A New Model for Success
Thursday March 06th 2008, 12:17 pm
Filed under: Fan relations,Music sales

The mainstream media is abuzz with the news of Nine Inch Nails’ latest experiment in building a new business model for musicians. Following on the heels of Radiohead’s efforts last year, this represents an exciting and invigorating new direction for the industry — and, most interestingly, one bypasses major labels and their traditional distribution channels.

The industry has been trying to argue for some time now that music sharing “steals money from artists.” They’ve used scare tactics to try to convince musicians that music sharing will leave them all penniless on the street, with hand-lettered cardboard placards reading “will compose for food” propped up against their tattered guitar cases.

Now, in my opinion, those arguments are pure hokum. And these latest moves by Trent and Radiohead simply confirm what I’m thinking. Music sharing and the big bad Internet thingie may have an adverse effect on the income of record company executives, but it seems to me all the changes of the past few years are actually terrifically empowering for musicians.

Now that music can be easily copied and distributed electronically, the old business model is unworkable. And it’s too late to go back. The genie is out of the bottle. Instead of trying to shove the old rules into the new model, it’s time for people to start thinking of some new rules. Which is exactly what Trent and Radiohead have done.

That’s probably why the whole thing has “the industry” in such an uproar.

Seems to me the Grateful Dead did okay while allowing (or more accurately, actively encouraging!) their fans to make and share bootleg recordings on a massive scale. So I’m pretty sure music sharing is not the problem, at least not in terms of depriving musicians of the ability to make a living.

The real problem — as I see it — is a fundamental flaw in the system the way it’s been set up, with virtually all the cards in the hands of the labels and virtually none in the hands of the artists or the fans.

And I think another big part of the problem is, the labels have for years convinced everyone the music is the product. In my opinion, it isn’t. If that were the case, there would be no real reason to attend live concerts — it’s a lot easier, it’s a lot cheaper, and you get better fidelity and production by listening to a studio recording.

No, I think the product is the artist, and the experience of interacting with other fans. That’s why people endure standing in line for hours in the hot sun or freezing cold to score tickets to hot shows. That’s why they’ll sleep out on the sidewalk to be first in line for a “general admission” show so they can get the best seats. That’s why Deadheads would spend all their disposable income attending concerts around the country even though they already knew every song by heart and probably had several hundred (thousand?) bootleg concert recordings already. That’s why one of the first things fans do when they get their new car is put stickers advertising their favorite band on the back, why they join fan mailing lists and clubs, and why they use their favorite band’s logo as their forum avatar.

The way I see it, basic music tracks are becoming like ebooks or whitepapers in the corporate marketing world — marketing tools you use as teasers. Put them out there free or at very low cost, with a goal — not to make money directly from selling the ebook or the whitepaper (or the music track) — but to use the teaser to capture people’s interest, so they come back to you for “the good stuff.”

And by “the good stuff” I mean tickets to your concerts, tour T-shirts, programs and schwag, limited-edition colored-vinyl albums, paid fan club membership, holographic posters autographed by the band, access to special invitation-only live chats with the artist to discuss the making of the album, etc.

In other words, the kinds of things fans will pay good money for that are pretty hard to duplicate and “share” online (or offline, for that matter).

The really cool part is many of these “premium products” are well within the reach of the average artist to offer their fans. No major label backing required. Screws the labels’ business model a bit, but they’ve been screwing the artists and the fans for decades.

Karma’s a bitch sometimes.

Article copyright © by Diane M. Aull. All Rights Reserved.

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