(Credit:
Doigy Media)
For those who have yet to grok the Open Core business model, Trent Reznor of Nine Inch Nails fame will sing it to you. In a series of forum entries, Reznor explains exactly how to build a music business on the Web and, in the process, classically defines Open Core, the primary business model for open-source software, too.
Forget thinking you are going to make any real money from record sales. Make your record cheaply (but great) and GIVE IT AWAY. As an artist you want as many people as possible to hear your work. Word of mouth is the only true marketing that matters. To clarify:
Parter with a TopSpin or similar or build your own Web site, but what you NEED to do is this--give your music away as high-quality DRM-free MP3s. Collect people's e-mail info in exchange (which means having the infrastructure to do so) and start building your database of potential customers.
Then, offer a variety of premium packages for sale and make them limited editions/scarce goods. Base the price and amount available on what you think you can sell. Make the packages special--make them by hand, sign them, make them unique, make them something YOU would want to have as a fan. Make a premium download available that includes high-resolution versions (for sale at a reasonable price) and include the download as something immediately available with any physical purchase. Sell T-shirts. Sell buttons, posters...whatever.
Having trouble following that? Well, the excellent TechDirt simplifies it:
Connect with Fans (CwF) + Reason to Buy (RtB) = The Business Model
In the software world, "Connect with Fans" is the community download. It's the software made freely available for anyone to download, tinker with, and share (if they wish). As noted in a recent MindTouch post, word of mouth is an open-source project's best friend, and word of mouth depends upon giving people something to talk about.
Unfettered discussion. Highly usable code. These are the key ingredients to driving word of mouth.
As for Reznor's "Reason to Buy," that is the enterprise version. Importantly, it's not really about lock-in so much as it is about (temporary) lock-out: Open Core, just as with Red Hat's licensing model, isn't about forcing customers to stay so much as giving a convenient, compelling reason to buy. Once the customer is in the door, every open-source company I know makes it easy to leave and depends upon a subscription offering that forces the vendor to deliver continuous value to earn the customer's loyalty.
Community is for the geeks: it's all about code, code that average consumers could not possibly care any less about ("I thought that obsessing about an OS in 1993 was depressing; why are we still doing it in 2009?").
Enterprise is for users who just want to get on with their day, and want software to be part of that day without consuming the day.
You need both but, as Reznor accurately describes, you must have a compelling reason to buy. Charitable urges don't count.
Trent Reznor of Nine Inch Nails (NIN) has been blazing trails in the music industry, but apparently he wants to take it one step further. Where, however, is not yet clear.
In fact, that may be the point to a step taken recently by the band. In an e-mail sent out to fans, Reznor asked his fans to fill out a survey to help NIN better serve the fans:
As we've moved from the familiar world of record labels and BS into the unknown world of doing everything yourself, we've realized it would benefit us and our ability to interact with you if we knew more about what you want, what you like, what you look like naked, etc. I know it's a pain...but we'd truly appreciate it if you'd take a minute and help us out.
As an incentive, everyone who completes the survey will be able to download a video of live performance from this most recent tour (and I know what's going through your little minds right now: "I'll just grab this off a torrent site and not have to fill out the survey!!!" and guess what? You will be able to do just that and BEAT THE SYSTEM!!!! NIN=pwn3d!!!)
BUT What if we were to select some of those that DO complete the survey and provide them with something really cool? I'm not saying we'll ever get around to it, but if we did maybe something like signed stuff, flying someone to a show somewhere in the world, a magic amulet that makes you invisible, a date with Jeordie White..., you know - something cool. See, you'd miss that opportunity AND be a cheater. Do the right thing - help us out. You'll feel better.
Thank you and I've had too much caffeine this morning, Trent
The survey is remarkably candid about how NIN fans find and purchase (or don't) NIN's music, and is clearly probing for ways for NIN to fit into its fans' world rather than ways to force the fans into the traditional music industry's models for revenue generation.
How refreshing. While I doubt most open-source software companies would get away with a line like, "If you buy the Enterprise version instead of using the Community version, we might give you something cool like an invisibility cloak," I like the idea of figuring out what your "fans" want and trying to fit into those expectations. Force-feeding the old world probably won't work.
Trent Reznor, brainchild behind Nine Inch Nails, sure knows how to bring an audience down. In a recent concert Reznor, apparently trying to capture the pain of modern life, let the Blue Screen of Death flash across the screen:
Somehow, that image leaves me much more depressed than NIN's classic song, "Terrible Lie":
seems like salvation come only in our dreams.
i feel my hatred grow all the more extreme....
can this world really be as sad as it seems?
Apparently, the answer from Microsoft is "Yes." :-)
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