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.