We've certainly talked a lot about the various ways that Trent Reznor has been exploring creative new business models that center around connecting with fans and giving them a reason to buy, but he's now using the same concepts to try to help save a life. On Wednesday, he announced a program to get people to donate money to help Eric De La Cruz get a heart transplant, whereby people who donate certain amounts to the cause will get to hang out/meet with Reznor and other band members during his ongoing tour involving both Nine Inch Nails and Jane's Addiction (which, by the way, hits Silicon Valley tonight, for those in the area -- though, they're not accepting any more donations for people going to tonight's show). As with the Ghosts I-IV model, there are different "tiers" of support available. In just two days, he's been able to raise nearly half a million dollars, once again showing the power of having a strong community and trying to do something good with it. It will be fascinating to see if there's more that can be done along these lines in the future as well -- turning some of these business models into helping out those in need.
We've covered plenty of examples of Apple's rather arbitrary decision/approval process for putting apps in the iPhone App Store -- demonstrating a huge opportunity for other phone providers to be more open and less ridiculous. We've also talked plenty about Trent Reznor and how Nine Inch Nails is doing all sorts of unique things to connect with fans -- including a fantastically well thought out iPhone app that got lots of well-deserved attention.
We've reviewed nin: access and determined that we cannot post this version of your iPhone application to the App Store at this time because it contains objectionable content which is in violation of Section 3.3.12 from the iPhone SDK Agreement which states:
"Applications must not contain any obscene, pornographic, offensive or defamatory content or materials of any kind (text, graphics, images, photographs, etc.), or other content or materials that in Apple's reasonable judgement may be found objectionable by iPhone or iPod touch users."
The objectionable content referenced in this email is "The Downward Spiral". Since the app is live on the App store, please make the necessary changes to the application as soon as possible, and resubmit your binary to iTunes Connect. Thank you
Except... it's not at all clear what the actual problem is. As Reznor notes, the album "The Downward Spiral" (one of NIN's most popular albums) is not available on the app itself, though the song "The Downward Spiral" is apparently found somewhere in a podcast that can be streamed from the app. But, as Reznor later points out, the same song can be easily bought on iTunes, so it's difficult to see what possible objection Apple could have.
I'll voice the same issue I had with Wal-Mart years ago, which is a matter of consistency and hypocrisy. Wal-Mart went on a rampage years ago insisting all music they carry be censored of all profanity and "clean" versions be made for them to carry. Bands (including Nirvana) tripped over themselves editing out words, changing album art, etc to meet Wal-Mart's standards of decency - because Wal-Mart sells a lot of records. NIN refused, and you'll notice a pretty empty NIN section at any Wal-Mart. My reasoning was this: I can understand if you want the moral posturing of not having any "indecent" material for sale - but you could literally turn around 180 degrees from where the NIN record would be and purchase the film "Scarface" completely uncensored, or buy a copy of Grand Theft Auto where you can be rewarded for beating up prostitutes. How does that make sense?
You can buy The Downward Fucking Spiral on iTunes, but you can't allow an iPhone app that may have a song with a bad word somewhere in it. Geez, what if someone in the forum in our app says FUCK or CUNT? I suppose that also falls into indecent material. Hey Apple, I just got some SPAM about fucking hot asian teens THROUGH YOUR MAIL PROGRAM. I just saw two guys having explicit anal sex right there in Safari! On my iPhone!
Come on Apple, think your policies through and for fuck's sake get your app approval scenario together.
While my keynote presentation today at the Mesh Conference does mention Trent Reznor, luckily (for me) it's not the same presentation I did at MidemNet... because, if it was, I'd have to do a last minute update on the presentation to take into account the new iPhone app that Reznor is releasing, which basically takes all of the features from the NIN website, and enables it on the iPhone... and then adds in a neat bit of location-based info so fans can find each other, or know where other fans happen to be. And, oh yeah, despite all the fuss about charging for iPhone apps, he's releasing it for free -- realizing that better enabling fans to connect will only help him further monetize other things later. The overall article is a great read as well, digging deeper into Reznor's experiments, business model and thoughts on the process:
"I've said it before and I'll say it again: I don't think music should be free. But the climate is such that it's impossible for me to change that, because the record labels have established a sense of mistrust. So everything we've tried to do has been from the point of view of, 'What would I want if I were a fan? How would I want to be treated?' Now let's work back from that. Let's find a way for that to make sense and monetize it."
He's making the same point we've been making. It's no longer about whether or not music "should" be free. That doesn't matter any more. For most people it is free. So once you accept that, you start looking for ways to do more with it -- and Reznor is doing much more with it than just about anyone else.
As most folks know, Metallica was an early "skeptic" of online music, with drummer Lars Ulrich leading the way -- suing Napster and complaining about iTunes. In many ways the band, and Ulrich specifically, became the face of the big anti-fan, anti-internet rockstar. More recently, the band has tried to change that image, working hard to embrace the internet a bit more, and even shrugging off the fact that the band's new album was leaked online. However, those early actions really hurt the band's reputation, leading many fans to boycott the band and refuse to buy any of its new music.
Still, even as the band (and Ulrich specifically) has been working over time to try to rebuild the band's online credibility, I didn't expect this: Ulrich is apparently excited to pick Trent Reznor's brain about music business models:
"We're doing a bunch of shows with Trent this summer in Europe. I look forward to sitting down and talking to him about what's on his radar."
That's certainly quite a shift, considering that Reznor has pretty fully embraced online distribution, including file sharing and things like BitTorrent. So, now we just have to see if Ulrich actually learns some of those lessons.
Trent Reznor sure has a way of releasing new experiments just before I'm about to give a presentation about him. He did it right before my MidemNet case study about his experiments, and now that I'm getting ready to an updated (and expanded!) version of the presentation at next week's Leadership Music Digital Summit, Reznor has launched a new website called NIN|JA 2009 in support of the new tour Nine Inch Nails is doing with Jane's Addiction (and Street Sweeper). The site has a streaming playlist from all three bands, along with the ability to download an entirely free EP of unreleased tracks (two from each band) in exchange for your email. And, not surprisingly, the page lets you get more info on the tour.
It's not particularly different than the release of The Slip, but shows that he's continued to combine these two factors of connecting with fans (often via free music) and immediately giving them a real reason to buy. Oh yeah -- and he still did it in a fun way for the fans. Last night, on Twitter, he alerted people that the site would be going live today, but then had fun with it this morning -- giving people a 3 minute countdown following by a bit of joking around, first backing it up to 5 minutes, saying someone had kicked the plug out of the wall, then geekily pretending to be a clueless Windows user:
trent_reznor: So... anybody know what it means when your PC's screen goes all blue and wont do anything? Give me a sec here.
trent_reznor: An exception has occured at 0028:C11B3ADC in VxD DiskTSD(03) 000016660. It may be possible to continue normally. ????
trent_reznor: Come on, people - you know me better than that.
And with that, the site launched. Time to go update the presentation...
Embedded here is the 15 minute (trust me, it goes by quickly) presentation I did at MidemNet on January 17th in Cannes, France. If you're reading via RSS or another site like iGoogle, click through to see the full presentation. Sorry it took so long to get the video up. There were a few minor technical difficulties. Anyway, the presentation garnered an interesting reaction and a whole series of fascinating discussions over email, in person and over the phone since I presented it, and while I don't want to repeat what's in the video, I did want to discuss a few points raised by the presentation. The core of the presentation is the following simple "formula" that is the basis for making money in the music business (and, I'd argue, many other businesses) in the digital era:
Connect With Fans (CwF) + Reason To Buy (RtB) = The Business Model ($$$$)
There are many artists -- famous and not so famous -- who have been making use (on purpose, or not) of this formula to create successful strategies for building up a stronger fan base, creating wonderful new works of art, distributing them out to the community and getting paid for it at the same time. What made Reznor so interesting as a case study was the fact that he's done it so many times in so many different ways that he, by himself, represents a great example of how you can approach this simple formula in an infinite variety of creative ways.
One of the issues I've had in discussing recording industry business models is that we always hear excuses for why a, b or c won't work. "Well, that guy can make money selling t-shirts, but this guy's fans aren't t-shirt types." "That guy will sell concert tickets, but this guy doesn't like to perform." "Maybe some fans will pay upfront, but people are so greedy that most will just free-ride." It's all excuses. They all want a simple model that everyone can follow, but the point here is that while the model itself is simple, executing on any business model is difficult.
It's about applying that "simple model" in a variety of different creative ways -- which Reznor has done time and time and time again. Hell, I couldn't even include all of the examples of Reznor's successes in this single presentation, let alone successes by other musicians who have executed differently -- but all of whom connected with fans (CwF) and then gave them a real reason to buy (RtB).
A second point that needs to be discussed is that a true reason to buy (RtB) is a voluntary transaction. Too often we've seen musicians or other content creators think that there is some sort of obligation to buy. And, so they put something out with a price tag, but without doing a very good job convincing fans why they should buy. There was no real reason -- and then they seem to lash out at their fans for hurting them. The fault, however, lies with the musician (like any business) who failed to give a proper reason to buy, and falsely assumed that fans had some sort of obligation to buy. If an artist believes there's an obligation to buy, fans will often educate the artist very quickly.
One final point on this is the last question that people often raise: why should the musician be involved in any of this? Shouldn't they just be creating music. There are two answers to this. First, this is exactly where a smart record label, agent or manager can come in and be quite helpful. Let the musician create the music and let the "business guys" focus on applying this business model. Second, however, is that due to the way the industry is these days, the musician does need to be somewhat involved. You cannot connect with fans if you're in seclusion. If you don't want to make the effort to connect with fans, then that's fine: you won't have that many fans. It's a choice you make.
That said, there are tremendous opportunities allowed by new technologies, new communities and new methods of communicating today. They all enable better ways to connect with fans, and better ways to offer real reasons to buy. Those who look at the past and complain about what's been lost need to turn around and look at the vast open fields of opportunity in front of them. There's a lot more music to be made, a ton of new fans to make very, very happy -- and, yes, through it all, an awful lot of money that can be made as well. You just need to stop worrying about what was lost and recognize all there is to be gained.
Trent Reznor is making it awfully difficult for me to finish the presentation I'm giving about him next week at MidemNet, because he keeps on doing stuff that should be mentioned in that presentation (I may have to ask the MidemNet folks for more time!). The latest is a post on the NIN.com site (which, annoyingly, doesn't have permalinks for his posts -- though others repost it in the forums on the site) saying:
The internet is full of surprises these days.
I was contacted by a mysterious, shadowy group of subversives who SOMEHOW managed to film a substantial amount (over 400 GB!) of raw, unedited HD footage from three separate complete shows of our Lights in the Sky tour. Security must have been lacking at these shows because the quality of the footage is excellent.
If any of you could find a LINK to that footage I'll bet some enterprising fans could assemble something pretty cool.
Oh yeah, you didn't hear this from me.
posted by trent reznor at 12:56pm
It's stuff like this that makes fans love Reznor that much more. While bands like Radiohead tried to get people to pay just to remix their songs, Reznor makes it fun to be a fan. As the link above to the forum notes, the content is now available via BitTorrent, and everyone at NIN headquarters is looking forward to what comes out of it -- though, they point out that with so much high def video, it's really mainly targeted at expert users first, and amateurs are probably better off waiting a bit until other copies are made available in easier to handle formats.
Funny to see this in contrast to how Warner Music and the other record labels are dealing with online videos, where they demand money for every usage, pissing off the very musicians they're supposed to represent. Once again, Reznor is leading the way. I'm just hoping he takes a little time off so that I can get this presentation done and not have it be out of date on the day of the presentation.
As some of you may know, in a week and a half I'm giving a presentation at the music industry MidemNet conference, focusing on how Trent Reznor's various business model experiments highlight the future of the music industry. I'll be putting the final touches on my presentation this week, and it's great to find one additional data point: the top selling MP3 download on Amazon last year was Nine Inch Nails' Ghosts I-IV album, which you probably know Reznor put under a pretty open Creative Commons license (and even gave away a bunch of the tracks himself). In other words, you could go on pretty much any file sharing system out there and legally download the music for personal use... and yet it was still the top selling downloadable album (this is on top of all the money earned by Reznor's other business models associated with this album). Certainly puts a nice little cherry on top of the theme of my presentation.
One of the things to understand when we talk about various business model innovations that companies can use, is the idea that successful implementation of these business models doesn't mean merely copying what someone else did, but continuing to come up with new ideas and new innovations. One of the common retorts to this, often found in our comments, is that if everyone's doing x then it loses all value. But, of course, that shows a fundamental misunderstanding of what we're advocating. The whole point is that everyone doesn't do x, but they keep innovating and doing different things. And, for those who claim that there really are only so many things you can do, I'll point you to the words of economist Paul Romer:
Every generation has perceived the limits to growth that finite resources and undesirable side effects would pose if no new recipes or ideas were discovered. And every generation has underestimated the potential for finding new recipes and ideas. We consistently fail to grasp how many ideas remain to be discovered. The difficulty is the same one we have with compounding: possibilities do not merely add up; they multiply.
Or, even better, I'll just point you to the example of Trent Reznor, who, despite being quite far ahead of the pack on many attempted business models, doesn't seem to want to rest on his laurels. Instead, he just keeps innovating. We've covered many of the business model innovations made by Trent Reznor over the last few years (and I'm actually preparing a presentation on the topic for a music industry conference next year -- which I'll be talking about more in the future). His latest is to embrace the iPhone game Tapulous, which is sort of a rather simplified iPhone version of any "push a button to the beat" music game, a la Guitar Hero or Rock Band today (or Dance Dance Revolution in the past).
Now, the easy (boring) thing to do would have been to just create a Nine Inch Nails version of the game, which is now available. You can now play Tapulous to various songs from NiN's recent albums (whose releases we've discussed previously). However, much more interesting is tying the game even further to the band, such that those who score a certain level of points can submit the score back to Tapulous, and get entered into a contest to win floor tickets to see NiN perform or, for one lucky winner, a Les Paul guitar signed by Trent Reznor.
Despite the fact that many would say that Reznor has done much more innovating than many other musicians these days, the important thing to note is that he keeps on trying new stuff -- and each time gets more attention and wins over more fans with his actions. And the folks who complain that no new business model will work because everyone will be doing it? They're not getting much attention at all.
from the but-it-doesn't-mean-free-doesn't-work dept
There's an odd article over at TorrentFreak, which is usually quite good and reliable. This one starts out with a title announcing that Nine Inch Nails' Donation Model Doesn't Work for Most Artists. That's a questionable assertion from the very start, because Trent Reznor and Nine Inch Nails, for the most part, haven't used a donation model. Instead, Reznor has very much focused on using free as a part of a business model built around giving fans scarcities to buy. Yet, TorrentFreak falsely states that Reznor made $1.6 million using a "donation" model. That's simply untrue. He made $1.6 million by selling scarce goods.
The rest of the article goes on to show that a bunch of unknown artists on some file sharing service that asks for donations didn't make very much money doing so. That should bring out a "well, no duh!" from pretty much anyone. As we've said for years, "give it away and pray" isn't a business model at all, but that fact is hardly a condemnation of using free infinite goods as a part of your business model. The unfortunate opinion out there, often repeated by those who want to trash those of us explaining the economics at play, is that we believe if bands just put their music out for free, they'll make money. Thus any band that doesn't make money that way is an example that the model we believe in doesn't work. This argument completely misses the target.
First of all, there will always be some bands that won't be able to make money -- and that's because they're not very good. No business model will work if you're not that good. So, seeing a particular business model not work for some bands is hardly a condemnation of that business model. Second, if bands want to make money these days they need to do a lot more than just give away their music for free. They need to get out there and cultivate true fans, which means working hard to build up a serious fan base. From there, they can begin to put in place any number of business models to make money, focusing on using the free infinite goods (music) to sell scarcities of some sort (concerts, access to the band, special limited edition goods, the creation of new music, etc.). So, the fact that a bunch of bands that used a poorly thought out business model didn't make money from it isn't surprising. It's the way it should be.
I was a bit surprised at how many people sent in the news that Trent Reznor had sent around a survey to fans who are on the Nine Inch Nails mailing list. After all, what's so surprising about a survey? There was some cool stuff, where Reznor suggested that as an incentive for filling out the survey he'd consider offering some sort of one-time prize such as flying the fan to a gig somewhere in the world, but overall, what's the big deal about a survey? But it appears Bob Lefsetz has put his finger on it. It's a big deal because it's exactly the sort of thing that the traditional labels simply can't do any more, because you can't ask your fans for a favor when you're suing a bunch of them. While the RIAA still seems to think that its battle against file sharers is some sort of epic necessity, Reznor is out actually connecting with fans and giving them a reason to feel happy about sharing information with him (not to mention paying him money as well).
Sounds like Trent's a real person. Like if you bumped into him at the mall, you could have a conversation. The Net has burned down the wall between artists and fans. You have to be accessible and human. You can't talk down to your fans, you must respect them. They'll do ANYTHING for you if you treat them right, if they think you're really listening.
If it's all about money, and the major labels believe this, telling us they want 360 deals and ringtone fees, then an artist like Trent has got the big boys beat. Because his fans won't buy only the single, but the album, the t-shirt, the concert ticket, the coffee table book, just about anything Trent can cook up! And the profit margin? ASTRONOMICAL! Not that Trent's afraid of giving away his music for free. Kind of like Google. Search is free, click on ads if you'd like. You feel GOOD when you click on Google ads. You want to pay the search company BACK!
We've pointed out in the past the fact that every time we point to a less-well-known musician successfully implementing a business model that involves free music, someone (inevitably) says "but that will never work for big name musicians." And, then, when we point to big name musicians successfully implementing such business models, someone (inevitably) says "well, that's fine for a big name musician, who can afford to give away music, but it will never work for less-well-known musicians." In fact, after seeing this happen over and over again, one of our commenters jokingly referred to this phenomenon as Masnick's Law.
However, a post by Jim Stogdill over at O'Reilly Radar, shows both well-known and less-well-known artists supporting free music in different ways. He talks about going to a Nine Inch Nails show, where Trent Reznor encourages his audience to "steal" his music, noting that Reznor has said in the past that if music is free, he'll keep making money touring. Then, afterwards in the parking lot, Stogdill was handed a home-burned CD of music from the band Cube Head, who was giving them out at the show to encourage more people to listen to them. There, in a single snapshot was both large and small artists recognizing they could benefit from free music -- though in slightly different ways.
However, Stogdill seems to imply that touring is the only business model for musicians these days, and I'd argue that's not true at all. In fact, Reznor has shown that there are plenty of other business models that don't rely on touring, but, instead focus on giving people a reason to buy -- by giving them something scarce that can't simply be pirated -- such as exclusive signed copies of box sets. And, again, less well known artists have figured this out as well, with musicians like Jill Sobule who put in place a business model that worked well, without relying on touring for all of the money (yes, touring is a part of the business model, but not all of it). The focus, again, is always on using the infinite nature of the music to attract more fans, and then getting them to buy a scarce good that is made more valuable by the music. That can work for any artist, small, medium or large -- and can allow them to make more profits since they often won't have to rely on quite so many middlemen.
It's getting rather repetitive to show what a good job Trent Reznor is doing in showing how Nine Inch Nails is embracing the new business models available to the music industry, but he's doing such a consistently good job of it, it's so useful as an example. The latest move is that he's now releasing his last album, The Slip, which was offered as a totally free download, as a special limited edition CD/DVD and deluxe vinyl. In other words, like he's done multiple times in the past, he's giving fans a reason to buy the physical media beyond just the music. In this case, it's to get a numbered copy, limited to 250,000 that includes a ton of extras.
Sure, there will be plenty of people who don't want it and are perfectly happy with just the music. And Reznor seems perfectly fine with that. However, other fans will want this unique package for themselves. Given how well Reznor has done with "limited edition" physical media, it seems quite likely that this will also be a huge success for Reznor. And, of course, we're not even touching on all the money he'll make from Nine Inch Nails concert gigs. So why do we have the music industry running around like crazy saying that if music is available for free no one can make any money?
Back when Trent Reznor was still signed to Universal Music, he tested out his own form of a promotional campaign for his latest album: he started hiding USB keys with songs off of the album in the bathroom at his various concerts. Fans would find the USB keys, bring them home and upload the songs -- making it into a huge event, generating much more interest around the album. Now that he's independent and testing out all sorts of interesting business model experiments, he's also doing plenty to connect directly to his biggest fans. Take, for example, this story in the LA Times about Reznor hiding concert tickets around Los Angeles, under rocks and in drainpipes, and then putting up coordinates and clues on the Nine Inch Nails website, sending fans racing across the city to see if they can find the free tickets. While it may be a little silly, it is yet another way for Reznor to build up a really loyal fanbase. He's making being a fan fun. Sure, it's not for everyone, but it's certainly adding value to the "true fans" that support Reznor.
Blaise Alleyne alerts us to a nice profile in the New York Times all about Trent Reznor's path to accepting and embracing new music business models. Reznor is still clearly experimenting, and certainly isn't convinced of anything in particular -- but does seem to recognize that he's heading in the right direction. There's nothing too much in the article that's surprising, but a few key points worth noting:
It sounds like he's about to give away the software he used to distribute his last two albums online. Alleyne wonders if he'll open source it -- which would be nice.
"To release "Ghosts I-IV" and "The Slip" online Mr. Reznor found he needed software to distribute digital files, assemble databases and connect easily with other applications. That too will soon be available free. 'We've spent the money to make it,' Mr. Reznor said. 'Take it.'"
He seems to have changed his mind on whether or not the Saul Williams/Niggy Tardust release was a success. As you may recall, he was originally "disheartened" about it -- though, Williams himself thought that disappointment was more just part of Reznor's "emo" act, or, more likely, just a natural reaction to someone who still remembers the old business model. Williams was thrilled with the results -- and it appears Reznor has come around to that viewpoint as well:
"At the time he called the project a failure, but he has reconsidered. 'The numbers of the people that paid for that record, versus the people that paid for his last record, were greater,' he said. 'He made infinitely more money from that record than he did from his other one. It increased his name value probably tenfold. At the end of the day, counting free downloads, it was probably five or six or seven times higher than the amount sold on his last record. I don't know how you could look at that as a failure.'"
He's definitely still conflicted about the business models. This certainly goes back to what Saul Williams said about Reznor after his initial "disheartened" comment, noting: "I think Trent's disappointment probably stems from being in the music business for over 20 years and remembering a time that was very different, when sales reflected something different, when there was no such thing as downloads.... Trent comes from that world. So I think his disappointed stems from being heavily invested in the past."
That very much appears to be reflected in this statement: "I don't agree that it should be free, but it is free, and you can either accept it or you can put your head in the sand." You can also hear some worry about the idea that music acts to promote something else: "Now I have to sell T-shirts, or I have to choose which whorish association is the least stinky. I don't really want to be on the side of a bus or in a BlackBerry ad hawking some product that sucks just so I can get my record out. I want to maintain some dignity and self-respect in the process, if that's possible these days."
That ambivalence about how he doesn't think it should be free, but since it is, he'll go with it, is understandable, given his background in the industry and his attachment to the old model. It's tough to "forget" the way things were. However, hopefully, over time, as he has more and more success with these new business models, he'll realize that things are often better when the music is free (for him, as well as his fans), and using music to sell something else doesn't mean "selling out" or getting involved in some "whorish association" hawking products he doesn't like. He's already realized this implicitly, as his last two experiments have involved having the music sell scarce goods, such as limited edition CD/DVD/box sets and concert tickets.
Now, in an attempt to make that concert (whose tickets are a scarce good people will pay for) even more valuable, he's giving away free tracks of all of the opening acts on the tour. In other words, he's giving people even more reasons to pay to go to the concert. He's giving away that infinite good (the music) to make those scarce goods (the tickets) more valuable. This fits with the model we were discussing just a few weeks ago, of bands giving free downloads to anyone who buys a concert ticket, to boost the value of that ticket. Thanks to everyone who sent this in.
Trent Reznor continues to show that he has a good understanding of the economics of free content. Two months after releasing a new album online, and quickly selling scarce goods that earned him a pretty penny, he's back offering another new Nine Inch Nails album as a completely free download in a variety of high quality formats. However, it's not just that. He's also planning to then sell (scarce) versions of the product as well, in CD and vinyl format for those who want it. And, given his past experiments, it seems likely that he'll figure out a way to make it worth buying. While Radiohead has basically shown that they just got lucky in picking a random publicity stunt, Trent Reznor has shown that he's actually really interested in the economics and business models that will work in the online world.
from the nope,-no-way-for-musicians-to-make-money-at-all dept
Last week, we noted that Trent Reznor's latest experiment with business models had resulted in selling out the exclusive deluxe edition of his latest Nine Inch Nails offering, grossing $750,000. That, of course, didn't include any of the lower level sales. Reznor has now released the news that in the first week alone, the project has grossed $1.6 million in revenue, despite the fact that the music was widely available for free download (some of that helped along by Reznor himself). How long until someone says that there's no way to make money giving away music again?
Yesterday we wrote about Trent Reznor launching his new Nine Inch Nails album online with a variety of interesting options that people could choose to buy. The top of the list, for $300, was a "Ultra-Deluxe Limited Edition Package" that included all the high quality downloads, two CDs, a data DVD, a Blu-ray high def DVD and assorted extras, all in a nice package signed by Reznor. This was only limited to the first 2,500 people. While some scoffed at the price of this package, it was clearly designed for NIN's biggest fans -- and they ate it up. Mike Linksvayer points out that this option is now sold out, meaning that Reznor grossed $750,000 in just a couple of days on that package alone, not taking into account any of the other packages that many more people likely bought into.
Now, before some people start complaining that this will only work for big name bands, there's an easy response to that: these days, the way to become a big band is to get your music out there. Newer bands can easily give away music as a promotion to get attention, build up a following, and throw in these types of options as they get bigger. Besides, smaller, less-well-known acts still have plenty of other offerings they can use to make money, even as a smaller band.
Trent Reznor has certainly been doing a lot of experimenting lately with business models. His last album, which was still on a major label, involved some unique promotional attempts, which actually upset his record label. He also recognized that since the CD itself was going to compete with online downloads that he needed to make the physical CD worth purchasing by making it cool (in this case, color changing after you played it). Late last year, he also experimented with offering free downloads for an album he produced with Saul Williams. While he admitted he was a bit "disheartened" that not that many people paid for the album, he also noted how much attention the album got and Saul Williams admitted that it was working out great overall.
Now that Reznor is totally off-label, he's pulled a bit of a Radiohead, surprising just about everyone by simply announcing his new Nine Inch Nails album on his website and offering a variety of options in how to get it. Given his disappointment with the Saul Williams experiment, perhaps it's not a surprise that he hasn't totally embraced the free concept. The album itself is 36 songs, nearly two and a half hours of music -- but he's only offering the first nine songs for free. However, he is offering a variety of choices for people who do want to pay -- starting with $5 for a complete download (in a choice of high-quality, DRM-free formats) of all songs plus a 40-page PDF of additional content and a "digital extras pack" with graphics that can be used as wallpaper, icons and anything else.
There are other options as well, reminiscent of other musicians who try to offer reasons why you should spend more. For Reznor, those options include a $10 2-disc CD with 16-page booklet (and all the downloads), a $75 Deluxe Edition which includes the CD, a data DVD with all of the content and a Blu-ray high definition DVD with an accompanying slideshow, and finally, a $300 "Ultra-Deluxe Limited Edition Package" that includes everything in the Deluxe Edition plus a vinyl version of the album, limited edition Giclee prints packaged in a "luxurious package" which will be numbered and signed by Trent (only 2,500 of those are available).
While those options could be improved upon (and only offering up the first nine tracks for free certainly won't stop the rest from being available online), it's yet another example of a musician recognizing that a plan that lets fans pick which option is worth it -- and making sure to provide real value for the different options -- is the wave of the future for business models. I'm also a bit surprised that he didn't follow the lead of several other musicians in tying the packages to other things, such as live events. Still, it's another good example of a musician experimenting with important new business models. Update: Two additional points that are worth mentioning. The album has been released under a Creative Commons license and Trent has seeded many bittorrent sites himself with the first nine songs.
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