One of the general rules for successful marketing is to under promise and over deliver, and the guys at Humble Bundle seem to keep doing that. While they've become famous for showing how cool bundles of digital products on a limited-time "pay what you want" basis can be a massive success, they keep doing really interesting things to tweak those experiments to show how you can "under promise and over deliver" in a way that encourages people to (happily) pay more and get more than they expect. From the beginning, they've used the charitable component (you can designate whatever portion of what you pay to go to charity) to get people to pay more -- something studies have shown works well to get people to pay higher amounts. They've also offered special products if you pay above the average price, which encourages people to both buy earlier, when the price may be lower, and to pay more, to get over the average to get the "special" extras. Finally, they consistently add awesome new products later on, while the Bundle is still going -- adding those extras automatically to everyone who already bought (encouraging people to buy early) or making them available to new buyers who pay above the average (again, pushing the amount people want to pay higher).

This round is no exception. After raising over $500,000 for the first round of (great) books, mostly from sci-fi authors, they've now added a pretty awesome "webcomic bundle" to the batch: For everyone who's already ordered, or anyone new who pays over the existing average price, they now also get:

• xkcd: volume 0 by Randall Munroe
• Penny Arcade Volume 1: Attack of the Bacon Robots by Jerry Holkins and Mike Krahulik
• Penny Arcade Volume 2: Epic Legends of the Magic Sword Kings by Jerry Holkins and Mike Krahulik
• Save Yourself, Mammal!: A Saturday Morning Breakfast Cereal Collection by Zach Weiner
• The Most Dangerous Game: A Saturday Morning Breakfast Cereal Collection by Zach Weiner

Of course, these are basically the three biggest names in webcomics, especially among the geekset who is probably already quite into Humble Bundle. It's yet another case of over delivering in a fun and exciting way.

Nearly four years ago, I gave a presentation at the Midem music industry conference, called How Trent Reznor & Nine Inch Nails Represent the Future of the Music Business Model, in which we first discussed the concept of CwF+RtB=$$$ -- or how Connecting with Fans plus giving them a Reason to Buy was the future model. While some are incorrectly suggesting that Reznor's recent decision to work with a major label somehow takes away from that point, I've yet to see any example of how he's no longer connecting with fans or giving them a reason to buy -- or how that's become any less important for musicians (or other creative artists) these days. Either way, I found it interesting to hear that Steven Brown, a student at Glasgow Caledonian University, has taken that presentation and published an academic article about it in the Empirical Musicology Review, entitled Artist autonomy in a digital era: The case of Nine Inch Nails. The paper goes through my presentation and looks at related academic research to see if there's support for the theories I discussed. I don't necessarily agree with everything stated, but it is interesting to try to put it all into the context of academia. Here's a snippet:

That these three factors may be partially responsible for the strong relationship between fan and artist in the case of Nine Inch Nails, is made all the more plausible in light of the findings of another qualitative study, by Saarikallio and Erkkila (2007), who explored the role of music in adolescents’ mood regulation. Seven unique regulatory strategies were identified, including solace, where particular attention is paid to lyrics - often in isolation. The authors noted that participants identified with the lyrics, and felt that the songwriter had faced up to feelings, worries and experiences similar to their own, helping them to connect with the artist. Given Reznor’s often dark lyrics and relatively narrow lyrical palette principally concerning themes of isolation, abandonment, loss and belongingness, it is likely the lyrics of Nine Inch Nails are a fundamental attraction to Reznor’s music. His naked lyrics help form a unique relationship with adolescents in particular, with consequent influence on consumer purchasing behaviours via age-based musical preferences. Furthermore, by engaging with Reznor, fans are ultimately drawn to him on a more personal level where reciprocity is more likely to be carried out. To this end, elusive superstars such as Madonna are perhaps more likely to suffer from piracy where blogging, fanclubs with exclusive interviews etc are likely means for musicians to help create a way of allowing their fans to engage with them on a more personal level, leading to reciprocal behaviour.

Reciprocity forms the basis of Shultz’s (2006) research into jambands; defined as bands whose live sets include much improvisation and variation and who allow their fans to record their live shows, copying and distributing them freely. The phrase is befitting for Grunge veterans Pearl Jam, who have been offering fans soundboard quality recordings of their live shows since 2000. These ‘unofficial bootlegs’ provide fans with documents of their live concert experiences, where as Masnick (2009) stated, live music is the ultimate form of connecting with fans and providing them with a reason to buy. Exploring the success of Tori Amos’ use of ‘official bootlegs’, Farrugia and Gobbato (2010) argue that Amos’ efforts at personalising each show increases the perceived value of each recording to those who were there. Amos and Powers (2005) note for example how throughout the 2005 Beekeeper tour Amos solicited fan requests for cover songs via her website, performing at least two of her fan requests. This level of interaction helps crystallise the importance of the relationship between fan and artist in creating a successful working relationship, adhering to supply and demand traditions, and subsequently increasing the likelihood to purchase hard copies of live music documents.

Such recordings can of course be easily obtained illegally for free and many fans are likely to do so, without affecting ticket sales. Those who do pay for them are the hardcore fans who enjoy bootlegs (Naghavi & Schulze, 2001) and circulation of their live recordings both legally and otherwise form part of the reciprocal relationship between artist and fan. In Shultz’s (2006, p. 657) words ‘the music industry thus needs to think in terms of building loyal communities that have reciprocal relationships with artists rather than simply moving physical products into the hands of consumers’.

Interestingly, the paper (obviously written prior to Reznor's recent announcement) notes that the research suggests different strategies at different times in a band's development -- and wonders what sort of distribution model Reznor would choose for his new projects. No matter what, it's great to discover a number of academic studies related to these topics that I had not yet seen. I'll have to spend some time digging through them.

We recently wrote about a new feature from Songkick, called Detour, that can be used to crowdsource a concert to guarantee for a performer that it's worth going to a show there. Songkick now has another example, which is even more interesting. This one isn't just about pre-proving a profitable demand level for a show, but about engaging with fans, finding new fans and really getting people engaged. It involved the band Hot Chip, who had an open day in their European tour, and was hoping to use it to play a "smaller" town -- one that many tours for similarly popular bands were bypassing. Songkick found 3 towns that the band hadn't headlined before -- and then let the three towns compete. What's interesting is how people in one town -- Folkestone -- went above and beyond to make it happen:

What happened next though was incredibly exciting. A bunch of superfans in Folkestone decided that they were going to make it happen. As one fan said, "Most bands don't come to this part of Kent, they tend to stop at London." They got super proactive and started to email all their friends and even petitioned the local radio station and newspaper. It exploded and went completely viral in a matter of hours through fan to fan word of mouth marketing, Hot Chip sold out. Check out the sales curve of pledges for the show, the huge viral spike is when fans started to self-organise.

Songkick has some interesting data points:

Some interesting things we learned:
- 70% of the people who pledged had never seen Hot Chip before. Detour is really creating new fan to artist connections.
- 66% of the attendees found out about the show through their friends (The rest from Songkick and Hot Chip)
- 1 (amazing) fan emailed over 2000 people they knew to try and spread the word.

In other words, such a platform isn't just about fans getting an act to show up somewhere, but also about getting fans to spread the word, to evangelize and to help build the fanbase much bigger. One thing we've definitely noticed about successful crowdsourcing campaigns is that they tend to create a sense of "ownership," which means that supporters have incentive to get their friends to support things too, which is a different form of "viral" marketing. Songkick notes, also, how far fans will go to support acts they like:

I think the thing that really blew me away was the level of self-organisation amongst fans. In a world where half the music industry is still focused on complaining about file sharing, people often forget that fan is short for fanatic. Hot Chip's fans are incredibly passionate about them and figured out a way to self-organise to make this show happen

Now, there is one caveat that Songkick doesn't mention that could be worth exploring as well. While it is great for those in and around Folkestone, does it upset those in Stoke or in York who are fans, but who didn't "win?" It seems possible, though hopefully they went into this understanding that was a possibility. Either way, we see that doing these kinds of things isn't just about pleasing existing fans, but finding more fans as well.

If you haven't heard, comedian Mike Birbiglia and This American Life's Ira Glass made a movie, called Sleepwalk With Me, based on Birbiglia's act/one man show/book (all of which are hilarious). They did it as a small indie production and have been going crazy coming up with cool ways to connect with fans and get them to support the movie -- such as by doing a ridiculous number of live Q&As, creating cool videos, having a "war" with Joss Whedon, and much much more. Their latest move is particularly cool. The video has now come up on various Video On Demand (VOD) platforms, and they've been encouraging people to hold viewing parties at home tonight... and to make it more fun, they're going to try to Skype or Google Chat into as many of them as possible: I'm curious as to just how many they'll be able to do -- and how long they'll talk to anyone (and how well they'll go), but I'm looking forward to seeing the results. Either way, it's yet another cool way of connecting with fans and giving them a reason to buy (CwF+RtB) that's been enabled by the digital age.

Recently we ran a post discussing Harvard Business Review's decision to go DRM-free and platform independent. The author behind the original post, Joshua Gans, suggested that HBR's ebook policy could open it up to more innovative offerings that rewarded both the publisher and the authors for selling their books through HBR:

I have my own eBook coming out with HBR Press in a very short time. I’d love it to be the case that they decided to offer the book on their site with an explicit ‘sharing’ option. For instance, the normal ‘don’t share’ this book might cost the same as Amazon while the ‘sharing’ option may be somewhat higher but would say allow you to assign ‘ownership’ of the book to another person as well.

Gans' book, "Information Wants to be Shared," is out, and true to his word (and the title), there's a sharing option. It's a good idea, but one that is easier said than done. Fortunately, HBR was up for the challenge:

Now the first, snarky remark somebody makes when you release a book about sharing information is that it is kind of hard to share eBooks...Nonetheless, I believe it was very important to take that challenge head on and, as it turned out, the folks at Harvard Business Review Press were more than agreeable to some experimentation.

The idea was that when a reader recommends a book to someone else they are performing an extremely valuable service to authors/publishers. The problem is that, while with physical books, lending between friends can perform that service, trying the same thing for eBooks makes a mockery of the technology.

Obviously, once you've taken DRM and platform dependence out of the picture, sharing can become too easy, so to speak. And while Barnes & Noble and Amazon have certain books "lending enabled," the "lending" is done in the most literal (pretty much "physical") sense, with the copy vanishing from one device and appearing on the lendee's. Gans was looking for something that split the difference between "sharing" and "recommending" which would make it easier for those on the receiving end to pick up a "no strings attached" copy of their own. Selling through HBR made the sharing part easier, but setting a price was a bit trickier, leading to this compromise:

So here is the experiment they are running. If you buy my book (the price is $4.99) from HBR directly (which is DRM free and multi-format so it can be read on any device) or if you buy it from Amazon, Apple, B&N etc, you can flip to the last page of the book. You will see there a coupon. If you send that coupon to a friend, they can download the book from HBR (and HBR only) for just $0.99 (in its multi-format DRM free form).

The lowered price should make the "second-hand" purchase a no-brainer, especially if the coupon is sent their way by someone whose opinion they respect. The advantage for Gans (and HBR) lies in the potential addition to readership and the data collected during the experiment. But even if it turns into a publisher's worst nightmare, there's still plenty to like about it.

Will this work? It is hard to know. HBR will keep stats on this and hopefully I can share them in the future. Are there risks? Absolutely. All my readers could form a collective and potentially buy one copy for $4.99 and then a million for $0.99. A disaster! Actually, no that sounds pretty darn good to me. (I won’t speak for my publisher).

As Gans notes, he'll be tracking the results with interest, and hopefully HBR will let him share the data. As the ebook field continues to grow, any information on pricing experiments will be very useful for up-and-coming writers. 

As digital media has erased scarcity from the normal artist-to-fan equation, artists who understand this fact are coming up with new ways to package the "infinite," bringing scarcity back into the equation and opening new levels of connection with their fans.

Kid Koala's latest album, "12 Bit Blues," is both selling scarcity (in the form of limited editions) and giving the fans a way to connect with the music on a slower, more personal level. Limited editions, both on CD and vinyl (the 2 x LP version is already sold out), come packed with a DIY project that allows the purchaser to construct a miniature cardboard turntable that plays an included flexidisc with three bonus tracks. (H/T to Nate Hoffelder for sending this my way.)

Every "play" of this disc is certain to be a unique experience as it must be rotated by hand. The "slow music" experience is indicative of Kid Koala's production efforts. Rather than generate the entirety through software, he built "12 Bit Blues" from the ground up, for a more "raw" and "immediate" album.

Eric [Kid Koala] began working out what he could do with it – a kind of reverse engineering back to his childhood self. A little mucking around and it came to him – the blues was always about stripping music back to its bare essentials, which is exactly what the SP1200 does, too. Over three days he cut up and reassembled the bed tracks for 12 Bit Blues. No sequencing software was used. Using the pads on the machine and a multitrack, Eric played each part of the tracks in real time, before finally returning and adding cuts over the top.

Kid Koala's offering does several things exactly right. First, it creates a scarce product that goes beyond an LP pressing. Second, it creates a unique experience for each fan who purchases it. Third, and perhaps most importantly, the concept and execution of Koala's vision for "12 Bit Blues," with its hand-built, hand-operated turntable, is bound to generate a ton of "word of mouth" advertising. This advertising almost always creates new fans, as the connection relies on genuine enthusiasm traveling from person-to-person. 

As home theater systems advance in quality, many people are wondering why anyone would bother heading to the theater at all. Theater owners are aware of this issue and many have been improving the quality of the "theater experience" by offering larger, comfier seats and moving beyond snack bar staples into craft beers and brick oven pizzas.

There's still the undeniable draw of being the "first" to see a new film, showing up at a midnight showing or on opening day. There's also somewhat of a communal experience that can't be easily duplicated at home, unless your living room has seating for a couple hundred friends.

Rian Johnson, the director of the recently released "Looper," is offering a rather unusual incentive for repeat theatrical viewing: a downloadable commentary track to enjoy along with the 2nd-X viewing(s) of his latest film.

I recorded a commentary track to be downloaded, put on an ipod and listened to in the theater as you’re watching Looper. This is an odd thing I tried with Bloom, and have gotten a few requests for it again, so here it is. It is totally different from the commentary track that will be on the Blu/DVD, a bit more technical and detailed. Needless to say, this is NOT to be listened to on a first viewing, or before you’ve seen the film. Also, please work it so that a glowing screening is never out of your pocket during the movie.

This is a great way to connect with fans and get them to shell out for first run tickets multiple times. Johnson is a cinema fanatic who's managed to turn his love of the silver screen into a career making movies that appeal to other movie buffs. This move makes perfect sense. After a viewing or two of "Looper," any true cinema freak would love to run through another viewing while having every aspect of the film broken down by someone as deeply in love with the art form as he or she is.

Plus, as Johnson mentioned, this isn't simply version 0.9 of the DVD commentary, but a more technical and detailed breakdown of the film. "Totally different." He's obviously got more knowledge, information and energy than he knows what to do with, considering he's done this before. This offering will put the director and fan together for a film-length geekout. This connection puts them back into the theater (selling scarcity) and primes them for the eventual DVD/Blu-ray release (another scarcity). Throwing thoughtful freebies to your fans tends to make them happier to open their wallets later.

[Quick postscript: It should be noted that Johnson's "in-theater" commentary track isn't without precedent. As Mike pointed out to me while I was putting this post together, film buff/maverick/motormouth Kevin Smith attempted to do this back in 2006, during the theatrical run of "Clerks 2." Unfortunately, theater owners felt this would be a bad thing and threatened to pull the film if the promotion continued:

Turns out that exhibitors (folks that own the theaters) weren't too keen on the idea of people showing up to the movies with iPods. They felt it was going to be too distracting (or something) for other people in the theater who weren't wearing iPods for the show - like the commentary-listeners would be laughing when nobody else was laughing, and that'd create some kind of problem. Based on that, they suggested that if Weinstein Co. went through with the commentary track promotion, they'd start pulling the flick from screens. So the commentary track promotion has been tabled until we're at a very low theater count.

No rumbling from theater owners on Johnson's actions has been detected yet, but one wonders why exhibitors would be so willing to sacrifice repeat viewings in order to protect single viewings from possible offense. If this had been promoted rather than buried, who knows how many films would have experienced a boost in box office sales thanks to a multi-viewing incentive.]

For all the talk of new music platforms not paying artists enough, we keep hearing counter stories. The latest is that Pandora has revealed that two artists -- Drake and Lil' Wayne -- will make somewhere close to $3 million in royalty payments from Pandora this year. Lots of other artists make many thousands of dollars as well:

Have you heard of Donnie McClurkin, French Montana or Grupo Bryndis? If you haven't you're not alone. They are artists whose sales ranks on Amazon are 4,752, 17,000 and 183,187, respectively. These are all working artists who live well outside the mainstream - no steady rotation on broadcast radio, no high profile opening slots on major tours, no front page placement in online retail. What they also have in common is a steady income from Pandora. In the next twelve months Pandora is on track to pay performance fees of $100,228, $138,567 and $114,192, respectively, for the music we play to their large and fast-growing audiences on Pandora.

And that's just the tip of the iceberg. For over two thousand artists Pandora will pay over $10,000 dollars each over the next 12 months (including one of my favorites, the late jazz pianist Oscar Peterson), and for more than 800 we'll pay over $50,000, more than the income of the average American household. For top earners like Coldplay, Adele, Wiz Khalifa, Jason Aldean and others Pandora is already paying over $1 million each. Drake and Lill Wayne are fast approaching a $3 million annual rate each.

Of course, while all of this is happening, Pandora is not yet profitable, and may never be profitable -- as it is required, under current webcasting rates, to pay about 50% of its revenue out as royalties (while terrestrial radio and satellite radio get to pay much, much less). As Tim Westergren has pointed out, because of the crazy rates, plenty of other webcasting operations have just left the business entirely -- meaning that there just aren't that many players in this space, because it just isn't profitable for the companies, even as they're developing important new revenue streams for artists.

I'll have more on this later, but it often seems that legacy players really have no concept of "the golden goose." They assume that any tech company, who is moderately successful in getting users, simply should be bled dry, paying out just about everything to artists, with nothing left for the companies themselves. They think that the music is the entire value, and the service provided is not very important. And yet, without that service, none of that money would come in at all. At some point, the legacy guys are going to have to realize that they're better off having a healthy ecosystem of services, rather than squeezing the absolute highest rates out of these companies, in a way where they can't survive.

The Humble Bundle folks continue to do cool new things based on their basic (awesome) business model of bundling up a bunch of cool indie content in a simple, user-friendly, pay what you want system (with a charitable component). They've gone through six video game bundles (it's hard to keep up!), and over the summer they did their first music package, with a bunch of cool albums from the likes of Jonathan Coulton, OK Go, They Might Be Giants and MC Frontalot. And... today they announced their very first ebook offering. Same basic deal: bundle of books, pay what you want. The basic package includes:

• Pirate Cinema by Cory Doctorow, an intense story of youthful techno-defiance
• Pump Six and Other Stories by Paolo Bacigalupi, a hard-hitting collection of 11 impactful stories
• Zoo City by Lauren Beukes, an alternate Earth mystical science fiction tale
• Invasion: The Secret World Chronicle by Mercedes Lackey, Steve Libby, Dennis Lee, and Cody Martin, a modern military superhero saga packed with bonus content
• Stranger Things Happen by Kelly Link, a delightful fantasy collection of 11 stories
• Magic for Beginners by Kelly Link, the cross-genre follow-up to Stranger Things Happen

As always with Humble Bundle, if you pay more than the ongoing average price paid by others, you also get some bonus content. In this case, it's

• Old Man's War by John Scalzi, a science fiction war epic
• Signal to Noise by Neil Gaiman and Dave McKean, an ethereal graphic novel of a man’s last days

That's apparently the first time the Gaiman/McKean book is available in ebook form... There's also the charitable component. In most bundles, you can designate some of the money to go to EFF or Child's Play Charity -- and that's still true, but this time they've also added the Science Fiction and Fantasy Writers of America. It will be interesting to see how this goes. The music bundle did well, by any reasonable standard, but definitely didn't pop the way the video game ones did. It will be worth watching to see how this one goes as well, and if there are other ways that the Humble Bundle crew will continue to innovate.

It's always neat to see whatever creative ideas people come up with to make their various crowdfunding projects more interesting. Writer Alex Wilson recently alerted us to his own Kickstarter campaign for printing The Time of Reflection, a short comic he wrote, which recently won "the Eagle Award" at the London Comic-Con, as part of a challenge sponsored by Universal Pictures (as part of a promotional campaign for Snow White and the Huntsman). I'm a bit surprised that Universal didn't require them to then hand over any copyright on the comic (you see that happens sometimes with these kinds of contests), but it looks like Alex and Silvio (who did the drawings) are free to do what they want with the comic. So they're doing this Kickstarter campaign to do printed copies of the comic. That, alone, probably wouldn't be that interesting, but Wilson added an interesting little twist. There have been plenty of concerns about what's happening to independent comic book shops in the digital era, so Wilson is looking to use Kickstarter as a way to also "give back" to some of those shops. For anyone who pledges over $3, not only do they get a copy of the booklet, but they also get to designate a local, independent comic book shop and Wilson will send a copy to that shop as well (at no cost to the shop), at which point the shop can turn around and sell it, give it away for free, burn it, whatever (and yes, he's checking with each shop before sending it to make sure they'll take it...). Who knows how well that aspect will work, but it's a neat idea to increase awareness and distribution on multiple levels. First, it's really a way for backers to effectively buy an extra copy for the stores in question. Second, by getting the book into cool indie comic book shops, Wilson clearly is hoping to get more awareness of the book as well. The campaign is already well over its initial (modest) goal of raising $450, and it will be interesting to see how well the retail tie-in goes. Hopefully Wilson will stop by again and update us on how various retailers responded to the whole thing, and if anything interesting comes out of it.