Trent Reznor Continues To Show How Free Music Works In A Business Model

from the smart-guy dept

Fri, Jun 6th 2008 8:31am — Mike Masnick

After his Ghosts I-IV experiment that proved to be a huge success, Trent Reznor wasted little time in releasing the next Nine Inch Nails album as a completely free download. And, of course, he didn't just give it away and pray. At the same time as he released the album, he notified fans of his latest concert.

Now, in an attempt to make that concert (whose tickets are a scarce good people will pay for) even more valuable, he's giving away free tracks of all of the opening acts on the tour. In other words, he's giving people even more reasons to pay to go to the concert. He's giving away that infinite good (the music) to make those scarce goods (the tickets) more valuable. This fits with the model we were discussing just a few weeks ago, of bands giving free downloads to anyone who buys a concert ticket, to boost the value of that ticket. Thanks to everyone who sent this in.

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Filed Under: business models, concerts, downloads, free music, nine inch nails, trent reznor

42 Comments

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Anonymous Coward, 6 Jun 2008 @ 8:41am

Trent is my hero!
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JasonQ, 6 Jun 2008 @ 9:20am

NEAT!
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Anonymous does not Forgive, 6 Jun 2008 @ 9:28am

a brilliant man
a brilliant artist and business man. He's found a way to make it work and putting cry people crying over people downloading their music to shame. they could stand to learn from his example.
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Anonymous Coward, 6 Jun 2008 @ 9:31am

There's "getting it" then there's "Reznor-izing it".

The man is doing what he always has been. He kept his ear to the ground of what was going on in the business and adapted to survive rather than trying to force feed the old ways to his fans.

Music is an experiment in Darwinism. Adapt or die. Evolve or fall behind. There is no place for stagnation.
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James, 6 Jun 2008 @ 9:41am

Awesome!
Instead of crying (thank you Lars Ulrich you may now be seated), he's turning music distribution (at least for him and his bands work) on its ear. Go Trent!
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PaulT (profile), 6 Jun 2008 @ 9:49am

Damn, I hate to keep cheerleading for this guy but he keeps making all the right moves... This is also worth pointing out:
"the EP contains five high quality, DRM-free, fully-tagged MP3 files from a place to bury strangers, does it offend you, yeah?, crystal castles, deerhunter, and nine inch nails. your download will also include cover art and a pack of digital extras."
Notice something about the bolded text above? Yep, that's right, Reznor's offering even MORE than most paid-for downloads do! Keep up the good work, I hope others take notice of these moves.
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Eeqmcsq, 6 Jun 2008 @ 10:13am

Digital extras
Which cost nothing on Trent's part to duplicate and distribute to the downloaders while at the same time building loyal and appreciative fans for the extra cool and/or useful stuff. That's what digital duplication and infinite goods is all about. Trent would throw in a digital kitchen sink if he could.
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Eric, 6 Jun 2008 @ 10:20am

Hold on a second
I think saying that giving away a few free CDs proves a business model is kind of hasty. Trent's "give-away-the-audio-free-but-charge-for-the-extended-hardcopy-media" model is sustainable for NIN in particular, but in order for a model to really be viable, you have to have bands moving from obscurity to fame (or at least self-sustenance) by using this model from the start.

NIN is coasting along on the fame and fortune that they earned through a very different business model. Now they're able to be self-sufficient. I love NIN, but I still think what's going on here is more idealism than sound business practice.

Let's see some artists spring from nowhere to huge fame, giving away music for free the whole time.
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Anonymous Coward, 6 Jun 2008 @ 10:25am

Nobody seems to have mentioned this, but its worth pointing out. Not only is he increasing the value of the concert tickets by doing this, he is also giving free publicity to the opening acts. (Which will hopefully help point them to the correct business model)
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Mike (profile), 6 Jun 2008 @ 10:29am

Re: Hold on a second
Let's see some artists spring from nowhere to huge fame, giving away music for free the whole time.

Did you miss the part where this is about giving away the music of up-and-coming bands?

Besides, for years we pointed to up-and-coming artists using this model, like Maria Schneider, Jonathon Coulton and others, and people said it would never work for big artists.

Then when we show it working for big artists, we're told it will never work for small artists.
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Anonymous Coward, 6 Jun 2008 @ 10:32am

Re: Hold on a second
I didn't know NIN was my kind of music. When I heard Ghosts was all instrumental, it made me wonder. I checked it out and kind of like the sound. When he gave us The Slip, I found I really liked his vocals, too. Now YearZero is one of my favorite CDs.

Maybe I don't disprove your point, but Reznor's growing his fan base. All it takes is for otyher bands to follow suit and get exposed to more people than they otherwise would, and you'll see that this business modle doesn't realy on NIN's past successes.
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SomeGuy, 6 Jun 2008 @ 10:35am

Re: Hold on a second
Let's see some artists spring from nowhere to huge fame, giving away music for free the whole time.

I have to ask, why? Why does it have to be all-or-nothing? The modle works; maybe it works better once you're established, but the added exposure it gives you helps you get established, too. Where do you expect this to break down for less-known bands? The whole thing lends itself to getting your music out there and building fans.
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Eric, 6 Jun 2008 @ 10:35am

Business models
So....assuming that a "business model" is essentially a template for business success, which other entities can follow, Trent's business model goes like this:

1. Become an internationally recognized, famous superstar....somehow.
2. Give away your music for free.
3. Rely on touring profits produced by your ravenous fan base acquired during Step 1.

It works for Trent and more power to him. But don't forget the years and years of mass media assistance that he enjoyed. To look at this phenomenon while excluding the contribution of mass media is to look at the issue in a vacuum.

Don't misunderstand me, I'm not standing up for RIAA or record companies or anything like that. I'm also not saying what Trent is doing isn't good - it is. I'm just saying that to equate what he's doing with a "business model" is premature.
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Sarcasm, 6 Jun 2008 @ 10:36am

Re: Re: Hold on a second
Oh come on. Jonathan Coulton? Who's even heard of that guy?
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SomeGuy, 6 Jun 2008 @ 10:42am

Re: Business models
I think you're exagerating the necessity of NIN's previous successes. Yeah, they're a known band. But above Mike notes smaller artists who are using similar modles to make money off their performances. The modle is more like:

1. Give away music to build a fan base
2. Use the fan base to drive sales of scarce goods
3. Profit!

There are more details in there, and it's not a formula for over-night superstardom, but it's been shown to work on the large and the small scale.
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Anonymous Coward, 6 Jun 2008 @ 10:48am

I found Trent at Pretty Hate Machine by word-of-mouth from a classmate.

Then my friends found him through me.

Mass media may have helped somewhere along the way but I think he would have made it there on his own though it may have taken longer. However with the internet as extensive at it is now I think it would help speed things up. Heck, back then we only had BBS.
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Greg, 6 Jun 2008 @ 10:49am

Live show
One thing interesting to me is that his live shows are usually sold out anyways, at least where I'm from, so it seems unlikely that giving his music away free will help him much there. Does this business model mean he will just charge way higher prices for the show since he's generated additional demand?

I can see that model working very effectively for new artists that you've never heard of, though. Especially if it's not corporate suit-friendly music.
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Eric, 6 Jun 2008 @ 10:51am

@SomeGuy: Maybe, but I don't think I'm exaggerating it that much. NIN is a powerhouse mega-band. They play arenas around the world. They did not get to that point by giving away free music.

In a sense, I agree with your second part because it puts content as king. And in some cases it will allow musicians to quit their day-jobs. And if they have some very famous coat-tails to ride, they might even get to play at some pretty big venues. But still, in most cases to really launch a tour that is going to expand your scope, you need some kind of buy-in, some sort of investor unless you have all that cash on hand already (like NIN does). Maybe in the future that won't be record companies anymore. Maybe it means that musicians will operate on a financial scale more comprehensible to their audience. Maybe the limos with the hot-tubs in the back and the private chartered jets are a thing of the past. That would all be fine with me.

And for srius I have never heard of this Jonathan Coulton person, sry. :-)
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Anonymous Coward, 6 Jun 2008 @ 11:04am

Wait!! but artists shouldn't actually have to WORK (tour) to make money. Once they record an album, we should all be required to throw money at them, just for being!!!
Now they may actually have to rely on giving a good show!!!
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www.custompcmax.com, 6 Jun 2008 @ 11:14am

This is exactly what I have been saying forever. Market other products with the free music. Whether it is the concert tickets or other things like Tshirts, DVDs, etc... If people know you have free music, they will flock to your site to get it, and if you market it right, you will get sales in the process. What is even cooler about this is it cuts out the record industry, at least in the current model. If there is no money exchanged for the songs, what does the RIAA get? Nothing, unless you have a deal with them for the other merch. Trent is genius, and always has been.
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JJ, 6 Jun 2008 @ 11:17am

Eric, Eric...
I can tell you're new here, so I'll take it easy on you. Go back and read some of the archives. Every time a new artist makes it big by giving away free music, Techdirt does an article on it, and somebody posts a comment that says, "Yeah, it's great publicity stunt for a new artist but it'll never work for established artists." And every time a well-known artist like NIN does the same thing, somebody posts a comment trying to explain why it'll never work for the little guys.

Every time somebody is successful through giving away free music, somebody like you comes on to tell us why they're an exception. But each time it happens again, fewer of us believe you. We've seen all types of artists pull this off before, big and small.

As for the value this adds to the concerts: I never bother to go to a concert unless I can first borrow or pirate the music I expect to hear there, because I enjoy the concert much more when I know the music already. I'm always bored by the opening bands, even if they seem talented, because I've never heard their stuff before. I never got into NIN until I heard some of Reznor's free music (if it hadn't been free, I wouldn't have heard it at all) and now I'd happily to pay to go to a concert... in fact, I'd practically go out of my way to look for any excuse to give him money now.
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Chronno S. Trigger, 6 Jun 2008 @ 11:24am

Re:
"And for srius I have never heard of this Jonathan Coulton person, sry. :-)"

Ever play portal from the orange box? That ending song "Still Alive" was written by him. Just that song alone made him great in my eyes. Didn't he win some big gaming award for that song? I think you can still download it off of XBL for Rock Band for free.

On topic: I didn't listen to NIN before. I knew about them and I had heard them before (my sister is a BIG fan) but I didn't start really listening until he started giving the songs away. I now have Ghost, The Slip, and The Downward Spiral. I have Piggy stuck in my head at this moment.
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Alaric, 6 Jun 2008 @ 11:25am

Few Problems with this
I thinks its great that this model is working for trent but how often will it work?

1) Record companies spent a lot of money promoting trent in the 90s. This is very important as they've established a fan base for him via a very powerful marketing channel. You can't exclude this from the model. An indie artist can do the same as trent and nothing will happen because they were never plugged into the Record company's marketing machine.

2) If the artist has a record company and he gives away music then the record company will seek a big (bigger) share of concert revenues. That might not be all that good for the artist, as most do not like touring

3) This is also working because a major label act trent reznor is giving away stuff. That give it publicity. Not so sure the publicity factor will last if its common.
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Chronno S. Trigger, 6 Jun 2008 @ 11:46am

Re: Few Problems with this
I refer you to JJ's post. It pretty much sums up the response.
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NIN Lover, 6 Jun 2008 @ 11:50am

It's Free because the album sucks.
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mobiGeek, 6 Jun 2008 @ 11:51am

Re: Re: Re: Hold on a second
I never had, but apparently he's somewhat known
Being able to download his music means that I'll now give him a chance to enter my music repertoire.
See...his model works! I'm at a site devoted to technology, digital rights, etc... and I come across this dude's music. Would never have happened if all he did was follow the traditional label approach (I don't listen to the radio, never go into music stores anymore...no reason too...music died in 1987).
But I am willing to sample new things as long as the only risk to me is my investment of time. If I like it, I'll certainly pursue more of it. But I can't stand buying something for $15 only to find that I don't like it (and rarely can I be bothered to go out of my way to return something for $15).
Way to go Jonathan! Now, let's hope you have a product worthy of my time and effort ;-)
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Dave, 6 Jun 2008 @ 11:59am

I can't believe all you doubters. Didn't you actually read what happened with his Ghosts albums. Trent made a ton of money without, NOT including touring. Some people like hard media, records, special editions, and some wanted higher quality version. And he made far more than most bands do on a nromal release.

As for the small bands not being able to do it I laugh at you. Trent is big enough where he would have made a decent cut of album prices. New bands made nothing from albums. They made get a signing bonus in exchange for the album but I assure you the schakle of record company ownership is more expensive than doing it yourself.
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Anonymous Coward, 6 Jun 2008 @ 12:07pm

wasn't there a reply to a post last week about some chick who put her music up on youtube (for free) just to get exposure? And wow! it worked!

She sold a bunch of cd's online, she got signed to a deal and started touring as an opening act for some other better known artist.

Another is the chanting monks who got a deal after putting their works on youtube.

So it's possible to get exposure these days without using the traditional record industry pipeline. One thing I do find interesting, however is after these artists use the free medium of the internet to get exposure, they let themselves be locked down into the same old, "screw the artist" record deal that has been around for 50 years.

So it works for superstars like NIN. It seems to work for unknowns up to a point. The real question is, once those unknowns get "famous" (to a point) using free to the consumer, non-traditional methods, is it possible to keep going upwards in their career without the help of the record companies? Those cases seem few and far between, but maybe they just aren't being publicized.
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Eric, 6 Jun 2008 @ 12:18pm

Re: Eric, Eric...
Hi JJ, actually I've read TD in my feed for quite a while, just never really got into the commenting thing.

And wow, your response is pretty condescending - definitely encouraging of various points of view on the subject. I say that Trent enjoyed massive mainstream media support to put him where he is today - which is an objective fact - and you say "you'll take it easy on me?" Wow....thanks, I guess. Guess I'll watch out, wouldn't want to disrupt the peaceful intellectual equilibrium of Techdirt, or anything.

My point is continuously being overlooked and misinterpreted here. I'm saying, that this isn't a proven "business model" in the true sense yet. I'm not saying it hasn't worked in isolated incidents and in different incarnations. Trent himself would probably be first to agree that this is still pioneer territory here.

Trent got to where he was financially able to absorb the experiment (good or bad outcome) because of over a decade of mainstream media promotion and support. I'm just saying that you cannot eliminate that from the equation.
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SomeGuy, 6 Jun 2008 @ 12:23pm

Re:
But still, in most cases to really launch a tour that is going to expand your scope, you need some kind of buy-in, some sort of investor unless you have all that cash on hand already (like NIN does).

Well, giving away youtr music expands your scope already. When you have people around the country saying, "so, when are you touring through Mty City" and you say, "Guys, we'll do a National tour once we have the money to launch it -- and you can help!" then I'd bet you'll see your fans put up the backing to get the ball rolling. Not an over-night thing, but it's accessible to anyone who wants to try and take their musical career in that direction.

Jonathan Coulton is awesome. If you really haven't heard of him (I get the feeling you're being sarcastic) you should really check him out. www.jonathancoulton.com I think; failing that, just Google him.

As a final point: I don't think anyone would be upset if superstardom died. It's been my experience that when an artist "makes it big," they tend to lose anything that made them worthwhile. You can only have so much for so long before the jaccuzi in your trunk ruins you, I guess.
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Lance, 6 Jun 2008 @ 4:33pm

Janis Ian's Take on Free
I was wondering if any of you have read Janis Ian's 2002 article on this subject? Interesting read considering the date of the article: http://www.janisian.com/article-internet_debacle.html
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JayB00, 6 Jun 2008 @ 9:15pm

Re:
So it works for superstars like NIN. It seems to work for unknowns up to a point. The real question is, once those unknowns get "famous" (to a point) using free to the consumer, non-traditional methods, is it possible to keep going upwards in their career without the help of the record companies? Those cases seem few and far between, but maybe they just aren't being publicized.

This is a good question, IMHO.
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Cixelsid, 7 Jun 2008 @ 2:46am

Lol
I remember when Techdirt first reported on the Reznor's Hijinks - a lot of the comments were "lolz does NIN still exists?!?" now its more like "OMG trent is a god ive got piggy stuck in my head".
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PaulT (profile), 7 Jun 2008 @ 6:50am

Re: Re: Eric, Eric...
Eric, at the risk of repeating the point made by JJ above, that's what we're talking about. You're repeating a talking point that comes up whenever Trent / NIN is mentioned (as well as Radiohead, Saul Williams, etc.) - "it's only working because they're established artists".

Then, when a new / independent artist comes along and does something similar (Jonathan Coulter, Harvey Danger, Jill Sobule, Flo Rida, a classical artist whose name escapes me), the response is generally "yeah but that won't work for established artists".

I'm not saying you're completely wrong but both sides of the coin are gathering more and more evidence that this type of model does work.

Besides, in this case Reznor isn't only helping himself. There's 4 lesser known artists that he's pushing with this freebie. There may well be people who haven't heard of those artists but like the music and end up buying their albums if they can't make it on the tour. He's using his fame not only to help explore new, exciting ways to sell music, but to help new artists achieve what he's achieved.
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Anonymous Coward, 7 Jun 2008 @ 8:36am

NIN
Funny, but I thought this band was a "group", and not just one person.

BTW, it does have the best damn drummer in the music business.
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Melted Metal Web Radio, 9 Jun 2008 @ 12:45pm

Remember that 'Prince' ..
Just remember that 'Prince' was the first to do this years ago. Give credit where credit is due.

Bill Wilkins
http://www.meltedmetal.com/
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STEVE, 10 Jun 2008 @ 2:10am

WHO IS PAYING MY PRODUCTION COSTS?
HELLO DUMB DUMBS!!!

THERE IS PRODUCTION COSTS: producer, engineer, studio equipment, time. WHO PAYS FOR THAT???
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Mike (profile), 10 Jun 2008 @ 3:47am

Re: WHO IS PAYING MY PRODUCTION COSTS?
THERE IS PRODUCTION COSTS: producer, engineer, studio equipment, time. WHO PAYS FOR THAT???

Your fans?
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Overcast, 10 Jun 2008 @ 9:28am

HELLO DUMB DUMBS!!!

THERE IS PRODUCTION COSTS: producer, engineer, studio equipment, time. WHO PAYS FOR THAT???

that would be "There *are* production costs" - not that I normally correct grammar - but it's a bit ironic to call people dumb and then...

But in context with this - actually, a personal computer can do most all of that now. Supposing a person wanted to 'do-it-their self'.

I downloaded the new release from the web, and went and bought one of their older CD's I didn't own. So I guess perhaps that money, after being mostly taken from the band by the recording company; paid for some of that.
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NIN Fan, 14 Jul 2008 @ 1:48pm

Re: Business models
Media support, maybe, but I've been among the "rabid" fans of NIN since Broken came out. After buying that album I almost immediately went out and bought Pretty Hate Machine and the other earlier halos (and fixed, when that came out). At that time I would call the local rock stations (this is New York City, mind you), to request that they play NIN and was repeatly told that they could not play it. It wasn't until The Downward Spiral (and Closer, in particular) came out that commercial radio started playing NIN. The video for Wish might have been shown on Headbanger's Ball a few times, but radio DJs would have lost their jobs for playing that song apparently. I don't know what changed that a song with the lyric "I want to F*@* you like an animal" was suddenly acceptable.

What I'm trying to say is that NIN had a strong following before "mass media assistance" and that any press Trent ever received had more to do with what he was doing and saying than with what his label was pushing. Certainly you can't suggest that Lost Highway and Natural Born Killers made him a star. I don't think either of those films broke any box office records.
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Ivy, 21 Oct 2008 @ 4:38pm

Uhh...to the person who said that it's free because it sucks is SOOOO wrong. It's probably one of NIN's best cds to date. I honestly couldn't choose one album as the best, but it's one of the best to date. Just saying..........
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printing, 4 May 2009 @ 10:34pm

!!!!
We spent just under four weeks touring New Zealand’s superlatively gorgeous countryside. The impending autumn turned the whole world from mossy green to shades of gemstone rarely seen outside of a Harry Winston display case. The first part of our drive, through the slightly more populous North Island, took us from Auckland, through the volcanically active town of Rotarua, past Lake Taupo, onto the Tongariro National Park (where Mt Doom is located!) and finally plastic injection molding ended in New Zealand’s social, political and cultural capital of Wellington.
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