If you talk about the Music Industry, one word you will hear for sure -and a lot- is Crisis. In its most positive connotation, a crisis is a turning point that triggers some radical changes. So with a crisis come opportunities.

That seems to be the gist of the speech Mike Masnick, editor of TechDirt, gave at the at the Leadership Music Digital Summit.

In front of an audience, featuring RIAA top execs and the 4 big labels, Masnick, who is a long time advocate of the “Free Music” theory, talks about the latest and greatest from Trent Reznor, the front man of NineInchNails ,who has been experimenting with disruptive models where record labels and copyright are not needed anymore.

“Connect with your fans – give them reasons to buy” is the motto of the Masnick’s keynote. Connections can be shaped in different forms: you can offer your music for free  and upsell concert tickets and merchandise, or you can ask your fans to finance your new album. Some of your fans – or to say it with Kevin Kelly- your  1,000 true fans -  will end up wanting more than a mere MP3. As the Italian saying goes: appetite comes with eating.

But this presentation- unlike the MidemNet one that focused solely on the Trent Reznor visionary experiments- lists other success stories from around the music industry.

-Fans as investors: In mid-January 2008, Jill Sobule launched a website, jillsnextrecord.com, which sought to raise $75,000 through fan donations in order to produce, manufacture, distribute and promote an upcoming studio album. In exchange for their donations, Sobule offered an assortment of gifts with values commensurate with the donation: from the free download of the album when it’s released ($10) to the opportunity to attend a recording session and sing on the record ($10,000). 53 days after the public launch of the site, Sobule reached her target! The  album is now live and distributed through Sobule’s own label, Pinko Records. Jill who had a hit in 1995, had been dropped by two labels in between and two others went out of business…

-Engage with humor: Josh Freese who has played drums for Reznor’s Nine Inch Nails in the past, released his latest new album with a rather hilarious take on the tiers. As Ian Rogers from TopSpin revealed, Josh’s $250 tier has sold out in less than 48 hours (there were a total of 25 available)!

-Free Music and Cheaper-Smart Ticketing: For Corey Smith Free Music built the base and tours built the revenues. In 2007, he grossed $1.7 million, in 2008 $4.2 million. Users can buy the tracks on iTunes. When Corey experimented with taking the free tracks down from his site, iTunes sales went down! Corey also innovated the approach to concerts by selling $5 tickets!  Tickets are cheaper on the on sale date and users can bring a friend…a potential new fan.

-Tours go to fans, not the opposite: ”Thing a Week” is the name that former programmer Jonathan Coulton gave to a creative experiment. In this project, Coulton undertook to record 52 musical pieces in the course of a year, one each week. All songs were released under the Creative Commons license.  In an interview with This Week in Tech, Coulton stated that he made more money in 2007 than he did in his last year of working as a programmer, 40% of it from digital downloads and 40% from merchandise and performances.  Coulton has been one of the first ones to use services like Eventful to guarantee a large enough crowd at a certain location and showing up for a “strategic” concert in a place where he’s guaranteed to make some money out of it.

-Video concerts, Souvenirs & BitTorrent: Swedish musician Moto Boy went around to various videos sites, found all the videos fans had posted of his concerts, picked the best ones, and put them all together to create a “virtual concert” for fans (both new and old) to enjoy.  Also, while distributing his music for free through BitTorren, Moto Boy created a little mechanical music box that plays one of Moto Boy’s songs. You can place it on any surface and wind it and it plays the song. The music box is a cool souvenir that Moto Boy’s true fans are more than willing to pay for.

So while the crisis is unfolding so are the new opportunities. To quote William Gibson, the future is definitely HERE….and it’s getting distributed!

Leadership Music Digital Summit 2009 – Mike Masnick keynote address, 3/25/09 from Leadership Music Digital Summit on Vimeo.