Reputation Is A Scarce Good... As Metallica Is Learning
from the oops dept
On Thursday, we wrote about Metallica's latest foray online, where it's attempting to build a community around its latest music. Given Metallica's history of attacking Napster all the way back in 2000, we expected there to be some pushback, but what was really stunning was how many of the comments were from people (many of whom had been big fans of the band) still pissed off about Metallica's actions, and refusing to have anything to do with the band. We weren't the only ones to notice. Wired had a story on Metallica's efforts and discovered exactly the same thing. The vast majority of the comments were vehemently negative. Clearly, Metallica really tarnished its reputation by its actions eight years ago, and it's still paying for it.This brings up a good point, that we've mentioned in the past in the comments, but not so clearly in a post. A person, organization, band or company's reputation is an important "scarce" good -- and once damaged, it's quite difficult (though not impossible) to rebuild the shattered goodwill. When talking about what would happen in a world without copyright, for example, people often say "but in a world without copyright, couldn't someone just copy your own creation and pretend they were their own." The answer is yes, but they do so at the risk to their own reputation. If the news comes out that the person/organization/band/whatever was taking others' works and not giving credit where it was due, that would harm their reputation. And, as Metallica is learning, a tainted reputation can have serious long-term impact.
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Filed Under: metallica, reputation, scarce goods
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yup
That type of relationship is not easily reversed.
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Re: yup
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Re: yup
Don't be so proud of your short-sighted actions, you could have had way cooler things to brag about on the internet!
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Wasn't there a recent South Park episode?
Personally I buy all my music, I know I am a dinosaur. Still I won't buy a Metallica CD nor support them in any way, since I thought they were being shills for the record labels.
Most artists don't get much if anything at all out of a record deal/royalties. They only really earn their money via concerts and as you mentioned merchandise. I have local musician friends who confirm this.
So when I hear the RIAA say it hurts the musicians - that's really a load of crap. It only hurts the record industry - lawyers, overpaid gatekeeping record execs, and those that work at the labels. In my estimation, they are nothing but leeches, who profit off the creativity and work of the musicians.
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Re: Wasn't there a recent South Park episode?
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Re: Re: Wasn't there a recent South Park episode?
(now hows that for some awesome shilling?)
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Re: Wasn't there a recent South Park episode?
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Re: Wasn't there a recent South Park episode?
So when I hear the RIAA say it hurts the musicians - that's really a load of crap."
I've seen this argument over and over again, and this is a very simplistic way of looking at it. Yes, most of the direct money off of the CDs goes to the record label, but because they are able to make this money, the label is able to exist. Label's will not sign bands if there isn't money to be made. How does the band and fans benefit from record labels? Simple. The label invests more money into the creation of the album then most (except a few well established) bands can afford. In turn, the potential is there for a better product. Also, the label again can do more to promote the band then most can do on their own. In turn, you the fan are more likely to hear about a particular band.
Regardless of your position, and whatever business models you think do or don't work, if you're going to argue this, please do it honestly. We all know, or should, that there is a trickle down effect. If the label loses profit, they have less they can invest in the artists, and the artist lose profit.
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Re: Re: Wasn't there a recent South Park episode?
the technology available to the average consumer today is far more than what it was 20 years ago. With an acoustically decent room (not hard to accomplish) a few mics and a computer (with plenty of freeware or stolen audio progs) any band can create a decent album of comparable quality to "professional" studio output. And the technology advances every year, making it cheaper,easier, and better.
As for "promoting" the band, television and radio are 20th century dinosaurs. more and more people will be getting their information/entertainment primarily from the internet (as i do) So promoting your band yourself on the internet (as i do when i'm not being lazy) is not only cheaper(as in free) but more effective. Youtube, Myspace, Soundclick, whatever.
Recording Labels are obsolete. And free market capitalist especially should realize that paying for music is a thing of the past. The capitalist ideal is simple: competition drives prices down while increasing quality to the consumer. If i can get a good product at a lower price i will. Never mind "stealing" there are hundreds of thousands of artists out there giving their music away for free. On purpose! And every year those rebel artists get a little bit better. So when you corporate idiots finally figure out how to make your music theft-proof, we rebel artists will be there to fill in the gap, watching you wither and die.
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reputation is also something lost...in metallica's case
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Re: reputation is also something lost...in metallica's case
Still, my wife and all still respectfully refer to them as "The pilfering grab asses." (Camp chaos flash cartoon term over the whole napster thing). We do not allow their music on the premesis.
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Re: Re: reputation is also something lost...in metallica's case
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Case in point...
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Re:
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Good for them
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Screw the whole music industry
Then came them trying to destroy new technology and being pawns of the music industry. That was the end of my relationship with Metallica. Done and over with.
But it wasn't just Metallica I wrote off, but the entire music industry, all music. The entire industry just disgusts me, as it continuously lies about the artists and writers not getting their fair share, but it's always been like that, because it's always been the corporations that got the majority of the money. And then they waste that money on crap like Michael Jackson and other pop losers, not to mention all the lawyers they waste money on, and it just makes you not want to fund a terrorist organization like the music industry.
The toughest thing to get back when it's been damaged is the reputation. Even people who have been falsely accused of things have had reputations that were damaged forever.
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Re: Screw the whole music industry
The way to really fight back is to support independent music. Avoid all music by RIAA members, buy direct from the band or an independent website like eMusic or AmieStreet. If nobody buys any music, their attacks will seem justified. If the same money is used to make independents more successful, that argument disappears.
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Re: Screw the whole music industry
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I ran into the same thing in another context
Author: To prevent piracy, the police should have the power to search anybody's hard drive online and delete anything they deem suspicious. Anybody who objects to this is a thief or thief wannabe.
Me: I object vigorously. And aren't you being a bit harsh calling somebody who has bought copies of all your books a "thief"?
Author: Big deal! All the royalties I've gotten from you wouldn't send me to dinner at my favorite restaurant!
My formerly complete collection of the "gentleman's" works, many of them signed by him, promptly became pulp fiction. I also swore a blood oath that I'd never again give him a dime or proofread any of his books.
Since then, I also haven't even been able to find any interest in reading the pirated copies of his stuff that are available on the net.
Metallica, meet S. M. Stirling
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metal head
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True
One wonders how much different things could have been if Metallica hadn't reacted the way they did. Perhaps if the industry had a better example, they might still have a chance to survive in the new market.
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I know very little about Metallica
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Metallijerks
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Successful Biz Model
Were the highest grossing touring band of all time
Still sell high volumes of CD's of these same concerts
Made huge amounts of money for both themselves and production company
Created a vibrant community around 'trading' that fed the touring (read- money) machine
With the CD market dying musicians are moving to touring more to make the coinage they want/need. Regardless of all the other issues surrounding the GD, their biz model ROCKS!
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Re: Successful Biz Model
They didn't like people to copy their studio albums but they probably weren't copied often because the live shows were absolutely where it was at... with "Drums and Space"(something hard to describe musically but worth hearing at least once) being a part of the show, most of the albums sucked comparatively.
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Please explain
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Re
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Re: Re
Considering that "Metallica" is a noun and it would be impossible for a noun to attack Napster, I think you're an idiot. Sorry, but it's true.
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How about proper nouns? oh wait...
Thanks C Sense, that was giggle out loud funny. As for your other post, search for scarce goods in techdirts search box, and read Mike's other posts on the difference between scarce goods and infinite goods. They are very much worth reading.
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Re: Re: Re: Re
Grammatical objects never perform actions. People and other physical objects perform actions. So when Lars performed an action on behalf of Metallica, by attacking their fans, those fans turned around and blamed and hated Metallica.
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Re: Ima Fish
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Re: Re: Ima Fish
And a person who thinks a noun can file a lawsuit is not a retard?
X made the asinine comment that Metallica did not attack Napster, it was a member of Metallica. Which is idiotic because 1, Metallica cannot do that and necessarily needs a person to do that, and 2. a person did in fact do that for Metallica.
Thus blaming Lars instead of the band makes no sense. Now, if the rest of the band had told Lars to shut the frick up. Maybe I'd agree with X's point. But that never happened. So the entire band is to blame for their fiasco.
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Re: Re: Re: Ima Fish
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http://www.google.ca/search?q=define%3Anoun
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Pretty soon they had a huge fan base. Large enough that their initial independent releases made the billboard charts. Which is shocking considering the complete lack of radio or video support!
That huge fan base then got the band a major label deal with Elektra Records. And the rest, as they say, is history. History, until they turned and spit on their fans by suing them. Good work there ungrateful idiots.
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Metalica who?
So, metalica who?
Dan
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There will always be some people who always steal, but that is usually a small percentage. The only time a large amount of theft is when the balance between supply and demand is off. Most 'art'(music/videos/etc) being digital, there is now an virtual infinate supply and a limited demand. The day most people think/act that artists/producers should not get paid because they can copy for free is the beginning of the end of society.
*AA needs to learn to work with society rather than against it. Not to mention that ALL laws should help society, directly or indirectly, and none should hurt it.
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Re:
Which is it? Do we only focus on the good to society, or do we also make sure to protect the profits of certain individuals?
The day most people think/act that artists/producers should not get paid because they can copy for free is the beginning of the end of society.
I don't think anybody is saying artists should not get paid. The questions are what they should get paid for, how, by whom, and how much.
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Re:
Kinda like Billy Bragg whining about getting paid and paid a lot like any of the numberless capitalists he keeps attacking with his music. (Bragg, bless him, is somewhere to the left of Karl Marx.)
No, art is not a commodity. We're not talking art here. We're talking peformance. A recorded song is a performance. One very unlikely to ever be repeated live or anywhere else due to retakes, dubs, overdubs, sweetening, filtering and on and on and on.
Like it or not performance is, and always has been, a commodity.
Now, unless you're a band that is good enough and dedicated enough to record in a single take, say The Who, Led Zeppelin on their better days, Jethro Tull any time and so on, you're wanting me to pay for a studio recording which is, in fact, a promotional piece for a musician so that people will come to a concert where the musician(s) actually get paid, sell bling and other things that they'll make money on over and above their recording contract where they're lucky to make a dime.
Oh well.
As for social obligations "artists" have a higher calling on that than any of the rest of us? To get paid for our labour?
And no,its not the beginning of the end for society or much else. It's a massive shift in how the buisness end of music is done and promoted. Much the same as when recordings became a viable form of mass entertainment.
ttfn
John
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You guys are fans
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Re: You guys are fans
And despite being completely agnostic towards the issue you also took the time read it and post a comment. Now who really has too much time on his hands?!
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Real Metal
During an interview when asked what he thought about Metallica, Joey DeMaio replied, "I'm sorry, I don't listen to country music."
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Re: Real Metal
DeMaio is an awesome basist though.
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Re: Real Metal
Metallica were jerks long before the internet.
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Dunno about scarce
I guess this goes back to that Doctorow novel where reputation was currency. Never quite got my head around the economics of it but the basic point is that reputation can come and go, be multiplied or divided depending on a variety of factors not all under your control.
So since reputation can be created for no cost, I trust my friend Bob, if Bob likes something it's earned reputation from me for free, as long as I think Bob and I have simlar tastes in whatever it is. Sure you can earn reputation for a cost too, where you expend effort in gaining it, that first marketing drive to reach Bob for example.
Then you can also have your reputation ruined due to some troll on Digg posting a complete fabrication, yet your product, effort and value offering hasn't changed at all.
I don't think the economics of scarce vs infinite goods apply to reputation at all. I think a reputation economy does exists, and I belive it'll most likely be a form of utilising the reputation economy that ends up being the killer business model as everything moves from scarce to free, which is what socnets are counting on too I guess. But I think it operates on an entirely different set of rules than supply/demand, rules which I certainly don't understand.
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Re: Dunno about scarce
your initial investment hasn't changed, nor has the amount of time and effort you put into a product, but if your product stops selling because of your damaged reputation, then the value of that product has changed immensely.
the value of something is nothing more than what the market is willing to pay for it. markets are made up of people; people have money that they use to buy things. if people don't want to buy something, it's not worth very much. a reputation is what people think of you, so clearly what people think of you as a vendor or service provider has a very real effect on the value of your product.
you can't just sell something for whatever arbitrary price you decide, you have to see what the market (people) is willing to pay.
sure, you might get lucky and move a few units, but selling something at a higher price than the market is willing to pay is not sustainable.
the right product, at the right price, from a reputable vendor, is worth exactly what it sells for. if people stop buying that product, it becomes worthless. if your reputation influences the sale of your product, then it influences the value of that product.
if you can sell something for a million dollars, it's worth a million dollars. if you can't sell it at all, then it has no market value.
if your reputation is damaged to the point that people are not interested in your products, like in metallica's case, then your products have decreased significantly in value, and may actually become worthless, regardless of your investment or your personal feelings. that's why there are phrases like "it's worth less than the paper it's printed on" and "it's just business... nothing personal".
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Re: Dunno about scarce
If you wreck it, you cannot just go get another one, you must work very hard and try to repair it. No guarantee you will be able to.
Some people will never forgive you, as you can see from the tone of these letters.
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Hey they aren't all at fault!
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You just disproved your entire point. If you trust your friend, you must base that trust on something. You would not trust on blind faith an opinion from someone you did not know. Thus, trust does not come out of nothing. It comes from past behaviors which necessarily have costs as energy was exerted.
Does that mean the cost of a good reputation is high? No, but no one said it was high.
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Re:
Well no, my point was that reputation is not a scarce good, if you consider that my relationship with my friend needed no input from you. All the effort that was expended to build the trust between me and my friend was expended by just us over time. and it's not the trust that's the scarce good there it's the time and skill to build and maintain the relationship.
Yet because my friend likes your product, I give your product more trust, so in effect you've gotten two "units of reputation" yet possibly only had to expend effort to obtain the trust of one person. And that scales out depending on how trustworthy/popular Bob is, and the intelligence of his friends.
When companies invest so much money in making something viral, they're directly trying to work this multiplication angle to get more value out than they're putting in. any good that you can do that with is not scarce.
I also don't agree with this, I think the cost of a good reputation is high, in some cases very high. PR firms, Brand consultants, etc are founded on this concept.
My point is simply that reputation can be increased at no cost to the subject of reputation, and therefore is not a scarce good.
The people with trusted relationships however are a scarce good, and that's the bit the SocNets are trying to monetise.
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Re: Re:
We can agree that it has value, and requires effort to create. We agree that it can be lost, though not given away or sold (at least I assume everyone agrees with that, but probably a bad assumption). But trying to fit it into these infinite/scarce goods categories is I think problematic at best.
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Re: Re: Re:Nasch
I also agree with chris (42) that reputation is a demand driver, positive or negative.
I do think it can be bought and sold, I think Social networks increasingly will try to monetise it, so I do think it's a kind of a good, just not in the sense that we know. And a business that can figure out a good business model using it as a good will do very very well as the net gets more social.
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Word of Mouth
However, one negative experience affects 250 people. Because people are much more likely to bitch and vent about a negative experience and the person told is much more likely to pass that info on. Or more just "I heard they are a bad company, or a stupid money hungry band" With no real first hand experience.
The numbers of people affected are probably pulled out of the air. But I think you would agree that positive word is much harder to get and maintain than negative.
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my two cents
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Cliff Burton R.I.P.
I would never wish ill will towards anyone and I'm not sure what the "airplane" reference has to do with Metallica. Maybe brett meant a fatal bus trip perhaps?
Ima, Lars would have fired Jason on the spot if he told him to shut the frick up about the napster thing. As far as Kirk is concerned he appears to be pretty non-confrontational and scared of James and Lars so he wouldn't have spoken out against the them. Jason and Kirk had very little or absolutley no say in the business decisions concerning Metallica at that time.
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I hope it still hurts.
Metallica lost fans for being greedy.
Ubisoft lost followers for its anti-piracy crap that they installed to your computer.
EA and Bioware were very close to doing the same, but on a larger scale. (EA could've potentially cut their revenue in half for the most popular game ever to be released [Spore] if they had kept up with their authentication process with SecuRom)
Also, piracy sites get MORE attention as soon as you try to bring a lawsuit to them.
Notice the trend?
We don't like idiots who dont know technology to be infringing on OUR turf. As gamers, I think we feel that we have a sense of duty to protect our "realm". Maybe it's just me, but I feel that I have more right to the internet and computer technology than some corporate a**hole who just wants money because I understand it better than they do. Does anyone else feel the same way? I get the sense that we're trying to stop companies from taking away our true freedom in the digital world. It's our escape from your corrupt REAL world and we will do anything to preserve it.
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I remember a time when Metallica was anti-commercialism
But as for Metallica whom claimed to be so happy with their loyal followers... AND THEN SOLD OUT! Your days ended the same day you decided to commercialize your selfish selves! I have NOTHING Metallica... At one point Right up till "RELOAD" (Someone gave it to me as a birthday present)- I had EVERYTHING METALLICA... Then I destroyed them all! Seek and Destroy is no more. Metallica has sold its soul to mainstream - and now - mainstream has given you, Metallica the same dirty shaft that you gave to your loyal fans! Do us all a favor... Follow in Faith No More, GnR, STP, RETIRE...
Lars, I know he's deaf but there is no way you can feel the base of a double base - and say it sounds the same as your new gay drum kit - That is Smashing Pumpkin's drums - give them back! THEY DO NOT PLAY METAL! THEN AGAIN - NEITHER DO YOU!
"LOSSERS!" - David Hasselhoff to his German team, in the movie "Dodge ball"
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Metallica Sucks!
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Hello? Is anyone home?
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Napster, schmapster
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poptallica will never recover
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Metallica still lives on...
Metallica still rocks in my boat and I will still be attending every concert they have in the area.
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Re: Metallica still lives on...
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metallicas whinning
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Indeed!
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Boring
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Best Buy USA
Best buy Store
Discount electronics
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