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"Tribes" and the "Seinfeld Curve". Seth Godin put it better than I could.

I am in love with this speech Seth Godin gave.  These excerpts explain beautifully WHY the NIN model works, and in short order.

Important to keep a dialogue:

…The next one is my biggest one, and what started me 
down this whole path which is, if I asked you for the 
name and address of your 50,000 best customers, 
could you give it to me? Do you have any clue? Then 
what happens every day is you guys go to a singles bar 
and you walk up to the first person you meet and 
propose marriage and if that person won’t marry you, 
you walk down the singles bar to every single person 
until someone says I do. Thats a stupid way to get 
married. A better way to get married is to go on a date. 
If it goes well, go on another date. Wait to tell them 
on the third before you tell them you’re out on parole. 
(laughter) Then you meet their parents, they me your 
parents, you get engage, you get married. Permission is 
the act of delivery. Anticipated, personal, and relevant 
messages to people who want to get them. I have every 
record Ricky Lee Jones has ever made including the 
boot legs that she sells. Rick Lee Jones should know 
who I am! (laughter) I have bought many of them 
(pause) well her agents, her people [should know who 
I am]. I’ve bought many of them directly from her site. 
I desperately want Ricky Lee to drop me a note telling 
me when she is going to be in town. I want her to ask 
me, “should I do a duets album with Willie Nelson, or 
should I do one with Bruce Springsteen?”. I want to 
have these interactions. And I want her to say, “I’m 
making another bootleg, but not until I get 10,000
people to buy it as patrons before I make it”. Because 
I’d sign up. I’d buy five if it would help, but she doesn’t 
know who I am. She doesn’t know who I am, she 
never talks to me. And then every once in a while her 
record label tries to yell at me, but I’m not listening 
because they’re yelling at me in a place where I’m not 
paying attention. And so we look at these phrases, 
“paying attention”. That’s what you’ve wanted people 
to do all along. “Pay attention to this artist”. Paying is 
a weird word isn’t it? You want me to pay you 
something-my attention. And if you’re wrong, I get 
nothing back. I had to listen to the Backstreet 
Boys…AHH! I want those three minutes back. So, it’s 
a weird relationship. 

 The “tribal” concept of fanbases: 

The next idea is this idea of liking. There is a lot of music I like. There is not so much music I love. They didn’t call the show, “I Like Lucy”, they called it “I Love Lucy”. And the reason is you only talk about stuff you love, you only spread stuff you love. You find a band you really love, you’re forcing the CD on other people, “you gotta hear this!”. We gotta stop making music people like. There is an infinite amount of music people like. No one will ever go out of the way to hear, to pay for, music they like…back to this tribal thing. It’s really important to people to feel like they are part of that tribe, to feel that adrenaline. We are willing to pay money, we’re willing to go through huge hoops, trampled to death in Cincinnati if necessary, in order to be in the environment where we feel that’s going on.  

Then “The Seinfeld Curve” 

The next thing is what I call the Seinfeld curve. The 
Seinfeld curve shows us Jerry’s life. If you like Jerry 
Seinfeld you can watch him on television, for free, in 
any city in the world two or three times a day. Or, you 
could pay $200 to go see him in Vegas. But there is no 
$4 option for Jerry Seinfeld. This is death. You can’t 
make any money in here. Because if you’re not scarce 
I’m not going to pay for it because I can get if for free. 
And one of the realities that the music industry is 
going to have to accept is this curve now exists for you. 
That for everybody under eighteen years old, it’s either 
free or it’s something I really want and I’m willing to 
pay for it. There is nothing in the center-it’s going 
away really fast.  

Take these concepts together and its obvious why the NIN model works.  Create choice, cater to those who love you, enable the tribe to continue engagement throughout by creating and mixing your music.  In the end, win them as lifelong subscribers who are apt to come back and check out what’s next…