Grateful Dead Always Knew How To Connect With Fans

from the but-of-course dept

Mon, Feb 15th 2010 2:36am — Mike Masnick

For many, many years, the classic example we'd use of a band who knew how to really connect with its fans (and give them a reason to buy) was The Grateful Dead -- who were, for years, the highest grossing band around, despite encouraging widespread sharing and trading of their taped shows (which they made easy for fans to tape). So while this article is really nothing new, it's nice to see this article about the band highlight some of how the band handled these things (thanks to Dave W for sending this in). While the band has always been very aggressive (too much so, in my opinion) in trying to enforce its copyrights over any kind of commercial use, it basically ignored them for non-commercial use:

ODDLY ENOUGH, THE Dead's influence on the business world may turn out to be a significant part of its legacy. Without intending to--while intending, in fact, to do just the opposite--the band pioneered ideas and practices that were subsequently embraced by corporate America. One was to focus intensely on its most loyal fans. It established a telephone hotline to alert them to its touring schedule ahead of any public announcement, reserved for them some of the best seats in the house, and capped the price of tickets, which the band distributed through its own mail-order house. If you lived in New York and wanted to see a show in Seattle, you didn't have to travel there to get tickets--and you could get really good tickets, without even camping out. "The Dead were masters of creating and delivering superior customer value," Barry Barnes, a business professor at the H. Wayne Huizenga School of Business and Entrepreneurship at Nova Southeastern University, in Florida, told me. Treating customers well may sound like common sense. But it represented a break from the top-down ethos of many organizations in the 1960s and '70s. Only in the 1980s, faced with competition from Japan, did American CEOs and management theorists widely adopt a customer-first orientation.

As Barnes and other scholars note, the musicians who constituted the Dead were anything but naive about their business. They incorporated early on, and established a board of directors (with a rotating CEO position) consisting of the band, road crew, and other members of the Dead organization. They founded a profitable merchandising division and, peace and love notwithstanding, did not hesitate to sue those who violated their copyrights. But they weren't greedy, and they adapted well. They famously permitted fans to tape their shows, ceding a major revenue source in potential record sales. According to Barnes, the decision was not entirely selfless: it reflected a shrewd assessment that tape sharing would widen their audience, a ban would be unenforceable, and anyone inclined to tape a show would probably spend money elsewhere, such as on merchandise or tickets. The Dead became one of the most profitable bands of all time.

The article goes on to talk about how lots of people are just now starting to look back at how The Dead ran their business to understand how to run modern customer-focused businesses today -- ones that recognize when it makes sense to let people do things that legally could be stopped (if not in reality) and how to take advantage of those situations. It's a good read.

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Filed Under: business models, connect with fans, grateful dead, sharing

32 Comments

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Fin, 15 Feb 2010 @ 3:32am

An example to kill... for
They encouraged fans to tape and share their shows... Oh the shocker! The IP maffia must not like that.
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Richard (profile), 15 Feb 2010 @ 3:49am

Basic Assumption
You have to start with the basic assumption that no one HAS to pay you anything. You have to make people WANT to pay you. Your biggest allies in this are the people who already want to pay you. Inevitably (given modern technology) there is no point in pursuing those who merely want to listen for free - since they don't cost you anything and they are better than the people who just ignore you completely.

It's like busking. Some people will walk past, others will stand and listen without paying, others will pay a little and a few may pay quite a lot. Your strategy has to be to move people "up the categories". That means that actually it is a gain to you when you convert a "walker past" (someone who hears you on the radio) into a "stay and listen but don't pay" (a file sharer) because the next step for that person takes them into a paying category.

Of course if someone stands next to you with a tape recorder, doesn't pay, and then sets up selling the recording on the next street you might get upset - but with a little thought you might realise that even that is not a loss and could be a gain.
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robin, 15 Feb 2010 @ 4:50am

Greybeard
what's old is what's new again. princess phones and cassette tapes have become tweets and utorrent. the economics haven't changed, nor have any sound strategies, nor have big content's abhorrence of customer service.
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The Anti-Mike (profile), 15 Feb 2010 @ 4:54am

Sort of a classic re-jigging of history to try to make it look like something it was not. In the end, the Greatful Dead did all of those things without giving their products away. Poor quality "approved" bootlegs were still no replacement for albums or real live shows. Effectively, they created a "make your own sample" tape, which wasn't enough to take away from their studio recorded products or live shows.

May I point out that Mettalica was famous for allowing their fans to record their shows, and would sell specific seats (often with power and everything provided) just for that purpose. Yet, we all know how they were later crucified for fighting against the scourge that was Napster.
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Modplan (profile), 15 Feb 2010 @ 5:03am

Re:
Poor quality "approved" bootlegs were still no replacement for albums or real live show

Nor are high quality recordings a threat to real live shows, and it seems allowing them to be created and distributed only allows easier creation of new fans who will eagerly await any opportunity to go to a live show, meaning you've just created more demand for a scarce product with one that is less scarce.

Even better if that less scarce product became non-scarce and could be infinitely copied and shared across the world, no?
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John Fenderson (profile), 15 Feb 2010 @ 6:07am

Re:
"Poor quality "approved" bootlegs were still no replacement for albums or real live shows."

Have you heard those "poor quality" bootlegs? 'Cause they aren't so poor. In fact, the Dead allowed you to plug directly into their sound board, so you could make tapes that were as good in quality as anything you could buy.

THe fact is that the article has it right. The Dead, instead of making their fans feel like the enemy, made them feel like family. And the fans supported the band like family, in a way and to an extent that most other bands can only fantasize about.

Negativland did a similar "connect with fans" thing, and their fans supported them so much that when the band faced obliteration because of that U2 lawsuit, the fans themselves directly financed the production of their next album.

Music is an intensely personal and emotional thing, people connect with it in a way that that is personal and emotional. The mainstream record labels make the mistake, and you hear it all the time in their rhetoric, of considering fans "consumers," when what the fans what to be is family. Bands that realize this, and treat their fans as family instead of consumers, have always been immensely rewarded by their fans. And always will be.
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Guy From V, 15 Feb 2010 @ 6:08am

Re: TAM
Nothing to do with the subject at hand but "Mettalica"? Oy vey.
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The Anti-Mike (profile), 15 Feb 2010 @ 6:26am

Re: Re: TAM
posted before morning coffee, sorry for the typo professor.
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Dirty Socks, 15 Feb 2010 @ 6:27am

Re:
"make it look like something it was not."

- Care to elaborate ? For example, what exactly was incorrect?

You simple minded and childish "no it's not" response is getting quite old.
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Fazookus, 15 Feb 2010 @ 7:23am

Profit
I suspect that some bands generated more profit than the Dead... profit that in most bands went mostly to their record label. So I suspect that profit as used in the article means the money that actual musicians received and in their case that included the roadies. The reason they didn't care about taping concerts (and some of those were really good quality, and they're still available on line) was that the tapes cost them record sales (maybe) but they made their money by touring, so it was a win win for them. Great article, never expected that the band would be so important sociologically and economically in today's world. On a personal note I learned of Garcia's death by way of the internet, the first such news about someone I cared about.
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Anonymous Coward, 15 Feb 2010 @ 7:30am

Re:
The tapes are not bootlegs if they are approved. Some of those tapers were at least semi-professional and there are some really great live recordings of the dead. What better way to remember your favorite live experience than with a tape that captures it all - for free?
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Anonymous Coward, 15 Feb 2010 @ 7:34am

Re: Re:
One more note here, the Dead was never know for its studio work. The live shows are far, far better than anything they did in the studio.
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susan boehlje, 15 Feb 2010 @ 7:51am

Dead as Early Onset Capitalists
Hard as I try it is hard to picture Garcia & Co. sitting around making hard-boiled business decisions such as described in the article. Ever occur to anyone that it was all instinct -- a desire to share, the gift of kindness to its audience, free concerts in the park, good vibes for all? Someone has discovered that this attitude translates to good business (nothing new, for example read Sir John Templeton). The golden rule will always make for success.
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lux (profile), 15 Feb 2010 @ 7:57am

1) They were hippies in the 60's in San Francisco.
2) They took a lot of LSD.

Connect with the fans? They _were_ the fans they were playing to.
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Anonymous Coward, 15 Feb 2010 @ 8:29am

@TAM
" Sort of a classic re-jigging of history to try to make it look like something it was not. In the end, the Greatful Dead did all of those things without giving their products away. Poor quality "approved" bootlegs were still no replacement for albums or real live shows. "

Actually all the "Live Shows" that I have that you insinuate are "Poor quality bootlegs" are actually recordings made from the mixing table and are properly mastered.
Example :
Grateful Dead
02/01/70
The Warehouse
New Orleans LA
Lineage: SBD>MSR>C>DAT>CD

SBD stands for Sound Board. Good Try.
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ant anti mike, 15 Feb 2010 @ 9:05am

driven that train hi on cocaine TAM you know
tam you know
trouble ahead , trouble behind
and you know that notion just crossed my miiiind

and you know that notion just crossed myyyyy miiind
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posible pirate, 15 Feb 2010 @ 9:46am

is this fair use?
Sooo speaking of which.. I have the Dead's "best of" collection on CD, given to me as a present. I don't really know what to do with these shiny round coasters that come in this plastic casket. I downloaded the MP3s thinking that..
1. Jerry would have wanted it that way, and
2. I think.. (I may be wrong).. have a right to listen to that music in any medium I see fit.

Am I correct in this assumption?
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t rex, 15 Feb 2010 @ 10:10am

Re:
You're showing your ignorance about the dead. Their shows were freely available for years on private and public site s(like the internet archive site) and included many CD quality recordings. Many recordings were made from connecting into the main soundboard at concerts and rivaled anything put out on the Dick's Picks label. Now they did pull these shows several years ago, in a disputed internal policy the band implemented, and I would be curious to see what effect pulling these readily available recordings had on the dead's cd sales.
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Anonymous Coward, 15 Feb 2010 @ 10:15am

Re: Dead as Early Onset Capitalists
Jerry and the band is on the record as stating that once they played the music, it didn't belong to them anymore, and people should be able to do what THEY wanted to with the music. To bad more record execs aren't dead heads, but the dead's run ins with their record labels are legendary.
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DJRazor (profile), 15 Feb 2010 @ 12:05pm

Most musicians now must "pay to play"
I know. I let them play my radio show and don't charge them. They are very "grateful".
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Robert Levine, 15 Feb 2010 @ 12:25pm

Dead right
>>>May I point out that Mettalica was famous for allowing their fans to record their shows, and would sell specific seats (often with power and everything provided) just for that purpose. Yet, we all know how they were later crucified for fighting against the scourge that was Napster.

This is true. Whatever you give, people always want more. The Dead allowed taping but very strictly enforced their rights when it came to merchandise and the commercial exploitation of their music. Many fans complained. So it goes.
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Mr Big Content, 15 Feb 2010 @ 12:34pm

Lasnick’s Maw
Sure, this sort of thing works for this hippie-type noise that passes for music. But would it work for artists trying to make REAL music?
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Derek Bredensteiner (profile), 15 Feb 2010 @ 12:59pm

"... it reflected a shrewd assessment that tape sharing would widen their audience, a ban would be unenforceable, and anyone inclined to tape a show would probably spend money elsewhere, such as on merchandise or tickets. "

If only a few more would take such a practical and objective view of their business decisions, perhaps there wouldn't be so much fodder for this blog. There are options aside from copyright maximalism and give it away and pray. Not even a middle ground; just sane, logical and profitable options.

I wish this subtle point received a little more focus a little more often.
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Chris Maresca (profile), 15 Feb 2010 @ 1:08pm

Re:
Re: poor quality recordings...

Not in my experience. DeadHeads were among the first to adopt portable digital recordings and many of those were later made available in FLAC format. And, even before digital, people would have portable reel-to-reel deck. As someone else pointed out, you could often plug into the soundboard, as close to a first-generation source as you could ever get for a live recording.

So, between FLAC, MiniDisc, DAT and other high-quality portable recording gear, Grateful Dead tapes were among the best live recordings out there, often better than official live recordings from other bands.

OTOH, what it did do is create a rabid fan base and was a strategy followed by other Dead-tribute bands like Phish.
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Chris Maresca (profile), 15 Feb 2010 @ 1:12pm

Re: Lasnickâ��s Maw
You mean like Beethoven? http://en.wikipedia.org/wiki/Beethoven#Patronage
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Anonymous Coward, 15 Feb 2010 @ 3:42pm

If (someone) only had a brain...
@TAM: Please continue to expound upon things you know nothing about. "Poor quality recordings" huh? Please read the above. I'd love to see you try and spin this one. Oh I meant the ones I heard about second hand? LOL. You're actually starting to become entertaining.
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Alan Gerow (profile), 15 Feb 2010 @ 7:09pm

Re: is this fair use?
While the Dead support the bootleg community, they do not support the copying of their studio releases.
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posible pirate, 15 Feb 2010 @ 9:11pm

Re: Re: is this fair use?
well, I would love to ask them how they feel about this. Buuut the first point was really just saying, most people would think that obtaining the MP3s of a CD you own is not "copying" in the same sense as just downloading something that you want. I mean.. if the industry is taking that stance.. they've certainly crossed the line from "protecting their rights" and have entered the "legal extortion" arena. IMHO
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susan boehlje, 16 Feb 2010 @ 6:23am

Re: Lasnik's Maw
Dear Sir: Your content ain't so big. Phil Lesh was a brilliant classically trained musician. Jerry is considered the 13th greatest guitarist of all time, as well as a poetic lyricist and visual artist. Other band members were and are the best of the best. Northern California in those days was a free-spirited place where creativity flourished (in lots more ways than the music scene). Individuality of expression, as well as social consciousness, is the hallmark of art.
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susan boehlje, 16 Feb 2010 @ 6:24am

Re: Lasnik's Maw
Dear Sir: Your content ain't so big. Phil Lesh was a brilliant classically trained musician. Jerry is considered the 13th greatest guitarist of all time, as well as a poetic lyricist and visual artist. Other band members were and are the best of the best. Northern California in those days was a free-spirited place where creativity flourished (in lots more ways than the music scene). Individuality of expression, as well as social consciousness, is the hallmark of art.
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LostSailor (profile), 16 Feb 2010 @ 2:37pm

Re: Dead right
Some people complained, but most fans did not. The taping community in particular aggressively policed its own ranks for anyone who was trading official album releases or who was trying to sell audience-made concert tapes. The most anyone might have been allowed to get away with was charging for the cost of the blank cassettes (or other media) and postage. But the rule generally was, if you wanted a show, you send blank tapes with a return mailer--no money changing hands.
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bdhoro (profile), 5 Jan 2011 @ 8:13am

Not just a band
The Grateful Dead can't just be talked about as a band - they were an American Revolution. The Grateful Dead represented an entire social movement in America at a time when all the supposedly great artists were all into the British scene.

Their concerts weren't unique just because they played their songs differently every time making new jams during each set - the fans and the environment they created was the actual highlight of the concerts and the band knew that and developed it.

Its quite evident in "The Grateful Dead Movie," the concert movie produced by Jerry recorded from about 3 different concerts. Watching the film is great because you don't just get the experience of watching the band play on stage, because they had camera men all over the venue, just talking to fans, watching them dance, and doing all the things a fan would do at the concert - like sitting outside in line for tickets and going to the concession stand.

All that was the beauty of the dead - they didn't just play music, they created an entire social environment based on following them around the country, making their dedicated fans feel like they're part of a movement.
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