Facing the fact that four in five are freeloaders
Jim Carroll
Trent Reznor has decided to tell all about his recent engagement with a new music business model and it’s not pretty.
The Nine Inch Nails frontman produced Saul Williams’s The Inevitable Rise and Liberation of Niggy Tardust album. When it was released last November, listeners had the option to download it for free or to pay $5 for higher-quality MP3s.
Reznor and Williams thought that fans would shell out the token $5 to support the artist, but they were in for a rude awakening. While Williams’s self-titled 2004 album sold 33,897 copies worldwide, only 28,322 of the 154,449 people who downloaded Niggy Tardust – just 18 per cent of the total – put their hands in their pocket this time around.
“I thought if you offered the whole record free at reasonable quality – no strings attached – and offered a hassle-free way to show support that clearly goes straight to the artists who made it at an unquestionably low price, people would do the right thing,” Reznor said.
But this was not to be. While Reznor argues that more people now have Williams’s music than ever before and may well go to see him when he tours, the fact that fewer than one in five downloaders were willing to pay $5 a pop means a shortfall for the artist when costs are taken into account.
Reznor describes the outcome as “disheartening” and the figures may explain why Radiohead, the other high-profile proponents of the tip-jar business model, are keeping quiet about the facts and figures from their recent In Rainbows release experiment.
Yet the record business is very keen to point to the increased number of people now paying for downloads. The BPI reported that there were 77 million downloads sales in 2007 in Britain – a 50 per cent increase on 2006′s figures. Yet album sales are falling year on year: the 138.1 million sales in Britain in 2007 represented a drop of nearly 11 per cent on the previous year.
And as Reznor and Williams discovered, the revenue from downloads is certainly not enough to offset the costs involved in recording the album in the first place. The probable solution? You mean you have to ask? Expect a big bump in ticket prices for the live show.
…and there was me thinking it was silly of them to release a version of the album for nothing considering how long there was 128kbps files being shared on napster (etc…)
but when it is available for free, why is he surprised that so few paid for it?
Leigh – I think it’s hillarious to see a big ol’ rock star like Mr Reznor “disheartened” by this. It shows quite dramatically just how out of touch he is with how consumers approach free downloads, something which will surprise a lot of his fans.
I’d say there were a lot of “tasters” in those 154,449 downloads — just dl’ing to give it a listen, and possibly delete it if they didn’t like it.
I’d also guess that the Radiohead situation might be different — a band recording another album using their well-established sound, for the existing fanbase. Different kettle o’ fish.
Justin – totally agree with u there. The Radiohead reference, though, refered to the money which fans spent to get their hands on the album. Thousands – a million? – downloaded it but we’ve no idea how much anyone paid. I’ve no problems with the band keeping this info to themselves at all – it’s their project.
Reznor also pointed out that on his insistence they had more production overheads then necessary, suggesting they could have possibly broken even if they had been realistic about production costs.
I’m a fan of the album and must admit I am one of the 154,449 who took it for free.
I would now pay to see him play and hey, may even buy a t-shirt.
If we take the traditional model of label expenditure recouped from an album, on average how many units need to be sold before the band makes money?
Did Saul Williams make money from the 33,000 and change copies of his first album?
I’m sure he is happy to take a fatter cut from a sucker like me who’ll buy the concert tickets and t-shirts and plug the free availability of his new album.
PS Thank you for turning my comment about good news hiding in plain sight into a fully fledged blog.
Didn’t Thom Yorke in a recent interview suggest that the figures projected by those in the know were way off and that they actually made money? I can’t remember the exact interview but I think it might have been the one with David Byrne. And I think he recently told another magazine how many people paid the full head-examining £99.99.
It’s a pity that Saul Williams’ ticket prices will have to rise – he’s brilliant live and the tickets weren’t all that expensive the last few times he’s played in Dublin. Anyway, surely it would make more sense to flog the album at $5 a pop to everyone. Any way you look at it, it makes better sense.
Markg – thanks for the pointer in the first place! I happily paid a fiver for Niggy Tardust because I like Williams and I’d probably have paid at least $5 via eMusic. What gets me is Reznor’s reaction – i mean, doh. Yes, of course, it wil translate into a bump (of sorts) for Williams when he tours but surely Reznor realised that was the purpose in the first place? I think it’s interesting that he cites recording and studio costs as something which could have been cut – he’s still operating with a major label head on him.
neilo -When those made-up figures first emerged, I said the same thing. Only the BAND and their MANAGEMENT know the real story on who paid what for “In Rainbows”. As for selling the album at $5 a pop to everyone, that makes sense to me but it would have probably have put off the casual downloaders which Justin refers to in comment # 3
Old Abe Lincoln had something to say about Radiohead and Trent Raznor… Better to remain silent and be thought a fool than to speak out and remove all doubt.
How is it that a musician should provide music for free so that they can sell t-shirts. If anything, it should be the other way around.
For now, giving away albums with a tip-jar makes sense, but when it’s not new anymore (i.e. when U2 do it), it will start to kill smaller bands. What use is higher gig attendance when you have to keep a day job anyway?
I find it very sad that there are several generations who think music should be FREE… and take a view that they don’t owe the artist nuthin’… Even downloads straight from the artist, meaning very little goes to the Big Bad Record Company. Peeps disregard the musician’s need – and right – to make a living.
hahaha i killed myself laughing on the dart reading this yesterday on the train. is this guy for real???? you can just imagine him telling saul about all the wonderfull people in the world who are going to make them mega rich or in trent’s case richer. boo hoo
What use is higher gig attendance when you have to keep a day job anyway?
too right
trent reznor is the naive chappy isnt he?
What Mr. Reznor is missing that one should use “free” as PART of one’s business model – not base one’s entire business model on FREE. Yes, RECORDED MUSIC is free and it’s a wise move to integrate that into a marketing plan for a record – but as he admits himself (when talking to Wired later) if he could do it again he’d also offer a premium package (like RH’s discbox). He should also release the CD as a physical product.
Have a look at this article from Techdirt in 2003 – The Grand Unified Theory of the Economics of Free:
http://www.techdirt.com/articles/20070503/012939.shtml
Anyone who doesn’t think that giving away your music for free will be a HUGE part of the new music industry is fooling themselves.
good to see the headline is right here Jim, how did the ’1 in 5 is a freeloader’ headline make it into the printed paper on Friday? Kind of ruined the impact!
Dave – to be honest, I only corrected the headline here after someone pointed it out to me. These things happen unfortunately.