Steve Martin breaks down the economics of the download vs. the disc.

Question: Is downloading free music a positive or a negative?

Steve Martin: Yes and no. I mean, I think it’s great in that people are realizing that- I like the fact that the business is shifting away from just overpricing discs to, you know- in order to subsidize executives’ lifestyles- ‘cause that’s all it was ever about. I mean, have you ever been to the Sony Club? It looks like the Death Star. It’s incredible, and that’s money that I think should go to artists. And if an artist- I’m not gonna name names- can pay themselves five to seven dollars a unit on a million records, versus getting paid, you know, a dollar a unit on three million records, which would you rather do? It’s a little more work, and you have to be able to find people who are smart around you, and that you can trust, to help you do that, but by and large, you know, if you’ve built enough of a fan base that people will just go to Radiohead.com, or in the case of Nine Inch Nails, Nin.com, or even other people, Beck.com, RyanAdams.com, Marsvolta.com, any- almost any of my clients- you know, people aren’t going to Universal.com to find out about these artists. So, I think it’s a good thing in that it’s made- a couple things- it’s made music more available, which I don’t think is a bad thing because even if I do hear something for free, you know- I’m 43, but I’d still be inclined to go and like see the band live if I was really excited by a couple songs and they didn’t have a record out, or there’s no other way to find out about them. I think it really hurts people who just can’t create more than one or two interesting songs. The flip side of that is the people that you hear talking about like suing kids out of existence for doing that- it’s like trying to stuff toothpaste back into a tube. It’s done. You have to cope with this being the new reality. You know, these people aren’t people who are saying, I wanna get that money back so I can lavish it upon the artists. You know? They’re people who wanna, you know, who wanna be able to fly private again instead of commercial. You know, their budgets have been cut. This is reality, you know? And that’s what they’re upset about. They wanna have, you know, their own separate label Grammy party instead of a combined Universal or BMG or Sony BMG one. You know? That’s the kind of stuff they’re concerned about. And,yeah, in that respect, the party’s over. And the other side of that is that people- like, when you hear artists talk about suing kids out of existence. It’s always people like Gene Simmons- someone who hasn’t made a record worth buying since like 1978- you know? So, it’s like- you know, people still come to see you live. Sorry, you don’t get money off your records anymore, but they’re not good. People are coming to see you play songs that you wrote from 1973 to 1978, and they don’t wanna hear anything else other than that. So, that’s why you’re not selling records anymore. You know? I mean, I look at something like, you know, Radiohead gave their record away for free for God knows how long- three months, two and a half months?- something like that- and it still sold over a hundred thousand the first week. You know, the people are complaining- like, the new KISS record came out- they could keep it in Fort Knox ‘til it came out, it’s not gonna do that. You know? They just have to accept the new reality of doing business and move on. You know? I did so. I downsized and I mean, it’s- I’m not a hypocrite, you know. I realized that, you know, okay, I can scramble to try to like grab all this money, have seventy clients and run myself ragged and just try to spring toward retiring or whatever and whore myself out there and, you know, but I- I just, I couldn’t do it- that’s not my character, you know- it’s more like, okay, well, here are the roughly 20 greatest artists that I think are making music right now. If you can do things economically and sensibly in a way that helps everyone involved and, you know, that I think gets better music into the hands and minds of people, then, you know, you can make a decent living. You know, you can do as well as like, you know, pretty well off like doctor, or lawyer or somebody, but you’re not- you just gotta accept- you’re not gonna be Warren Buffet anymore. Those days are over.