Another Band Starts Bundling Scarce And Infinite Goods

from the good-for-them dept

Thu, Oct 16th 2008 1:33pm — Mike Masnick

For many years we've been talking about a variety of business models that bands can use to still make money, even if their music is free -- often by focusing on the scarcities that they can sell. A big one, is access to the band. One of the first ideas we pointed out was how bands could effectively set up a fan club that fans could buy into that would give them special features: early access to concert tickets, backstage passes, private concerts, early access to music, view of the music creation process, chance to chat with band members, etc. All of those things are then made more valuable if there are more fans, so giving away the music only helps that business grow.

One of our readers, Kyle, points us to an experiment by the band Mudvayne that doesn't get all the way there, but does seem to move in that direction. The band has started a program called "The Album is The Ticket" that gives people a reason to buy the actual, physical album. When you do, you're given a code that lets them go to a website, get a one-year free membership into the band's "fan club" that includes early access to the best tickets at concerts. The band doesn't appear to have taken it to the level of also giving away and promoting free music, but hopefully they'll recognize that doing so would increase the demand for this kind of program. What the band is doing, effectively, is recognizing that they need to give people a real reason to buy the CD -- and that goes beyond music (because people can get the music for free). So rather than just focusing on the CD itself and what comes in the jewel case, they've recognized that by giving people a code they can also give them access to additional services.

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Filed Under: business models, cds, concert tickets, economics, fan clubs, mudvayne, music industry

12 Comments

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some old guy, 16 Oct 2008 @ 2:32pm

artificial scarcity created
ok, so they took an infinite good, made it artificially scarce and used that artificial scarcity in an attempt to sell more scarce goods.

I don't get it.

Why are they bothering to promote the delivery method that users care the least amount for?
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Griff (profile), 16 Oct 2008 @ 2:34pm

Does this really fly ?
Suppose I like REM. Enough to see them play if they came to my home town. How many of these "tickets" can you sell in my town (that get me priority gig ticket booking) - enough to fill 10% of the venue ? Obviously not 100% of the venue, or where would the exclusivity be ?

But the people who could REALLY want to see REM play when they came to town will buy the album anyway, won't they ? A lot more can afford the album but not the gig.
The album's 15 quid and the gig is nearer 40.

Plus, priority booking only matters when its likely to sell out (Incidentally, REM came to my town and had to change to a smaller venue for lack of sales - most of my friends said when they heard I was going "I didn't even know they were playing" - go figure !)

Here's another suggestion for "scarcity".
- Offer the download for 2 quid per album
- The version you get is totally unique (ie watermarked).
- A small number of versions have a special unique message encoded in them. Each unique message gets the finder a single, once only , gig tickets. Now your downloaded album is also a lottery ticket. Bit like the Willy Wonka gold ticket.
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anonymous coward's artificial intelligence, 16 Oct 2008 @ 2:35pm

Thats nice and all, I remember you writing an article similar to this one a while back, but not everyone wants to join in on the "fan club experience". So how does the band convince that percentage of people who are just casual listeners that continue to download the music for free. How do you change their minds? Or do they not even count?

They count for something..
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Cole, 16 Oct 2008 @ 3:13pm

Hmm
While there are holes in this logic, I agree with the article that it is a step in the right direction. No, not everyone likes fan clubs but maybe that idea can grow to something more universal.
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derby, 16 Oct 2008 @ 3:15pm

'early access to the best tickets...'

why not a coupon for an actual ticket?
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notyou, 16 Oct 2008 @ 3:21pm

Re:
They count for publicity. If one of them tells his friend about your band, or plays your song at a party and exposes it to someone new, and then that new person falls in love with your music, starts going to all your shows, buying all your stuff, and becoming president of the fan club, then realistically speaking, you got your money's worth from that first guy... Unless you're a greedy asshole who doesn't think that's good enough, in which case: KILL YOURSELF!
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kirillian, 16 Oct 2008 @ 3:26pm

@ anonymous coward's artificial intelligence - it all depends on how you look at it...Do you want the approval and nod of the common people or do you just want their money? Personally, being from the South (Texas, specifically), I value customer service a lot - because customer service is extremely important to most people down there. Now that I live up North, I can't even begin to tell you how much stuff I do or buy that is based completely off customer service. It's not even a conscious thing for me, even though I'm usually aware of it after it's all said and done. I don't think I'm totally alone. While I think that many people could care less either way, I really do believe that the vast majority of people are affected to a significant degree by the way they are treated, whether or not they think about it...

For this reason, I think that taking the approach that Mike has been advocating for quite some time now is far superior to the business models that are currently embraced - bleed them for every dollar they have. Seriously...maybe I only know this because I grew up on the street, but...when the drug dealer keeps raising his prices because his clients are addicted to the drug, somebody pops him off...the smart drug dealer (and the one who actually makes TONS more money over the long haul) is the drug dealer who keeps stable prices and is known for his reliability...because people on the street protect their own...as long you aren't upsetting everyone, no one's gonna rat on you...even people who don't do drugs aren't stupid enough - cuz then THEY will be the ones who piss off the community...

Off the extreme analogies...I really believe that people are starting to get fed up with the BS and the money-stealing of the big media corporations. Disney is the perfect example of a ruined reputation. Disney doesn't have the magic anymore...In fact...the only reason that my family and the people that I knew around me even bought Disney movies was because everyone thought that they were good for the children (nobody had the money to afford them...they just got them anyway because you take care of the kids...its part of life). Now that the magic is gone, Disney might be making money still, but that loyal customer base is gone...
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amused, 16 Oct 2008 @ 3:34pm

yadda yadda yadda
So when this experiment fails, will you admit you're wrong? I thought not.
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Mike (profile), 16 Oct 2008 @ 3:47pm

Re: yadda yadda yadda
So when this experiment fails, will you admit you're wrong? I thought not.

If it fails, it would be great to explore why. In fact, in the past we've discussed when similar tests have been considered failures and where they went wrong:

http://www.techdirt.com/articles/20080522/1545021204.shtml

So, sure we'll discuss it. It's rather presumptuous, not to mention wrong, to suggest that we wouldn't.
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Blaise Alleyne (profile), 16 Oct 2008 @ 5:09pm

Re:
Sure, it'd be great to give more and more fans a reason to buy something, but you don't need to make money from every person who enjoys your product. There will inevitably be people who aren't interested enough to put money down, but their interested enough to listen and share it with their friends (some of whom might be willing to put money down). Or maybe someone who isn't a big fan today will become a bigger fan down the road, and eventually get to the point where they're interested in the fan club experience. They count, but you don't have to reach into their wallets in order for them to count.
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Mr Big Content, 17 Oct 2008 @ 1:49am

Re: 100% Monetization FTW!
Blaise Alleyne had the temerity to expostulate thus:

... you don't need to make money from every person who enjoys your product.

Yes I do. For anybody to have fun without paying me is just immoral. Every time they nod their head to my beats, I want to hear that cash register going: ba-dump, ba-dump, ka-ching, ka-ching.
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psikeyhackr, 17 Oct 2008 @ 8:10am

Sound Quality
I have thought that bands should try to promote sales on the basis of sound quality and hook up with hi-fi companies to promote the appreciation of good sound.

Give the music away in low quality mono but sell the high quality version. Psychoacoustically compressed 24 bit with 64K sampling could sound better than normal CDs but still fit on them. But go to CD shops to pay to have your selected songs burned. It is ridiculous to have to buy a CD for just 2 songs that you like.

Too many people buy crappy audio gear anyway.
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