The Future of Music: Don’t Forget About NIN

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A couple of days ago we wrote about Soulja Boy, and how the young rapper’s use of social media was a blueprint for the future of the music industry. But Soulja Boy isn’t the only artist out there rewriting the rules and using the Internet to his advantage: let’s not forget about Nine Inch Nails front man Trent Reznor.

Reznor turned the traditional music distribution model on its head in 2008 by releasing not one, but two Nine Inch Nails albums for free on the Internet. In March he released the first section of his four-part instrumental album Ghosts I-IV for free on Bit Torrent, and released the entire album under a Creative Commons Attribution-Noncommercial-Share Alike license that allowed fans to remix and use the music for other projects. Then in May, Reznor put out another NIN album, The Slip, for free download on his website and streaming via the iLike music service. It was also released under a CC license and Reznor encourage fans to remix it.

We wrote about Reznor’s distribution experiments in July and talked about how Reznor was able to be successful giving his music away for free by cultivating a group of “true fans” and building awareness for his personal brand. In fact, the Ghosts I-IV album ended 2008 as Amazon’s bestselling MP3 download of the year (where is was priced at $5), despite being available for free.

One of the likely reasons that NIN’s free albums were a commercial success even though Reznor gave them away, was that he had built up a core group of die-hard fans who wanted to support him, even when it wasn’t necessary.

Reznor’s exploits also helped build awareness, and there’s a ton of value in that. Reznor’s free download stunt, and similar alternative music distribution plans from major acts over the past year and a half from bands like Pennywise, Oasis, REM, and Radiohead, are valuable to the artists because they build brand awareness.

By giving away free downloadable music, Reznor likely accomplished a few very important things: 1. he built buzz for his concert tour and potentially boosted ticket and merchandise sales, 2. he likely converted a few casual fans into “true fans” (the type that will pay for free music the next time around), and 3. he probably attracted new fans via a “look-in” audience — people who had never listened to Nine Inch Nails before but downloaded the album because there was no barrier to doing so (i.e., they didn’t cost anything).

Reznor clearly understands the value in building mindshare. Awareness translates to new fans, which means bigger returns on non-album revenue sources such as concert tickets, merchandise, and limited edition releases.

His latest stunt? This week Reznor put over 400GB of HD concert footage on BitTorrent. The footage comes from multiple cameras shot at three shows over his past tour, and Reznor announced the release via a note on his official web site. “I was contacted by a mysterious, shadowy group of subversives who SOMEHOW managed to film a substantial amount (over 400 GB!) of raw, unedited HD footage from three separate complete shows of our Lights in the Sky tour. Security must have been lacking at these shows because the quality of the footage is excellent,” he wrote. “If any of you could find a LINK to that footage I’ll bet some enterprising fans could assemble something pretty cool.”

NewTeeVee speculates that the wink, wink, nudge, nudge bit is likely due to the fact that the footage includes songs previously written while Reznor was under contract at Interscope records, and so he can’t legally give them out for free. While it’s unlikely that Reznor will see direct revenue from any fan mashups created using the “leaked” concert footage — which probably can’t be sold for the same reason he has to pretend he’s not behind the “leak,” it is likely that he’ll benefit yet again in terms of building awareness.

We concluded in July that “Reznor’s blueprint can work for any content creators that exist in the long tail. From music to novel writing to web applications, if your goal is to make a living from your craft, it may be possible to do so by cultivating a group of ‘true fans.'” We still believe that. Like Soulja Boy, Reznor is pioneering a new business model for the music industry. Unfortunately for the labels, the two are showing that a lot of this stuff can be done without their help.