Thanks to a tweet from @grantyoung I found a video of Michael Masnick’s (Floor64/Techdirt) “How Trent Reznor and NiN Represent the Future of the Music Business” case study from midem09.

The presentation looks at Trent Reznor’s business methods while with a major record label as well as once he struck out on his own – experimental actions that have generated awareness of Nine Inch Nails, made fans happy and have encouraged sales of his music. This is an area in which a lot of labels and bands have struggled recently, and with my personal passion for music, I was interested to see a view point on where music is headed.

Core ideas behind Michael Masnick’s presentation revolve around CwF (Connect with Fans) and RtB (Reason to Buy):

CwF + RtB = $$$$

Reznor’s CwF examples include:

• certain characters were highlighted on the back of tour t-shirts that had to be put together to figure out a URL for a special web site.
• USB keys loaded up with new music were left on the floors of venues. This music was then shared out by fans.
• music was given away for free and encouraged to be remixed.
• sampler packages of songs by opening bands on NiN tours were compiled and shared through the web site.
• less obvious items were added to the web site such as:
  • aggregated photos from flickr and videos from youtube
  • wallpapers and images were provided under a creative commons license
  • remixing of songs was encouraged to involve people in the music
  • contests were held such as hiding tickets on the forums or physically planting free tickets at particular geo co-ordinates for people to find
  • email sent to fans made Trent Reznor seem human

Reznor’s RtB examples include:

• physical CDs were sold that changed colour due to the rise in temperature when they were played in CD players – although the songs were also available for free, fans wanted the actual CDs because they couldn’t duplicate the functionality themselves.
• CDs gave access to added benefits such as free downloads.
• options were provided to fans – multiple editions of albums were released such as a deluxe edition package with DVD, Bluray disc and booklet, and an ultra deluxe edition with a limited print of 2,500 which were personally signed by Trent Reznor – people could choose the level of interest and pay (or take freely) as they chose.

Some key points from the presentation:

• the date of release of free albums was timed to coincide with concert date announcements.
• the $300 ultra deluxe edition sold out of 2,500 copies in less than 30 hours which means that people paid $750,000 for music that they also could have accessed for free.
• price is not the issue as long as you can connect with fans.
• you have to connect with fans all the time and experiment constantly.
• the acronyms can also be considered as CwF (Compete with Free) and RtB (Return to Business, rather than complain about pirates and new technology).
• you don’t need collective licensing, DRM, lawsuits, copyright.
• giving people Reason to Buy can make it work for fans and musicians.
• other bands can make this same formula work: CtW + RtB = $$$$

I personally think it can be a challenge for a band or musician to break through the noise but persistence, passion and an open nature can make you much more appealing for fans to hold on to.. quality of music of course provides a significant helping hand. Although I don’t want to be in a direct line of communication with my favourite bands (perhaps in the same way I’ve never wanted to line up to get an autograph from anyone famous), having the chance to hear work-in-progress material, see candid photos, or read about how a recording session is going makes me feel more involved and more interested in the end product.

Check out Michael Masnick’s presentation at YouTube.