Right, NIN and Radiohead aren't giving away music to be altruistic, they're doing it because they believe it will "hook" more listeners into paying for the stuff (concerts and t-shirts and for-pay CDs and downloads) that they do decide to charge for.
Having thought about this debate a bit more since my last post I realized, I don't hold anything against individual artists who decide to give their music away. Nobody should be able to tell any artist they can't give away their work if that's what they want to do, if that's how they value the work in question, or if that seems to them the most satisfying outcome. I can certainly understand an artist saying, "I'd rather have hundreds of people hear my work for free, than only have a very small number of people give me a very small amount of money to hear it."
What I'm sort of "complaining" about, or more accurately cautioning about, is not the individual artist's choice but the macro social trend of large numbers of artists (and even some small labels) doing this, and the cumulative effect that it has. I really do believe there are quite a few people who still listen to and enjoy music just like they did ten years ago, but who have virtually stopped paying for any of it, between authorized and unauthorized free downloads. That's what I think is a shame, and I think the effect will be an ever-greater number of artists giving up who might otherwise have continued if there had been some sort of compensation for their work, even a small amount of money coming in that never comes close to "making a living."
Having talked to many, many independent recording artists, I've found that all of them have slightly different hopes for their work, different levels of expectation with regard to how it will be received. So if you line up all the many artists on a spectrum from "most commercially-focused and money-minded, not willing to do this unless there's decent, consistent money coming in" on one end, to "doesn't give a crap, totally happy to give the work away for free as long as people are listening," obviously most people would fall somewhere in between.
Well, what happens is that each artist has their position on that scale in terms of expectations, and each artist also has their own level of income from music, mostly CD sales and authorized downloads. The artists who have the highest expectations in terms of "I want money, that's what I want" are not necessarily the ones with the highest actual sales and income, and if they're not, they simply give up and stop making music.
In a thriving music scene, like the ambient scene was in the early to mid 90s, it was fairly easy for independent artists who were doing cool music, once they passed the threshold of recording a few albums and finding a label, to sell enough CDs that the amount of money was acceptable to them. I mean, maybe it's a couple thousand dollars a year that they'll use to buy a synthesize, maybe it's a little more and they'll get a cool ADAT deck and some microphones and a doumbek and a nice Lexicon reverb. There were even guys making a living from ambient music back then, maybe not getting wealthy as was asserted earlier, but at least able to sort of feel like a "professional musician."
As our world has changed this past 15 years or so, all kinds of things have changed. Record stores went out of business owing distributors money, distributors went out of business owing labels money, record labels went out of business when they couldn't sell CDs like they used to, many artists gave up when they couldn't sell CDs like they used to. Guys like Robert Rich and Steve Roach used to be able to make a living from royalties from Hearts of Space, but now there isn't any big ambient label selling 5,000 or 10,000 or 20,000 copies of each new release, so those guys need to become more "DIY" in their approach, self-release most of their music so they get not only the artist's share but also the label's share (and furthermore, getting the record store's share by selling mostly through their own online stores). I suspect those guys now make almost nothing from the conventional model (receiving royalties from a label) and almost everything from direct sales of a relatively small number of CDs, and from authorized download sales (something that didn't even exist 10 years ago).
But as has been stated in discussions of this type before, not everybody is NIN and Radiohead, and not every ambient artist is Steve Roach or Robert Rich. What about the next tier of artists, the ones who were never selling 10,000 copies of an album via Hearts of Space and thus getting that higher level of name recognition? Gradually the potential CD sales and other income from music for most artists, not the rank beginners but not the very top tier like Roach/Rich, is shrinking. Not only are there more artists splitting up the pie (there are many, many more artists releasing ambient music for sale now than 15 years ago), but the pie is shrinking because there is so much more free music, both authorized and unauthorized. Sure, many individuals still buy music despite finding a lot of music for free, but many don't, and those that do still buy, on average purchase less than they did before.
So if you have less money coming in from sales of music (CDs and downloads) in the genre as a whole, and you have the money split up between a large number of individuals, then you have almost everyone individually making less money than people were making earlier. If you remember back to my "spectrum" of artists' expectations, you'll see why more and more of the artists with higher expectations in terms of how much money would justify them making music, will find their expectations unmet. Usually, if someone feels like they need a certain reward in order to do something, and they don't get that reward, then they continue for a little while until they realize "this is really how it is," and then they quit. What I see happening is that the people who are on the "higher" expectation end of the spectrum will increasingly drop off, except the more successful and resourceful ones, and more and more we'll be left with the "doing it for free, just happy to have people listening" end of the spectrum. Yes, there are talented and interesting people among those toiling at that end of the spectrum, but is that going to end up being a thriving and vital music scene... just Robert Rich and Steve Roach, and a few resourceful lucky ones, and a bunch of people who don't expect to ever see a penny for their work?
I would argue that a lot of great artists will be lost to our music scene, under that scenario, and it will be some of the more serious and ambitious and expert artists, who just didn't see the point any more after releasing CD after CD and digging a deeper financial hole. It's this I'm cautioning against, when people say "what's the harm in illegal downloads?" and "there will always be music for us to listen to."