Nine Inch Nails: distribution by pirate
The music world is abuzz with chatter about the latest Nine Inch Nails LP being released (in part – Volume 1 of 4) on a Creative Commons license! Reznor and co. put it on filesharing sites and are encouraging people to email it to friends, post it on blogs, spread it around far and wide, in the hope that it inspires people to buy the full album.
As an aside, I reckon few people are realising the significance and importance of the inclusion of a multi-page PDF with the nine DRM-free tracks.
I was interested in what sort of response NIN would get out of music pirates that the music industry hates so much. I had a look at the forums attached to the album’s download page on an unspecified music filesharing community. This is the download page for the full 4 volumes, so these people are explicitly going against Reznor’s wishes and downloading/sharing all of his new work, illegally. Admittedly, there’s a vast amount of bias to people’s motivations to append messages to these filesharing pages (and just 43 comments for 1,300 downloads), so this isn’t a scientific approach by any means – but the response is very, very interesting – here are some snippets illustrating reoccurring themes to people’s messages:
What can we conclude?
1. People are downloading illegally even though they bought the CD legally – the official site just couldn’t take it. Could NIN build a ‘walled garden’ bittorrent network for new sampler content, or even to release new albums into (and you pay a membership fee for access to the walled garden)? The RIAA lawsuits drove many filesharers underground so they’re well used to acting within walled gardens (unlike most other forms of information sharing on the Web). It’s a decent idea if only because as a distribution model, it scales better than the site-to-downloader model which cost them lost sales yesterday. But there’s more interesting benefits to walled gardens. Think about it.
2. The leading sentence in (1) begs the questions no music label ever asks – who ARE music downloaders? Despite their vast music piracy, what’s the company’s actual ARPU from them? Maybe they wouldn’t be so quick to slap these people with lawsuits – it may turn out that many filesharers are also above-average customers, finding more records that they love than the ‘classical’ consumer does (limited to music discovery by radio and MTV, versus the limitless trial and error offered by piracy) and that they then buy. This needs to be studied, NOW. Too long has the music industry held the very wrong view that an album downloaded is a lost sale. It’s not a 1:1 relationship, and it never will be. It’s new consumer behaviour, and it needs to be studied NOW – before the biz loses all its resources with which it can build new music empires in the Internet age.
3. People are buying $300 versions (and talking about it – influencing others). A music label’s wet dream since convincing people to buy this has been a matter of totally free marketing. What a huge profit margin on those sales. But is that sustainable or reproducible? Doubt it. By and large the music marketplace is shifting to a new equilibrium where the perceived value of a file with music in it (mp3) is close to, or equal to, zero. For big, established bands (established thanks to their previous music labels, one might point out!) this may be feasible but have the costs of doing music really fallen to a point where a new band can live on zero-market-value-music for long enough to become big and established, and to starting pimping $300 records at people? Could an established band even do this from now on, when the act has little innovation (novelty) value? Nah.
4. Carrying on from point (3) – there’s a very strong argument that NIN and Radiohead (and Prince) are not quite the ‘fearless innovators’ they’re portrayed to be as a result of this novelty. Releasing albums for free has been done by many small bands for a long time – I’ve seen new albums posted up by artists onto pirate sites at least once every 3 weeks for the past half a year, and I have yet to be convinced that this has been successful for them. NIN, Radiohead and Prince are three of the biggest bands/artists on the PLANET. They’ve already got the swimming pool (thus the freedom to experiment, free from the constraints of money and of a powerful music label). They also have the fanbases to make these experiments look like successes, whether they were or they weren’t, and they have the newsworthyness and fame needed to get their experiment into the press, i.e. into the mass market. NIN, Radiohead and Prince are great, innovative businessmen, but their way of doing things is not a model for the salvation of the music industry (for new and upcoming bands, at least). The only people they’re showing the way to, are their fellow superstars, forged in the age of the CD – they’re showing them how to monetise huge, well established, durable, mature fanbases. The age of the CD has passed, and these big, bold moves by RH, NIN and Prince tell us nothing about how to build an industry that supports not-yet-established bands – the “long tail” and wannabe superstars.
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