Video Killed the Radio Star, But Free Isn't Killing the Rock Star

Back in October, the music group Radiohead released a new 10-song album that fans could download for free. Now the group 9 Inch Nails is doing the same thing.

According to NME News, for Radiohead, fans were given a set of choices, including, for £40 the CD, a pair of old-fashined vinyl records, photographs and liner notes, and a second CD containing 8 more new songs, all in a beautiful box.

NME now reports that 9 Inch Nails, led by rock star Trent Reznor, has a similar strategy:

The 36-track instrumental record, recorded in a ten-week period last year, is available in a variety of download options and as a physical copy.

Nine Inch Nails fans have even more options than Radioheadâ''s. They include

a free download featuring the collection's first nine tracks, a $5 download featuring the whole album, a $10 two-CD set (either via the website or in shops from April 5) and a $75 deluxe edition, including a hardcover book and a data DVD and a Blu-ray disc featuring high definition recordings and a slide show.

There is also an â''ultra deluxeâ'' limited edition version for £300 which features the same items as the $75 version, but also signed and numbered by Trent Reznor himself.

The strategy of offering something for free in order to make more money from may have been scary when it first started, but we have quite a bit of experience now that says it works. Back in 2002, I asked the question, â''Does file-sharing of copyrighted material harm sales today?â''

The movie, music, and book trade associations say it does. But for each form of entertainment, a growing body of evidence suggests otherwiseâ''and not all of the evidence is anecdotal. In an April 2002 study of about 3000 individuals, research firm Jupiter Media Metrix Inc. (New York City) found that â''experienced file-sharers are more likely to actually increase the amount of money they spend on CDs.â'' Thirty-four percent said they spent more than before on music, twice as many as said they spent less (15 percent).

Even back then, I found plenty of examples from the movie and book industries that argued for the same case. And even earlier, in October 2001, I argued that complicated digital rights management schemes might be self-defeating, inhibiting sales to such an extent that companies would make more money by letting music go free, especially if other sources of revenueâ''concert tickets, memorabilia, perhaps even a tax on blank mediaâ''could be found.

Certainly the most successful digital rights management systemâ''the FairPlay system used in Appleâ''s iTunesâ''places the lightest burden on consumers. Once you buy your songs, you can burn them them to a CD and then convert the files to MP3s(I use Switch Plus ). The resulting files can be copied anywhere, anytime, with no further ado.

As simple as that process is, Steve Jobs proposed last year to do away with DRM entirely.

Radiohead and 9 Inch Nails are doing just what seemed, even back in 2001, to make the most sense. Theyâ''re giving up the façade of DRM and finding alternative ways to make money off their music, including these elegant boxed sets, high-definition videos, detailed lyrics and liner notes, and more. In fact, the £300 limited edition has already sold out its run of 2500. Doing the math, thatâ''s a quick $1.5 million. They will, of course, make another fortune off the tours associated with the new music.

Not every music group has as much name recognition and marketing muscle as these two. Not every group will succeed with quite the same strategy. But the old strategies are faltering, and musical groups, and eventually movie studios and book publishers, will need new ones. For the next few years at least, theyâ''ll have to be as creative as the acts, actors, and authors theyâ''re selling.

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