[15 May 2008]
Forget “pay what you want.” The new model for the music industry may be “pay it forward.”
Coldplay has become the latest band to discover that giving away your music - even a little bit for a little time - may, in the long run, end up being worth more than the conventional model of only selling it.
|GIVING A LITTLE TO GET SOME SALES While up-and-coming artists have been giving away their music to get attention for years, it’s becoming an increasingly common strategy for veteran acts these days: RADIOHEAD. The band broke ground last year with its “pay what you want” model - which, in many cases, turned out to be nothing - for its “In Rainbows” album. Even though the album was available for free online, when it was released on CD for sale, it still debuted at No. 1. NINE INCH NAILS. Trent Reznor offered a limited version of his experimental double album of instrumentals “Ghosts” for free and then more elaborate versions for increasingly higher prices - up to a $300 package that included special artwork and packaging. Though it wasn’t his most commercial work, his distribution model still turned it into a financial hit. He was so pleased by the results, he released the band’s new album, “The Slip,” for free last week. PRINCE. Though it’s kind of old-fashioned - and behind the scenes he still got paid, because, heaven knows, The Purple One always gets paid these days - Prince gave away his “Planet Earth” CD last year in England with copies of The Mail on Sunday newspaper. All the hoo-haw helped him publicize his 21-concert run in England, as well as the CD’s release around the rest of the world. PENNYWISE. The veteran punk band offered its album “Reason to Believe” as a free download for two weeks last month before its release through MySpace, which also released the album in the United States. The extra attention, not to mention new fans, has turned the band’s single “The Western World” into its biggest hit ever, resulting in strong continuing sales for the album.|
To drum up publicity for its new single, “Violet Hill,” which was released last week, the band decided to give it away for a week on its Web site as a free download. On the first day it was available, the song was downloaded more than 600,000 times, according to Billboard magazine. In 2005, “Speed of Sound,” the lead single from Coldplay’s previous album, “X&Y,” sold about 53,000 copies digitally in the United States and the United Kingdom in its first week of release and that was with a marketing campaign and far more anticipation following the breakthrough of their Grammy-winning smash album, “A Rush of Blood to the Head.”
Hitwise, the Internet traffic-measuring company, said traffic to the Coldplay Web site jumped 1,800 percent the day of the release over its traffic two days earlier. It moved from No. 305 to No. 1 on the company’s chart of musician Web sites, with more than 2.5 percent of all the U.S. traffic to the sites they monitor.
And people didn’t just download “Violet Hill.” They played it. A lot.
According to the music social network last.fm, “Violet Hill” set a record among its 15 million members, who played the track about 33,000 times the first day, or once every two seconds.
So let’s recap. Spending a fraction of what it normally would to market a new single from a new album, Coldplay landed tons of positive media attention, let people know they have a new single and a new album - “Viva la Vida or Death and All His Friends” - coming, got people to listen to the new single and generated lots of goodwill among its fans, while possibly minting new ones.
Sounds like a pretty good deal, right?
“While publishers become increasingly concerned about the cannibalization of their revenue stream, experiments by Coldplay and Radiohead, at a minimum, prove that free music downloads provide added publicity to increase awareness for album releases,” said Bill Tancer, Hitwise’s general manager of global research.
In other words, the “pay-it-forward” model actually works.
Wired editor Chris Anderson recently wrote about the rise in “freeconomics” in his magazine, and it will be the topic of his next book, due out next year. “Once a marketing gimmick, free has emerged as a full-fledged economy,” he writes. “Offering free music proved successful for Radiohead, Trent Reznor of Nine Inch Nails, and a swarm of other bands on MySpace that grasped the audience-building merits of zero.”
After all, the long-term success of any band depends on its relationship with its fans. (“Thank you for your continued and loyal support over the years - this one’s on me,” Reznor told fans on his Web site last week when he made the new Nine Inch Nails album “The Slip” available for free download.)
Record companies mainly concern themselves with making as much money as they can in the short-term, since the profit splits on the contracts are more favorable for them at that point. Artists, on the other hand, generally don’t start making serious money until after they have fulfilled their first contract and sign another where they get a higher percentage of the profits and get more control over their careers.
That means record companies have less financial incentive to support a veteran band on its fourth album than a brand-new act and its debut, so they haven’t been very interested in strategies that help bands develop long-term relationships. However, as that way of thinking crumbles - thanks to the iTunes-aided ability of fans to buy only the hits they want instead of a whole album that may have only one good song - something else has to replace it.
The “pay-it-forward” model will survive only if artists commit to strengthening their relationship to fans with free music and fans commit to supporting their favorite artists financially by buying their albums, going to their shows and buying their T-shirts and other merchandise.
Sure, it sounds crazy. But a business model built on mutual respect between artists and fans may just be crazy enough to work. After all, sticking with the currently faltering business model would be even crazier.