Trent Reznor of Nine Inch Nails, How To Destroy Angels, etc. fame recently took part in a very insightful (and admittedly lengthy) interview with Tunecore.com. Along with his recent film score work, Reznor shared his thoughts on upcoming projects, the state of the record industry and more.

When asked why he originally parted ways with Interscope Records and abandoned the traditional record company models, he offered:

“Well [pauses], that time would’ve been about two thousand…eight-ish, somewhere in that neighborhood, and, the true reality of that situation was: the record deal that we had signed years and years before had escalating advances based on the current state of the industry when that was negotiated. Meanwhile, the industry has collapsed, and those advances didn’t make any sense for the record label at that point.

They were astronomical compared to what an expected return would be. We were kind of presented with the situation of, “Hey, if you wanna stay here, let’s renegotiate something that’s more realistic for us in terms of an advance, or, do it on your own.”

Now, at that time in my life, it felt very much like, “OK. The record business is broken. The model is broken.” I’d go through periods of having to look in the mirror and say, “Let’s see. I just made an album I spent a year working on. I turned it over to the record label to get manufactured. It leaked, and I’m online, just boiling furious, at fans who’re talking about how much they love this new album, that they just stole.”

And then I’d think, “Wait a minute. They’re not standing outside my house, bootlegging copies out the back of their van, y’know, to make money. They’re sharing their excitement about songs I’ve written, and music I’ve done. And they’re excited about it. And I’m pissed off at ‘em, because what?

They didn’t wait until a month from now, when they’d have to drive to a record shop (if they can find one,) to buy a piece of plastic they don’t want, then rip it back to their computers, to…man, this sucks.

Ok, something’s not right.” Or they can buy it from iTunes at a lower bit quality, which at that time was also copy protected, which I was strongly against.

It becomes very clear, if you can remove the emotion from the equation, that, OK. The delivery system is broken. And the relationship between fans and artists and record labels is also broken. I thought I was smart enough to get that right. What I learned is it consumed… The following years coming up to the present, have been spent trying to experiment with different business models.

First and foremost, spending time paying attention to what consumers want. You know, it all sounds like market research and boring marketing-type crap, and it is, but it also became clear: nobody else has figured it out. And managers aren’t gonna tell us what to do, and record labels, it’s clear they don’t know what to do.

And the internet at large, their proposition that everything should just be free? That’s great if you’re a kid at home, it’s not so great if you’re a content provider that’s thinking “OK, how am I supposed to keep doing this if everything is just free?” That’s not right, in my opinion.

But nobody wants to be Metallica and, stand up and [say] “Hey, on the one hand look how rich I am. On the other hand hey man, you should be paying me, poor college kid.” Nobody wants to be on that side of the argument, including them.

So, between putting out Saul Williams’ record and experimenting with the pay-what-you-want kind of model, which led to pretty eye opening and kind of sad results, in my opinion, to rethinking how one makes money. If I’m gonna go on tour, and here’s a concert ticket, I’m hoping you come see, you know what? I’’’ throw the record in with that, it’ll all come into the same pot.

Rethinking different ways to get your message out to people, and also trying to be consumer friendly. What do people want? They want stuff that’s not copy protected. OK. They want to be able to share it with their friends? OK. They’d like higher quality digital files? OK. They’d like to feel like they’re getting some sort of value for their money? I understand that. OK.

How do we make that all make sense? You know I’ve spent a lot – more time that I would like to spend in the last few years – trying to figure that out.

And, where I’m at right now is realizing that it’s a tough road, and I think that we are in between business models. It felt clear to me that labels didn’t know what they were doing back then. But I’ll say, on the other hand: doing everything yourself? When we went independent, we went independent-independent. We didn’t go, “Let’s go with an indie label,” which has the same business model, but can brag about being an independent rather than a major label, as if that means anything.

We went direct from us. That’s it. There is no label. The label‘s me and my manager, as loud as I can shout on twitter or anywhere else. And you realize the shortcomings of that, that you’re only as loud as people that want to listen to you. It is helpful to have people supporting what you do, and getting the word out, and, y’know, I don’t know what the cool record shop is in Prague.

And therefore my record isn’t in that store in Prague because I didn’t know about it. I care about Prague, but I don’t care enough to go to Prague to ask somebody what record shop, and then strike a deal with, you know what I mean. It’s beyond the scope of what I want to personally do.

So, there’s another long answer saying: I don’t know. I’m not disenchanted by things. I think in a lot of ways it’s the wild west right now, and it’s wildly exciting, and it’s interesting when something’s been disrupted this greatly, the record business. There’s limitless potential, but it also requires a lot of effort. I have to do a lot of things now that I didn’t have to do back in the day…”

On what needs to be changed with the publishing aspect of the music industry:

“…I started my career in the late eighties, where the template was: sign on with a record label. That’s you’re ticket to admission. You have to have distribution, they have it tied up – promotion, all the team in place.

And then just try to work as hard as you can, and over time, what I was hearing when we were first getting signed was, by your third or fourth album if you get your audience, that’s what we’re aiming for, and we look at you as a Prince type character, with a career like The Cure, or Depeche Mode or bands that’ve been around for a long time and that will continue to be around. Ok, all right, I’m ready. I’m in for the long haul; I’m ready to do this.

Then you start to learn as you see contracts. Wow, whoever went along with this contract originally, it’s not a very fair contract. Let’s see, you as a record label lend me some money to make a record, and then I have to pay you back all that money. And after I pay it back, you own it forever. Wow.

And then I get to make this little sliver on top of that, if I’ve recouped. But you get to control how much I spend on marketing and other things I have to pay you back for. So, wait a minute. I could sell this many records and still never recoup? And you do all the accounting?

And then when you don’t pay me, ever, then I have to spend twenty-five grand to audit you, for you to then tell me “Oh, yeah, we do owe you this much.” That kinda sucks. And then [there’s] the mysterious, purposefully convoluted and tangled world of publishing, and how confusing that is. And a lot of musicians, myself included, that just wanted to work on music, and hoped someone had figured that out.

And you realize – just what you said – some of the unfair business practices and precedence that’s been established. And I’m not saying that no one should benefit from songs I write, or that I do all the work and I should make all the money. But I should make some money, and I should be able to clearly see where that money is coming from, if I did all the work, essentially. I wrote the song, I came up with the idea.

But then when you see the industry start to collapse, which means you’re kinda happy to see some of it collapse, but then you’re sad because also my livelihood is in danger, and I think how am I going to support myself and a family in an industry where we’re essentially making typewriters, you know? Nobody wants typewriters anymore. Everybody will reads, and everyone still writes, but they don’t use these clunky machines and, ah shit. OK.

I think the promise, and what I would hope more than anything, is that when we get to this new business model, whatever that is, on the record label side and also on the publishing side, [is] that somebody is strongly speaking up for artists’ rights when that starts to get figured out. And that in an age of potential transparency, that the actual content creator has a seat at the table, and it’s not ALL the things glomming on to it that are carving off their parts.

Now, what have we seen happen? Is the iTunes payout model fair to artists? Not in my opinion. What I consider, from a consumer point of view, the next good business model, the next thing that makes sense, is if there were mass adoption of music subscription services, like Spotify.

I think in an age of broadband connection being everywhere, everyone having powerful computers in their pockets, this sense of feeling- normal people feeling comfortable with the idea of the cloud, and their data’s somewhere but it’s is secure, it’s somewhere, and they have access to it, having all the music available in the world available to you at your fingertips, anywhere you want it all the time, that’s pretty cool.

That requires some education on the part of those companies, to help people to understand what that is. But I think that could make sense. But is it fair to the artist? Not really. Look at the checks you’re getting paid from those services. It’s not an inspiring amount, and it certainly doesn’t replace lost revenue.

But I think what you’re doing is a huge step in the right direction. On the publishing side of things, shining lights in those dark corners, and transparency, and the always-painful overhaul of when it’s time to shift business models. When something becomes outdated, there’s a lot of resistance to the painful realization that things have to change.

In my case several year ago, sitting around realizing “Hey, that kind of hazy dream I had, of sitting around getting checks for record royalties for the rest of my life? From work I did years ago?” You know, Eagles style, “Hey, Hotel California, another billion dollar check shows up.” It’s not gonna happen.

Being able to make a sizeable amount of money from selling a record. It’s not gonna happen anymore. That’s a bitter pill to swallow. Music is free. I don’t think it should be free, but music is free. I can right now search in Google for any music that there is, and find it free. And so can anyone else with above-rudimentary searching ability. That’s a fact. That’s what you’re competing with.

I’m not saying it’s right, but that’s what it is. To not acknowledge that is being foolish. I think we’re in a time of transition, and I really hope that when the dust settles, and it starts to become clear, ”Hey, this makes sense,” that someone has had the balls and the integrity to speak up for the side of the artist.

Without the artist, as you said, there’d be a lot less jobs around the music industry. It’d be nice to see, for a change, that the artist is represented in that. To many people’s surprise, not all artists are rich. Everyone that puts out a record isn’t driving a Bentley and living a Cribs lifestyle, in fact that is far more mythology than it is fact.

And artists are good people to have around, making stuff that can embellish people’s lives. It would be nice to try to establish a new paradigm where there’s a sustainable lifestyle.”

Read the whole interview over at Tunecore.com.