Nettwerk Testing Its 'Pay On The Way Out' Concerts

from the be-interested-in-seeing-how-that-works-out... dept

Tue, Apr 14th 2009 9:52am — Mike Masnick

Terry McBride, of Nettwerk, an interesting label based in Canada, has been running a whole series of interesting experiments that show how a modern record label can still be useful. When I saw McBride speak at Midem earlier this year, he mentioned an experiment he was running, which I never really wrote about. However, Nancy Baym points out that it's starting to get some press. The idea is a free concert to attend... where you're asked to pay what you think it was worth on the way out. Nettwerk artist k-os is doing this, setting up a "Karma table" where you can also get a free copy of k-os' "fan-mixed" album. This was the other experiment Nettwerk is running: rather than letting fans remix the album, they released all the stems so that fans could mix the album itself -- and then they're releasing both the best fan-mixed versions and the professionally mixed versions.

It's an interesting experiment, and it will be worth watching (especially if McBride is willing share any of the actual results). It does seem like a risky move, because you're taking on the whole upfront cost of putting on the event -- giving away a scarcity, rather than an infinite good. However, depending on how the rest of it is structured they could end up making some decent money out of it. I'm just not sure it's really the best model, since giving away the scarcity for free gets much costlier much faster.

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Filed Under: business models, concerts, experiments, free, k-os, terry mcbride
Companies: nettwerk

23 Comments

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Yohann, 14 Apr 2009 @ 10:04am

Good idea if...
It might be a good idea if they offered something for a certain price, but they don't give out what that price is. Higher amounts that people are willing to pay could give them free stuff that nobody else would get unless they paid. Sort of like an auction for items.

If someone pays $100 because they want to be in the "Prestigious" tier, then they might get a free concert ticket for the next show... or something exclusive from the band, etc. People (especially men) tend to be *very* competitive, so if you turn the "who can pay the most" into a competition with bragging rights... *shrug*
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ReallyEvilCanine, 14 Apr 2009 @ 10:09am

While I like some of the ideas of pay-what-you-like, that's not going to work for a concert. Mike, you've already gone over the factors of true scarcity in concert venues (limited number of locations, dates and seats, scalping as a means of market correction, etc.) -- this would be offering rent-seekers a field day.

Worse, the reality of concert-goers at small gigs and venues is that whatever money they have on them will go for beer. They might put a bit aside for swag but the ticket is normally a sunk cost, paid out well in advance of the gig so no longer even a rational consideration. A change to the mindset can't come easily. Venues, knowing that the visitors will have paid nothing, will up the price of all drinks and food since they're providing a venue with great music... for free!!! That's how they'll frame it. The venues will cash in, the bands will get squat-diddly.

This then pushes the bands back to being little more than house bitches, working for any pittance the management throws them (after charging them at the last second for all their beer which was supposed to be free). The ticketing model got bands out of this hell in the first place.
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- Anonymous Coward, 14 Apr 2009 @ 10:32am
  
  Re:
  they're providing a venue with great music... for free!!!
  
  Or the band is left paying for the venue without any ticket sales to cover it. This is part of why mike says it's probably not the best idea. Giving away infinite goods works because the marginal cost is zero -- making one is the same as making a hundred. Not so for something physical like a concert seat.
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Claes, 14 Apr 2009 @ 10:28am

I have seen this many time in the case of concerts given in churches. Instead of an entrance fee you pay a volontary "outrance"/exit fee. I think this works well for two reasons: people are used to collection, and there's only room for a limited number of people in a church which gives a more intimate feeling which might make people more willing to donate.
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Matt, 14 Apr 2009 @ 10:43am

lot easier on staff, too
Since all you have to do is check for security you don't have 8 billion ticket handlers and also ticketmaster can't scalp the concert either.

Probably ends up significantly more money than artists promoted by ticketmaster make.
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TheStuipdOne, 14 Apr 2009 @ 10:44am

It Might Work
This is an ideal model for bands trying to build their name up some in their hometowns. It is essentially what most bar bands do. I don't pay anything to go into many bars that have a band playing, but the band is accepting money. Drunk people can be very generous.

It just has to be structured so that the band isn't out anything other than their time if nobody gives anything. Venues make a lot of money just from people being there, so it shouldn't be too difficult to negotiate with them.
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Anonymous Coward, 14 Apr 2009 @ 10:46am

Isn't this model similar to what street performers have always done? The main difference here is that the artist is having some expense up front in terms of renting a venu and doing the necessary things like setting up security, renting trucks to move equipment, paying insurance, etc.

Still, the model might work if the up-front costs could be minimized or if it could be combined with other models to pay the up-front costs.
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WeirdHarold, 14 Apr 2009 @ 10:52am

Not feasible
K-os indeed.

By the by, Ive never heard of these people, nor Canada.
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- Anonymous Coward, 14 Apr 2009 @ 11:32am
  
  Re: Not feasible
  Your comment is not feasible, it's weak.
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- DS, 14 Apr 2009 @ 12:10pm
  
  Re: Not feasible
  Kos-Mos?
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- lulz, 14 Apr 2009 @ 12:55pm
  
  Re: Not feasible
  Guys, c'mon. Look at the link in the name: Uncyclopedia.org.
  
  WierdHarold may be a troll, but he's not that obvious about it, you impostor!
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  - The infamous Joe, 14 Apr 2009 @ 2:13pm
    
    Re: Re: Not feasible
    He/She should name him/herself "Parody Harold" and be done with it. He/She lacks the blind faith in all that is corporate, making him/her easily noticable as a fake.
    
    I, for one, just ignore him/her.
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RoadRash, 14 Apr 2009 @ 11:04am

Can't work
Imagine the lineups just to get out. You are hot sweaty and tired (and maybe drunk/stoned) and you just want to go home. Now you have to lineup to pay?

Or what happens when an emergency happens - EVERYBODY OUT! - how can you collect from a mass exiting?

It's great Terry is thinking of alternatives, I applaud him for it, but this one doesn't stick.
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- bulljustin (profile), 14 Apr 2009 @ 12:51pm
  
  Re: Can't work
  Gotta agree. I've seen a money can on the way out where folks can toss cash on their way out but most just walk on by. Once they've consumed a show and enough intoxicants, the only thin on most people's minds is getting home or to the next party.
  
  Additionally, you can't force people to line up to exit. Someone will eventually try to claim felonious or unlawful restraint and try to take all the money the band made and then some.
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  - PaulT (profile), 15 Apr 2009 @ 6:18am
    
    Re: Re: Can't work
    OK, 2 things:
    
    ""Gotta agree. I've seen a money can on the way out where folks can toss cash on their way out but most just walk on by."
    
    So? If most walk on by, maybe they didn't actually enjoy the show and so are paying what it's worth. Even if they do, how many bought drinks & merch instead of paying a door fee? How many of those would not have been there to begin with if they had to pay up front? From the article, it sounds like those who pay get a "free" album, so they're really just buying the album on the way out - more of an incentive to pay the cash than a random can, surely?
    
    "Once they've consumed a show and enough intoxicants, the only thin on most people's minds is getting home or to the next party."
    
    So, maybe taking a cut of the drinks revenue instead of the door cover might be a good idea? I don't think we're talking about bands who can fill stadiums with their name alone. We're probably talking about acts who might not fill a venue with a standard door charge.
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Andrew Bray, 14 Apr 2009 @ 11:10am

Just controlling what's charged at the door
At almost all of the shows my band plays, the money taken at the door goes to the bands (and often a percentage to the promoter), and the bar keeps the money from alcohol sales.

So what we're reading above isn't all that revolutionary - really just a reverse (i.e. on the way out) pay-what-you-can (PWYC) type scenario.

To be honest, PWYC almost always works out better for us bands - most people always pay the $5 you'd charge anyway, and the rest pay more. There is a whole social pressure aspect at work here, and I think it generally works for smaller bands where ticket presales don't exist.
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- Man from Atlanta, 15 Apr 2009 @ 7:02am
  
  Re: Just controlling what's charged at the door
  People also need to remember that the band isn't just collecting money at the end of the show when people are trying to leave or have spent all their dough. The merch booth needs to be active selling merch and receiving the "pay what you will" throughout the night. I've worked with bands who performed for free just to get the opportunity to sell merch, which can pay off handsomely.
  
  I can certainly see this working. Not all the time, but for the right bands and in the right situations. It can and obviously has worked.
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Shawn, 14 Apr 2009 @ 12:29pm

The last ozzfest I went to 2007?? was 'free' as in the ticket price was $0.00 (I think ticketmaster still took their pound of flesh) there was no collection on the outbound side. The tour was heavily sponsored and there were plenty of ads around the venues, onstage thanks to the sponsors and pleas to the audience to "buy merch cuz that is how the bands get money for beer and weed!" I think a model that mixes these elements can succeed epically if the band can get the sponsor to front the facilities costs
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Cecil, 14 Apr 2009 @ 2:29pm

BJ-model
My band gives BJs to people when we're done performing. People then pay whatever they thought it was worth.

Pretty soon, we're just gonna bend over and let 'em have at our backsides. Maybe they'll toss us a nickel along with their inner-beans. Sure do love making music! Awesome career choice!
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- ReallyEvilCanine, 14 Apr 2009 @ 4:30pm
  
  Re: BJ-model
  Is that you Lars? Or is it Marshall again? You two never fucking learn. The saddest part is that you only got where you were because people shared your music and then paid to come to shows and buy the schwag. Hell, Lars & co. even promoted it; there are still private vids up on GooTube with Jimmy Het telling people to share the music (not to mention that awkward scene from the early days in the VH1 hagiography). It's not about selling pieces of plastic anymore, but concerts are not an infinite good. The point of my original post was exactly this, you dumb cock.
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- Man from Atlanta, 15 Apr 2009 @ 6:51am
  
  Re: BJ-model
  If your purpose for making music is making it a career, you are in the wrong business. Find something you like to do and make a career out of that. No one "deserves" to make money for making music.
  
  It does however seem you have a penchant for prostitution, or at least hyperbole. Good luck with both.
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terry McBride, 15 Apr 2009 @ 3:26pm

data
I will galdly provide the data when its all said and done ..... their are multiple donation points, for example we have the David Suzuki Foundation out with us. We also think that way more fans than we can fit into the venue will show up, which creates another opportunity... we also have Rogers mobile unwriting some of the risk
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geoffrey hohlmann, 15 Apr 2009 @ 4:52pm

sneaky
Seems to me that every time I read about this McBride fellow he is trying hard to portray himself as a visionary, whilst everything I hear about him in the music industry is that he is a fraud and Nettwerk is dying a slow death. Rumour has it he is giving up on the music, his artists are dropping him like a hot rock and he is trying to squeeze money out of the yoga world instead.
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