.

As we approach the two-year anniversary of Radiohead’s milestone in digital distribution, the question has still not been answered. Is it possible for new bands to survive without signing to a record label?

Radiohead already dismissed the In Rainbows giveaway as an experiment, returning to regular distribution through independent label XL Recordings. Trent Reznor, on the other hand, has three big simple words for new and unknown artists: “GIVE IT AWAY.”

A day after praising the Ghosts-like distribution model of Beastie Boys’ Ill Communication through TopSpin Media, Reznor posted a long ramble yesterday on the Nine Inch Nails forums detailing exactly what he thinks aspiring musicians need to do to survive in today’s music climate.

Basically, he says, artists have two options. Those who aim to become pop superstars need only give up the rights to their music and sign up with a major record label. For everybody else, social media is the ticket.

“The point is this: music IS free whether you want to believe that or not. Every piece of music you can think of is available free right now a click away. This is a fact - it sucks as the musician BUT THAT'S THE WAY IT IS (for now),” Reznor conclusively declares. “So... have the public get what they want FROM YOU instead of a torrent site and garner good will in the process (plus build your database).”

Recognizing the hopeless futility of the music industry’s ongoing war against file-sharing, Reznor seeks to instill the same sense of awareness in starting musicians. Yet, at the same time, he does not mean to say there is no hope for money-making in music anymore. On the contrary, his argument is that, like Ghosts I-IV or Ill Communication, music packages offered through innovative online music distribution sites like TopSpin Media, TuneCore, and/or Amazon, when combined with bonuses, will actually sell.

Still, as Reznor sees that music alone will not bring in the heavy cash all by itself, the experienced rocker conveys the importance of a band’s total image towards the ultimate goal of success. Highlighting the power of social networking in the age of Web 2.0, Reznor strongly encourages new bands and artists to create a large fan base that will, in the long run, make the band real money. Being highly creative with their music, bands, Reznor thinks, should also be thinking of themselves in terms of total product, brand, image.

After suggesting artists shoot quick videos, play shows consistently, and start interesting online communities, Reznor sums up the core of his advice in one key statement: “Utilize the multitude of tools available to you for very little cost of any - Flickr / YouTube / Vimeo / SoundCloud / Twitter etc.”

After all, isn’t this why social media exists? No need to wait for the latest band’s song to come on the radio, just login to SoundCloud for a sample. No need to pay street teams to post album promos all over the city, Flickr will take care of photo advertising. Stop complaining that MTV doesn’t play videos anymore, because we have YouTube and Vimeo.

All in all, the music industry veteran proves once again that he understands the immense power of the Web and social networking in revolutionizing yet another form of media. Though we have yet to see this kind of model proved successful in any quantifiable way, his vision seems well thought out enough to be tested. Future rock stars: take heed.

(image source: Nine Inch Nails' Official Photostream on Flickr)