nin kicks the arse off the music industry

Nine Inch Nails - Ghosts I-IV

If you're reading my blog, it's kind of unlikely that you don't already know about Ghosts I-IV. For those few who don't know what I mean, check this out: Ghosts - Order Options.

Basically, it's Nine Inch Nails' latest album in a range of options from free download to deluxe madness:

  • First off, note that there's a "listen" option on the site which lets you listen to a random selection of full tracks before you download or buy anything.
  • The first nine tracks (out of 36) are available for free download in a choice of formats.
    • That's free as in beer, totally free, non-DRM, high-quality, free.
    • You don't have to provide anything more than an email address, which is only required so they can email your download token. Compare this with Radiohead, who - so I heard - had to ask for a credit card even if you weren't paying them anything for In Rainbows.
    • When downloads exceeded expectations (and they planned for pretty big traffic) the free package was officially uploaded to torrent sites.
  • For $5 you can download the whole 36 tracks. The download includes a PDF of artwork and a bunch of wallpapers.
  • For $10 you can download the whole lot, AND get a double CD shipped to you.
  • For $75 you can download the whole lot, AND get a special pack with dual CD, data DVD in multi-track (as in, you can remix to your heart's content), and a Blu-ray disc with super high quality copy of the tracks.
  • For $300 you can get a limited (2500 copies made) "ultra deluxe" version including vinyl and all kinds of niceties.

Well actually you can't buy the $300 version any more since all 2500 sold out within 48 hours... and that's where this gets really interesting.

set up a safety net, break even.

If my calculations are anywhere near the reality; the ultra deluxe edition was like a safety net. It was unlikely that the NIN fanbase didn't include 2500 people with the money and inclination to pay $300. It was also likely that there were many many more who'd wish they could afford the $300 option and would shell out $75 instead. Still more would buy the $10 option and so on.

Based on the ultra-deluxe edition it's quite obvious this project has already brought in at least US$750,000 revenue. I'm pretty sure the only promotion was a couple of cryptic blog posts, ie. it was free. There is no overhead from record company contracts or promotions; no distribution deals to be made.

Production and manufacturing costs are subject to a whole lot of speculation. We know it cost something, probably at least $100,000 to produce the album. This is an extremely rough figure I've seen in a few discussions. I'm no expert but 100k seems to be a reasonable ballpark figure, so I'm going to run with it (please feel free to comment if you have a better idea what Ghosts I-IV actually cost). Keep in mind Trent Reznor ran his own label for a while, surely he knows how to get a record together without blowing costs out. Particularly when the whole thing came together in ten weeks (or less).

The deluxe edition will probably cost a lot to put together too, so it's not like the $750,000 was all profit. Even if it only makes $50 profit per unit that's still $125,000 profit all up, just from the ultra deluxe edition. I reckon it's pretty safe to guess that the ultra deluxe edition probably broke even for the project (or came near it). Which means that every other sale is basically profit (less manufacturing and bandwidth costs).

Not bad for a release which goes completely against the music industry's methods, which in their book should mean it would be an abject failure. The record industry basically hates fans and would never release such an awesome lineup of purchase options. To really top it off, can you imagine any record company legitimising bittorrent by using it to distribute an official release? Their heads would explode.

give stuff away, make money.

The free download means several things:

  • Old fans who didn't like newer releases can give it a shot, see if they like the new stuff.
  • Potential fans can give them a try; since people who don't usually go for NIN might grab a copy anyway.
  • It's only the first volume that's free. Reznor's not giving away the shop.
  • It gives people a legitimate way to preview the album, as opposed to pirating the whole lot. At which point, what the hell, you've already got it. This way, people are guided towards doing the right thing (paying for it) even if it's only $5 for a full download.

Why wouldn't you give a sample away? The music was already produced; the bandwidth costs will be covered by sales. Just like sales cover for piracy.

add value, make money.

You can pirate any CD on the market from the day it's released. Hell, thanks to preview copies getting loose you can often pirate an album before you can buy it.

But you cannot download hardcover fabric slipcases; you don't get multi-track data from CDs; you sure as hell don't get blu-ray. You really can't download vinyl, limited edition Giclée prints; nor can you download a copy individually numbered and signed by Trent Reznor.

If downloads are killing your profit, sell something more than downloads can provide. Don't try to stop the downloads - you can't.

encourage fandom, gain/keep fans.

I think the core of Ghosts I-IV's success is that it's a music release for the fans. It gives them what they want.

Fans want the latest album right now. No matter what. Then they want it on their iPod; with some nice cover art. All of these options provide immediacy, as well as whatever physical media option you went for.

But it doesn't stop there...

The download includes a whole set of wallpapers, including massive widescreen options. So computers across the world will be sporting NIN wallpapers. Beyond that, there's a "web graphics" directory full of avatars, logos and banners. Want to review the album? Here's a nice, bloggable image. Want to use a NIN graphic as your avatar on LiveJournal/MySpace/FaceBook/some forum? Here's six to choose from.

This album makes it easy to be a fan. Which is another way to say this album makes it really easy to take part in viral marketing... :) My problem was choosing which image to use on this post, not whether I was going to use an image.

I probably wouldn't bother seeking out wallpapers either, but since they're right there... what the hell, I have them in my wallpaper rotation.

so what did i get?

I went for the $10 CD option - partly because I don't have a Blu-ray player and partly because there wasn't an option between $10 and $75. Shipping will be $13, I guess because I'm outside the US. The last NIN album I bought set me back $20 for a single disc, but you know what? I don't really care that this cost me $3 more. I already have 36 tracks of beautifully tagged MP3 goodness, complete with artwork. Later I'll get a CD in the mail, which I add to my collection (I still like physical CDs). I didn't have to fart around ripping anything, or finding a scan of the cover, or any crap like that. I certainly wouldn't have put a different bit of artwork on each track - a nice little detail.

In short, I'm a happy fan.


Anonymous Anonymous  

March 11, 2008 11:39 pm

I'm one of those people who paid zero for In Rainbows and when I went through the checkout no credit card details were required.

I did it as a test. I felt a bit guilty afterwards which is weird cos I never paid for any of their other albums. I did pay for 2 tickets to see them though. Blimey, I even type guilty...

Blogger 200ok  

March 12, 2008 12:17 am

Hmm, guess I have bad information! I just recall some guys in a podcast discussing it, guess it didn't happen in the end.

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