Yes, Using Free In Your Business Model Works For Small And Large Bands

from the follow-the-bouncing-business-model dept

Wed, Oct 3rd 2007 7:57am — Mike Masnick

With Radiohead's new business model getting so much attention, we're hearing a bunch of folks start to claim that this kind of business model only works for big, established bands. Funny thing is, when we point to smaller artists doing similar things, people say that such a model may work for no name artists, but couldn't possibly work for big pop stars, who would inevitably lose money. The fact is that a business model that involves using the music as a promotional good can work for both small and large bands if you understand the economics of infinite goods and how to apply the appropriate business model based on the stage of the musician's career. So for all those claiming that the Radiohead situation is unique because they're so well known, can you please explain why other, significantly less well known artists have done quite well using similar models? The simple fact is that these types of business models allow some less well known musicians to have a career in music in the first place -- whereas in the past they may have been forced out of music into another job. It's opened up plenty of new possibilities for ways to make a living by growing a fanbase and charging them for additional (scarce) products. So, yes, Radiohead will do well because they're well known and well-liked. But, plenty of less well known artists are adopting similar models because it helps them establish a following in the first place.

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Filed Under: business models, music

15 Comments

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RandomThoughts, 3 Oct 2007 @ 8:11am

There are many different types of business models, and they can all work. Do you think that the free business model can work at the same time the not free model continues to work?
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Rob Blatt, 3 Oct 2007 @ 8:31am

Brad Sucks
I direct you to look at www.brad-sucks.net, Brad's been doing this for a long time. You have the option to pay for the downloads, CDs or just download them for free. Granted he's not living off of the income (I don't think), but it's getting him more notoriety, fans and money than he would otherwise.
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shmengie, 3 Oct 2007 @ 9:44am

Re: Brad Sucks
great cd!
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AJ, 3 Oct 2007 @ 9:50am

I like it...
Well, I would be interested to know exactly how much a band like these guys would expect to make on every album sold using the record labels. I'm betting, and this is just a guess, they are making more money selling the album themselves, than they would using a label. Then toss in the advertising money from their web site, merchandise sales, and even the free publicity, I would bet there going to come out ahead on this one, and that’s got to scare the hell out of the labels. Of course there going to scream that model doesn't work, they can't afford for it to.
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RandomThoughts, 3 Oct 2007 @ 9:55am

Well, we should start to get a picture of how the model actually works, but are the lesser artists going it solo because they couldn't attract the interest from the labels? If so, will they build themselves up to a certain level and then turn to the labels? Will they determine that they can do it by themselves and then go out and do it?
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Anonymous Coward, 3 Oct 2007 @ 10:33am

As far as the question of how much bands like these get from the record labels on every album I've recently seen a quote of about $0.70 per album. Wouldn't take too many songs at $0.99, which people seem more than willing to pay for good songs, to do better than what they get from the record labels.

This also assumes that what is reported sold by the record labels is what is actually sold. There have been several lawsuits against the record companies for their accounting practices in not giving the artists what they were due even based on the one-sided contracts they have with the record companies.
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Anonymous Coward, 3 Oct 2007 @ 10:47am

Re: Brad Sucks
http://www.bradsucks.net/
Fixed the URL for you!
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Anonymous Coward, 3 Oct 2007 @ 10:50am

Re: Brad Sucks
http://www.bradsucks.net/
Fixed the URL for you!
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Wolfger, 3 Oct 2007 @ 10:58am

small artists?
Let me get this straight: a jazz composer of 10 years with work on (among other things) a popular motion picture is a "smaller artist"?

Let's try Bob, then... Bob went through many bands, got two albums released on a major label, and was a boyfriend of one of Hollywood's top actresses.

These people are not unknowns. They may qualify as "smaller" in the sense that they don't make as much money as NIN or Radiohead, but that's mostly because their chosen musical genres are not as popular. The fact remains, they had careers before they started giving stuff away for free.

A better example might be Tom Smith, but then I'm not sure "doing this for a living" necessarily equates to financial success on an appreciable level. And, again, Tom is a big fish in a tiny genre (filk). He was a big deal before he started putting his stuff online.
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Danny, 3 Oct 2007 @ 11:22am

Re: small artists?
I get the feeling that when people say "smaller bands" in this situation they mean it in the sense of not having a wide spread audience. Sure a band that started in a garage in California may within one year have sellout crowds in California but most of the populations of Texas or North Carolina may not hear about them until a year or so later and by then Californians will be crying "We were here first!" when that band gets big (and by "big" I mean a more wide spread audience).
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Michael G, 3 Oct 2007 @ 12:58pm

They all start out as small bands!
This is the most revolutionary ideas to come along since the recording industry began. Fact is anybody in the industry who didn't see this coming deserve to loose their jobs, and there is going go be plenty of them. Small bands have been using the internet for years and have successfully stepped above that crime riddled industry with tremendous success and minimal investment, a web site. For the first time in decades musicians all over the world have had the chance to get heard without the multi-trillion dollar record companies stopping them.

Having been involved in the business for many years I appalled Radiohead for being the first for to step into the future that has been so badly ignored this last decade. Not only did they provide a place for internet visitors to get their music but also gave them a place that the visitor to find all kinds of band information about Radiohead making them feel at home with them and of course concert information, and that's where the 'real money' is going to be made.

Everybody who loves music and knows the internet has to be asking themselves, much like I am, what took so long.
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RandomThoughts, 3 Oct 2007 @ 1:05pm

Michael, how can you ask what took so long after saying that small bands have been using the internet for years?

Maybe there is a reason that small bands start with the Internet and then go to labels?
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mingxhin, 4 Oct 2007 @ 3:31am

Small artists from Malaysia
A Malaysian student currently in Taiwan created and released 5 songs on Youtube, which became instant hits with views upwards of 2 million. His release of the song Negarakuku which the government deemed to be insulting to the national anthem and blasphemous to Islam only served to heighten his profile. Consequently he has released a self-titled album 'Namewee' in Malaysia, Taiwan, and Singapore.

1 year ago nobody in Taiwan or Malaysia even knew who he was. By utilizing the free business model he has made himself well known internationally (among Chinese communities) and made himself some money. His albums are selling like hot cakes. He even has a song 'King of Daoban' where he encourages people to pirate his songs.

http://www.youtube.com/results?search_query=namewee&search=Search
http://en.wikipedia .org/wiki/Namewee

So, yes free works for small artists.
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RandomThoughts, 4 Oct 2007 @ 6:25am

"which the government deemed to be insulting to the national anthem and blasphemous to Islam only served to heighten his profile"

Of course, now he is in hiding ala Salman Rushdie

"He even has a song 'King of Daoban' where he encourages people to pirate his songs."

Technical point here. He has the copyright. If he gives people permission to copy, swap, trade or whatever, it isn't piracy, copyright violation, theft, or anything else you choose to call it. As the owner, he can allow that.
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johnnyi, 8 Oct 2007 @ 8:19pm

free music and donations
Music will ultimately be free. Promotion is key! We work with some bands that do private events for free and ask their guests to pass the hat around...often they walk away with more money than they would have received if they sold a cd for ten bucks...on our site http://www.indiesolo.com - we feature ONE band a day and the community can donate credits, which they buy for cash, to the artists they like - a nice way to say thanks for giving us free mp3s!
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