The Formula for Future Music Business Models

In the presentation Michael Masnick gave in Cannes in January 2012 he discussed how Nine Inch Nails used a successful business strategy to make a lot of money without being affected by piracy. They connected with their fans by getting them involved in their music. For example on the back of their concert tee-shirt they put in colour certain letters in the names of the countries where they were performing these letters spelled the words “I am trying to believe”. The people who tipped this in the Internet found a site called “I am trying to believe” where Trent Reznor started an Alternative Reality Game where fans could win prises (e.g. concert tickets etc.). This helped him connect with fans, as they felt involved in his music. He would also drop USB sticks with some of his new music in the toilets of his concerts where his fans could find them and thus enhance his connection with fans. He would then give them reasons to bye his products by making them seem special or unique. This created a successful business model which can be summarised in this simple equation Connection with Fans (CwF) + Reason to bye (RtB) = The Business Model ($$$$)

This idea should impact the way the music industry functions immensely as in this time where people can download music for free on pirate sites the music industry should find many new diverse ways to get people to actually pay for music. They should also understand that it isn’t enough for a musician to simply create music any more it is extremely important for them to truly find a way to connect with their fans so as to get them really interested in what they create. It also shows that it isn’t just the price of the music that makes people pirate it but it also is the fact that people are not interested enough in the musician/band to actually be bothered to bye their music.

I would use this notion to insure that my clients are extremely interested in my product. I would create alternative reality games and scavenger hunts in order to boost their interest and help the artist connect with their fans. I would also add special features to my product (other then the actual music) that cannot be found for free on the Internet so as to give the client a real reason to bye the product.