Techdirt’s Michael Masnick delivers amazing presentation that the music industry’s business model should simply be as NIIN has done – connecting with fans and giving them a reason to buy.
The RIAA has been scratching its head for years on how to compete in the digital world where P2P and file-sharing networks and services have forced them to compete against the onslaught of free downloads. NIN has led the way, constantly reinventing how it reaches fans, all the while turning enviable profits for the hard work and creative talent in the process.
We’ve all watched as NIN managed to make its album “Ghosts I-IV” grow into Amazon.com’s top-selling album of 2008 despite having not only uploaded volume I to BitTorrent tracker site The Pirate Bay, but also having released the entire album under a Creative Commons license allowing fans to remix and do as they please with it.
So what’s the winning formula? Techdirt’s Michael Masnick argues in “Serving Your Fans – The Trent Reznor Case Study,” a presentation given at MidemNet on January 17th in Cannes, France, that it’s simply the following:
Connect With Fans (CwF) + Reason To Buy (RtB) = The Business Model ($$$$)
Trent Reznor has connected with fans (CwF) time and time again, having offered free album downloads, remixes, or even samples of an unreleased album are just a few examples.
Masnick notes that buying an album is a voluntary transaction, and that it’s nonsensical for artists to think to “think that there is some sort of obligation to buy.”
He continues:
And, so they put something out with a price tag, but without doing a very good job convincing fans why they should buy. There was no real reason — and then they seem to lash out at their fans for hurting them. The fault, however, lies with the musician (like any business) who failed to give a proper reason to buy, and falsely assumed that fans had some sort of obligation to buy. If an artist believes there’s an obligation to buy, fans will often educate the artist very quickly.”
One final point on this is the last question that people often raise: why should the musician be involved in any of this? Shouldn’t they just be creating music. There are two answers to this. First, this is exactly where a smart record label, agent or manager can come in and be quite helpful. Let the musician create the music and let the “business guys” focus on applying this business model. Second, however, is that due to the way the industry is these days, the musician does need to be somewhat involved. You cannot connect with fans if you’re in seclusion. If you don’t want to make the effort to connect with fans, then that’s fine: you won’t have that many fans. It’s a choice you make.
Moreover, Masnick rightly points out that the music industry needs to realize that illegal file-sharing is here to stay and that it instead of wasting its focus on a losing battle against it it ought to instead “return to business (RtB)” and learn how to “compete with free (CwF),” an alternative formula to the one given previous.
Compete with Free (CwF) + Return to Business (RtB) = The Business Model ($$$$)
Imagine if the RIAA had done this 10 years ago rather than making lawsuits a central tenet of its business model. We’d have had DRM-free music and iTunes interoperability years ago.
Enjoy the video, it’s definitely worth 15 minutes of your time.
jared@zeropaid.com
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NIN has it right. I’ve always been willing to shell out $$$ for even the 3 and 4 track remix albums because they have always been worth every penny. I respect Reznor as an artist and a person. Anybody that has seen them live knows that Trent fully respects his fans and knows that he would not be where he is without us. He has given in to the most simple of buisness models no fans no $$$. So he keeps his fans very close and very happy. I got The Slip for free paid $70.00 for a concert ticket $100.00 in merchandise at that concert then went and bought the album at Best Buy for $11.00. How can you go wrong with that? I do the same for all the bands who keep it loyal to the fans that made them.