New Comm Biz

I saw the other day that Radiohead is now selling their album on iTunes, after ’selling’ it from their own site for what ever price the fan wanted to pay, even $0.00. I don’t know if we’ll ever know how much they will have made on this new album, but I have to believe it will rival any of their other albums’ success.

Trent Reznor, of Nine Inch Nails fame posted the results of an experiment he did with an album he produced. Below is a quote from Trent’s blog followed by commentary from Chris Anderson and Marshal Kirkpatrick.

It’s a strange time to be an artist in the recording business. It’s pretty easy to see what NOT to do these days, but less obvious to know what’s right. As I find myself free from the bloated bureaucracy of major labels, finally able to do whatever I want… well, what is that? What is the “right” way to release records, treat your music and your audience with respect and attempt to make a living as well? I have a number of musician friends who are either in a similar situation or feel they soon will be, and it’s a real source of anxiety and uncertainty.

nin.com [the official nine inch nails website]

In the same issue of Wired where we interviewed Reznor about this experiment, David Byrne ran the numbers on traditional music publishing. He reports that for a $16 CD, the artists should expect to get $1.60. Reznor notes that Williams’ previous record was released in 2004 and has sold 33,897 copies. So for that previous album, Williams personally made $54,235.

The Long Tail: How not to do a FREE calculation, Trent Reznor edition

It is possible, though, that contemporary standards of what constitutes fairness in music consumption have simply changed. While today the news broke that the last of the four major US record lables, Sony BMG, has announced it will offer DRM-free music - that may not be a shift as far as the market would like things to shift.Given the huge numbers of music downloads that are free and illicit, the market seems to be voting for free music. That despite the risk of being sued, even.

Is it Time to Declare Music Downloads a Loss Leader? - ReadWriteWeb

In my opinion this demonstrates the inherit problem with all Media industries. They are too big and not organized to be profitable in a digital economy. You don’t try and monetize the content, you monetize the benefit.

Mike Masnick over at TechDirt has an excelent series of posts that address the economics of free:

1. If done correctly, you can increase your market-size greatly.2. If you don’t, someone else will do it correctly, and your existing business model will be in serious trouble.

If that first point is explained clearly, then hopefully the second point becomes self-evident. However, many people immediately ask, how is it possible that giving away a product can guarantee that you’ve increased your market size? The first thing to understand is that we’re never suggesting people just give away content and then hope and pray that some secondary market will grant them money. Giving stuff away for free needs to be part of a complete business model that recognizes the economic realities.

Techdirt: The Grand Unified Theory On The Economics Of Free

In a day and age where a “media company” could outsource crowd-source it’s entire product development, talent discovery, production, content distribution and marketing to the Web, how much product cost is left?

At that point isn’t the Web itself the *new* Media company?

Technorati Tags: media, music industry, radiohead, trent reznor, business

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