Just a few weeks ago, we wrote about an economist who tried to apply the whole CwF+RtB concept to the porn industry. Apparently, some porn execs have been doing exactly the same thing. Private Media Group is a publicly traded, multi-million dollar porn company, that has been a leader in porn in Europe for many, many years. The company just went through a management shakeup, bringing back an old CEO, Berth Milton (the son of the company's founder). In discussing his initial plans, he said that the internet "turned into the worst thing that's ever happened to the adult business." But, if you read between the lines, he isn't saying that it's the internet that's the problem, but that the internet pulled the rug out from old business models. He immediately followed it up by saying:
But there are also plenty of opportunities. There are ways of making money from non-paying traffic and that's what Private is going to do. I can't reveal anything more about our strategy, but we're going to be more and more free, which will help us recruit paid subscribers.
That was just a few weeks ago... but he's now moving forward with those plans, and is saying that he wants to embrace "pirates," in a new interview with NewTeeVee:
"We will be extremely happy the more people are pirating our content and the more they look at it."
Why? Well, it looks like Milton has come to the same conclusion as many others in terms of content business models: set the infinite goods free, and look for ways to sell the scarce. He realizes that fighting unauthorized access is a losing battle, noting that he just has to "look at my own kids, because that's the best way to know where the market is going. It doesn't matter if I tell them that it is illegal to download. As soon as they close the door to their room, they download." As NewTeeVee explains:
In short, Private wants to go from making money with porn to monetize actual sexual experiences. It recently teamed up with a San Francisco-based swingers club to shoot a movie, and it wants to turn some of the lessons learned into a business, connecting people involved in alternative sexual lifestyles through exclusive websites. This will first be tested in Europe, where Private is already in negotiations with a swingers community site as well as a hotel property, but Private could eventually import it into the U.S. as well.
Milton also expressed optimism that advertisers will eventually start to embrace adult traffic, and said Private would offer adult toys and other additional products for sale. Private will make 95 to 99 percent of its revenue in these areas in five years, he predicted, adding that DVDs will be dead by then.
He makes some key points in the interview that really apply to so many other industries as well. He admits that, in the short term, this is a challenge and that "our easy way of getting revenue will disappear," but in the long term, it's a huge opportunity, because: "there's never been so many people watching adult content." He points out that the focus is on making money from "things you can't copy." Unlike execs in so many other content industries, it seems like Milton really recognizes why this is an opportunity, rather than a threat. It's amazing that so few entertainment industry execs have figured out the same thing.
We recently wrote about the live music market, noting that lots of people seemed to agree that the massive additional fees and surcharges seemed to be a huge problem -- and most of those fees seem to come from Ticketmaster. So it's interesting to see that some are finally looking at ways to get around the old way of handling tickets. Shane Richmond at The Telegraph recently discussed his experience going to see The Pixies in London, where the band used some rather straightforward and simple tools to make the concert-going experience a hell of a lot more enjoyable:
As soon as I got the email I went to the Pixies' website and bought tickets. The tickets -- not a receipt but the tickets themselves -- were emailed minutes later in PDF form. I printed them off on the day of the gig and they were scanned at the venue by an iPhone-wielding staff member.
Apparently, this was all done via a new Topspin app. In this case, The Pixies had apparently used Topspin to put together an email list -- starting from scratch and got it up to over 100,000 pretty quickly -- and then sent a single email out announcing the show, selling the tickets directly. You can see the iPhone scanning operation below:
At Hypebot (the link above) Rogers noted: "100% of fans acquired via Topspin, all marketing direct-to-fan via Topspin, every ticket sold via Topspin, and every person entering the venue after being checked in by the Topspin iPhone application." While that's nice buzz for Topspin, certainly other tools could be used to do the same thing (or something similar). The really interesting part is the lack of Ticketmaster.
But, perhaps even more interesting is some of the other aspects of how the band then took a few very simple steps to make the concert going experience even more enjoyable. Going back to Richmond's post:
Anyway, a couple of weeks before the show I got an email from the Pixies:
"If you're reading this email, it means we'll see you at TROXY London for two shows in June. We're looking forward to it. What songs do you want us to play? Reply and tell us."
Just before the show they emailed again thanking everyone who sent requests and saying that they had a setlist they thought we would like. Now for all I know, some guy who works for the Pixies might have dealt with all the emails and the band themselves may never have looked at them but it doesn't much matter. The engagement -- even if it was an illusion -- helped to build my excitement about the gig.
A few weeks after the gig, the band emailed again, this time sending me a link to a download of two songs from the gig I went to. So I now have a very nice souvenir of the show too.
Now, I'm sure that some will respond to this with a "so what?" There's no whiz-bangery going on here to make all this happen. This is all pretty straight-forward and simple. And, that's part of the point. None of this needs to really be "new," it just needs to be done well, and that means focusing on the stuff people like, such as making things convenient and making people feel like they belong, and minimizing the stuff people hate, such as excess fees and surcharges and feeling like an afterthought rather than a valued part of the community, and you can really do an amazing job connecting with fans (and, oh yes, giving them a reason to buy).
In talking about various business models for musicians these days, we've never suggested that concerts are the only (or even the best) way to make money. However, they certainly are one way that can work. That doesn't mean they're guaranteed to work, of course. One of our regular critics has been bombarding the submission page with stories of failed concert tours this year, as if that proves that the business models we talk about don't work. Of course, by that logic, if some bands can't sell CDs, it means that selling CDs is a business model that can't work. A single failure -- or even a cluster of failures -- does not disprove that a model can work. But, it might take some effort to actually make it work.
This is why I was fascinated by a recent interview that Kyle Bylin did over at Hypebot with Rich Huxley of the band Hope and Social, with part of it discussing how they try to make sure that every concert they put on is a true experience for the fans who come out:
Well, for Hope and Social, we endeavor to make every show an experience. It's not just about playing the songs -- that's just not enough. We feel like good people are an extension of the band, we want you to feel like you're part of our gang. So, as an extension of this, we like to involve people in our music and in our shows; for example, we'll give each audience member a kazoo and teach them one of the brass hooks to a song. Sometimes we'll invite people up onstage to play a kazoo solo onstage with the band, or to sing with us, that sort of thing.
We've run events where we've invited our fans further into our lives and our work and into our studio, to shows in the very lair that we've made our records in, and recorded our audience playing with us. There's a track on our latest album April called Eurospin which features 70 fans as a wine bottle orchestra. We recorded this song live at an event we called "Come Dine With Us" where we turned our studio into a bistro for the evening and fed, watered and waited on the people who came. Awesome fun and a great band/fan bonding experience to boot.
This highlights a really important point. When we've talked about the various business models that artists can use, we've noted that many of them take creativity and effort -- and that's why some people jump straight to the "well, touring is the business model," because it seems straightforward and easy to understand. But, as Rich is pointing out, you still need to be creative and do cool things on a tour to make sure people really feel connected.
Separately, in the next question, Kyle points to a fascinating article from last year, which we had not seen, that highlights the fact that people value "experiences" more than "possessions." What's funny is the same critic who's been talking about tour failures has bolstered his argument by claiming the exact opposite: saying that the reason concerts won't work as a business model is that people want possessions more than fleeting experiences. Well, turns out the evidence suggests exactly the opposite:
Psychological research suggests that, in the long run, experiences make people happier than possessions.
That's in part because the initial joy of acquiring a new object, such as a new car, fades over time as people become accustomed to seeing it every day, experts said. Experiences, on the other hand, continue to provide happiness through memories long after the event occurred.
The article mentions a study where researchers actually tested this hypothesis and found it to be true. It's definitely nice to see this confirmed in some manner. Anyway, the interview with Rich has some more interesting nuggets as well, so check it out.