Producer Atticus Ross and Nine Inch Nails’ front man, Trent Reznor, in the studio producing their groundbreaking album, Ghosts I-IV, which the band is selling online directly to fans.
IT’S NO SECRET that digital distribution has the music industry so scared that it’s shooting itself in the foot as much as it’s shooting its own customers — not too smart to treat your customers like criminals.
But what is the business model that will rise from the ashes of the old music business? That question’s been a bit trickier to answer. So far, it appears to be some variation of the iTunes Music Store — online, single-song sales, some album sales and little to no digital rights management — all intended to make a person’s music transportable to all his or her music-playing devices.
Each of these qualities, by the way, at some point in the past decade, has been denounced by the recording industry. While industry executives decried digital music as unfair to artists, the truth is that they feared for their own jobs. As it turns out, artists can control more of their own destiny by selling directly to fans, and digital distribution finally makes this economically feasible. And that threatens the industry’s decades-long exploitation of recording artists — especially black musicians — more than anything ever has.
One of the reviewers of the book I linked to above, music journalist Simon Garfield’s “Money for Nothing: Greed and Exploitation in the Music Industry,” described the music industry’s wrong-headed business model very well:
Nations rise and fall, trends come and go. One thing remains constant in this ever-changing flow: the exploitation of musicians by the recording industry…
The recording industry has put much thought, effort and money into maintaining absolute control over the music that reaches your ears, via radio or CD. … [This book] gives insight into the mentality that has declared a war on its own constituents in the name of stamping out “music piracy.” [Emphasis mine]
So the threat posed by the Internet, Apple’s iTunes, the iPod and Web-savvy musicians themselves to the music industry isn’t merely to its bottom line but to its very existence, at least in its current, bloated, greedy, control-freak form.
Artists are beginning to understand that the Web offers them the infrastructure to reach out directly to fans, and to make money doing so. As I noted in an earlier posting, American audiences have asserted growing control over their own entertainment behavior since Colonial times.
STICKIN’ IT TO THE MAN Nine Inch Nails’ Ultra-Deluxe Limited Edition Package grossed $750,000 in two days, and none of that money goes to greedy music industry executives.
To not acknowledge this is not good business. To be successful, you have to know what fans want, acknowledge that there are things they are willing to pay for, and then to provide some nice stuff for free and a lot of cool stuff for purchase. Trent Reznor, of the band Nine Inch Nails, was able to gross $750,000 in two days by offering the first 2,500 fans a $300 “Ultra-Deluxe Limited Edition Package,” including downloads, two CDs, a data DVD, a Blu-ray DVD and other extras — four actual vinyl albums, old-skool doodz! — with the whole bundle autographed by Reznor.
That amount, by the way, was in addition to the money Nine Inch Nails earned by offering their new album for sale online first. The implications of a successful effort like this may point the way to the future of online distribution of creative works, not just music. Naturally, this interests me as an online filmmaker.
Techdirt’s culture writer, Mike Masnick, understands that this kind of direct appeal to fans isn’t something that only big-name bands can pull off. New bands who understand the Web and are unencumbered by last-millennium thinking can take advantage of this potential new business model:
Before some people start complaining that this will only work for big name bands, there’s an easy response to that: these days, the way to become a big band is to get your music out there. Newer bands can easily give away music as a promotion to get attention, build up a following, and throw in these types of options as they get bigger. Besides, smaller, less-well-known acts still have plenty of other offerings they can use to make money, even as a smaller band.
Among those naysayers to Masnick’s post was one reader who asserted:
For many bands the way to become big has been to put themselves out there on the Internet. However I don’t see that working … for very long once it becomes a popular thing to do. Right now the idea is novel and the market is virgin. However, once every garage band and their brothers have their own website fans will find themselves confused and irritated at how hard it is to tell the good ones from the bad ones.
I think people can tell how good music is by, um, listening to it. Power can and should pass from the record labels’ marketing machine and from radio’s computer-programmed “popularity” to music lovers’ Web sites and to such services as Last.fm. That’s how music dweeb me learns about new artists in the types of genres I enjoy.
Another interesting bit about NIN’s new album? It’s released under a Creative Commons license. Reznor even uploaded nine of the album’s tracks directly to The Pirate Bay himself. As one commenter put it:
Sure, there will still be piracy, but the cost of piracy will be the cost of the free advertising you get from word of mouth and viral sources.
It’s technically not piracy if you share it. Talk about trusting your fans.
