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The infrequently updated space of Jordan Garbis, founder of Haystack Media and digital strategist living in NYC. Jordan's reachable by tweet or by email (jgarbis at gmail dot com).



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    Mar
    10
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  1. Music Valuation 101: NIN creates users out of fans

    Music business listen up: Build value and your customers will take the bait. Trent Reznor has just opened a new era in his band’s history.

    When Trent Reznor became a free agent, breaking free from his multi-album deal with Interscope, many in the industry waited breathlessly for him to make his next move.  After his experiment with Saul Williams yielded mixed results, his project, Ghosts I-IV landed.  

    The project marks a departure from Reznor’s more poppy past, as this “album” is purely instrumental.   

    The latest project has been a success by several measures:

    1. Tiered offering by market segment. With fewer splits of the revenue Reznor has made his project successful by pricing it realistically for the market. 

    • New fans and casual listeners: Get tracks 1-9 or “Ghosts I” for free.
    • Older fans and converts: $5 for 320kbps high quality download.
    • Old school fans with no money: $10 full CD set
    • Collectors and hardcore fans: $75 box set in fabric slipcover
    • Hardcore collectors: $300 ultra-deluxe limited edition

    2. Creative commons license: Reznor emblazoned his IP with a Creative Commons license. His reasoning?  What’s the value of music? Nada.  Can you CREATE value by giving your users something valuable? Yes.


    3. Reznor has made fans into users. This is not the first time he’s done this.  He came out with a remix project even when he was with Interscope.  As I’ve argued before the value of music is now ZERO, zip.  Supply is nearly unlimited while demand remains constant.  Anyone who’s ever taken an econ class will recognize that that means that value of music is approaching zero.  So how do you monetize?  The combination of 1 and 2 above means you’re hitting the consumer AND the prosumer.  The consumer is interested in individuality and self expression for his own personal ego.  The prosumer is interested for professional gain, even if the CC license does not allow him or her to profit directly off a commercial release.  They’re going to blog their remixes, send to friends and other bloggers, and flood the market with free music that is an expression of their own artistry.  Much like a website, NIN fans are now users. UPDATE: NIN has sold out of the $300 limited edition package in only 3 days.  


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