It's been clear for a while that Lady Gaga understood the power of free music, using it in a variety of promotions, saying she didn't care if people downloaded her music, because it only got more people to go see her live and emphatically saying she thinks albums cost way too much. She thought that $0.99 was a better price for an entire album, rather than per song.

Now, as Robw was the first of a few of you to point out, her manager has said that, if it were up to him, he'd give her next album away totally free -- with the focus on getting it as much exposure as possible, knowing full well that he'd make that up through greater fan support elsewhere.

"If it was up to me, I'd give away the next album and put it on every handset that I can put it on, to get that scale," he said. "You can't be scared to fail. Sometimes we're going to get big results, and sometimes you learn a lesson, make an adjustment and move on."

Of course, some will immediately point out that since it's not up to him, such comments are meaningless. He can say that and "pander" to fans, even if he doesn't really believe it. But, of course, there's no reason to believe he doesn't mean it. And in an era when so many top musicians are being pressured to toe the industry line about how evil "free" is, it's certainly nice to see one of the biggest (if not the biggest) pop stars in the world, and her management, recognizing publicly that the business model these days isn't in selling music directly.

In a somewhat surprising case, the Second Circuit appeals court has ruled that infringing on a full album only counts as a single infringement for the sake of statutory damages, rather than counting each song separately. In an era when juries are awarding the record labels $1.92 million for an album's worth of songs being infringed (and industry apologists claim this is totally reasonable), it's nice to see a court recognize how ridiculous this is. As Eric Goldman notes in the link above, this is a situation where a company "snatched defeat from the jaws of victory." It won the lawsuit, and while the court suggested it settle, it kept demanding an award of over $1 million $6 million, by claiming each song was a separate infringement and that each infringement deserved the statutory max of $150,000 per infringement (despite the fact that the amount of actual infringement involved was minimal -- totally $331 accidentally not paid to the client).

That's what happens when you use statutory damages for copyright infringement being totally out of line with common sense. Copyright holders start dreaming of a legal windfall. Thankfully, the court said no way, noting that each album (there were two) only were eligible for a single statutory damage claim, and that the infringement was "innocent infringement," lowering the awards even more. The total amount awarded: $2,400 -- or significantly less than the copyright holder most likely spent on legal fees. The court seemed to recognize the blatant greed in the copyright holder:

Appellees also were reasonable in trying to resolve the case short of trial: Appellees made an Offer of Judgment in the amount of $3000, which Appellants rejected, in favor of continuing to demand over $1 million in damages, notwithstanding the evidence that Appellees had received less than $600 in revenues from infringing sales.

Of course, the news might not be all bad for the record labels. Eriq Gardner is suggesting that some labels may read the decision in a way that will help them prevent artists from terminating their copyright assignments and taking back control over their works. Many musicians have been preparing to take back their copyrights through the somewhat complex system of copyright termination, which lets original copyright holders reclaim works they assigned to others after a certain period of time. The labels have been fighting this for years, famously having a Congressional staffer sneak four words into an unrelated bill late at night, to make all music ineligible for such termination rights, by calling it a "work for hire." That Congressional staffer was then hired for a cushy job at the RIAA a few months later. However, the outrage from musicians finally got Congress to rescind that change.

But it hasn't stopped the industry from looking for ways to prevent termination rights -- including trying to claim that a remastered version of a song should get a new copyright, separate from the old one. And, don't be surprised if they try to use this ruling in their favor as well. As Gardner notes, even though this ruling was over a totally different issue (damages for infringement), the current definition of a "work for hire" includes "compilations," and the judge's ruling in this case points that an album is a single infringement because it's considered a compilation. And, so, the argument goes, the record labels may have just been given a judge to quote on why albums are compilations... and thus works made for hire... and thus not eligible for termination rights. Fun stuff.

The common wisdom you hear these days is that the concept of the "album" is dying thanks mainly to the ability to obtain single songs (whether through legal means or not). However, some are beginning to challenge that thinking. Bandcamp, a fantastic service for musicians we've discussed before notes that their sales data bucks the trend: full albums outsell single song downloads on the site. There are a few reasons why:

• Most Bandcamp artists are indie and attract fans more interested in complete works than the average Hannah Montana/Lady Gaga flavor of the moment consumer
• You can listen before you buy via Bandcamp. Not just 30 second samples, but rather the whole album.
• iTunes and others price most CD's at $10. Bandcamp artists have found that name your own price with a $5 minimum is a real sweet spot.
• iTunes and others encourage single track purchases with page layouts, buy buttons and featured tracks

This is definitely interesting. I know that I'm in the camp of folks who never buy single tracks, but always look to buy the full albums of bands I like, so that makes sense. But the really interesting point is the third bullet: if albums were priced closer to $5, people would likely be a lot more interested in buying. Again, this shouldn't be a surprise. When the old Allofmp3.com let people buy albums for sums between $2 and $5, it seemed to be quite popular -- even compared to the ability to just download albums. It certainly adds a lot of credence to the idea that one of the big problems the recording industry faced was really the super high prices of CDs.