An update to yesterday's post: the $300 deluxe box set is sold out, according to the Nine Inch Nails Web site. The band made only 2,500 copies of the deluxe set, which means that they've already grossed $750,000. In preorders. In less than a day. That should be more than enough to cover the cost of manufacturing this set, and probably the initial runs of the lower-priced physical sets as well, plus recording costs (a high-budget major-label release might cost $100,000 to record). And since NIN is no longer on a label, every dollar of Ghosts sales from now on goes into the band's pocket.
Of course, not every artist is NIN, with a 15+-year career and a core of extremely devoted fans, but any artist with similar credentials in an unhappy recording contract will certainly be considering whether to follow Trent's lead.
Nine Inch Nails' surprise release of Ghosts I-IV today in five differently priced formats is the perfect example of how recorded music can, should, and inevitably will be sold in a world where free has become the norm.
Would you pay $300 for this? Depends on how big a fan you are.
(Credit: Nine Inch Nails)I suggested several business models for recorded music in my post the other day, which was a response to Chris Anderson's Wired article about "free" as the future of business. Ghosts employs at least two of them.
First and foremost, it's a great example of the "freemium" model, in which the hardcore NIN fans subsidize the cheaper offerings--the highest-priced $300 edition is personally signed by Trent Reznor and includes the regular CDs, a data DVD with the entire album in .wav files, a Blu-ray DVD with a high-definition (24-bit, 96kHz) version and slideshow, four vinyl LPs, and more.
Implicitly, NIN is also using the cross-subsidy model. All the offerings include non-DRM-protected data files, and some even include lossless files, which offer the same quality as a CD. Trent Reznor isn't dumb--he knows that somebody will post these files online within seconds of receiving them. In fact, the band has even posted the first nine tracks (the free MP3 versions) to several BitTorrent trackers. But he hopes that casual listeners or one-time fans who haven't checked out NIN's recent work will be sufficiently attracted by these free files to check the band out when it comes through town, and may eventually become big enough fans to pay for future releases.
It looks foolproof to me. NIN minimizes the risk of unsold physical inventory by taking advance orders, and with downloads, there's almost no incremental cost of distribution. The only potential problem would be if the band doesn't sell enough to cover the cost of recording the album, which seems unlikely. Any label lucky enough to have an artist with a devoted following and decent live show should be paying attention--although they might find that selling a two-CD set for $10 makes it hard to pay for the upkeep on those private jets.
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