When avant-garde rock band Radiohead posted their latest album online, they invited fans to pay whatever price they thought was appropriate — or even pay nothing at all. More recently, bluesy Brit Joss Stone went on record as saying she thought “piracy” of her music was just dandy. She implies that the freely shared music is growing box office sales of her live shows. These and other examples from the recording industry suggest a business model where your chief intellectual product can be given away — or shared at a huge discount — to the overall benefit of your bottom line. One could even go so far as suggest that digital rights management (DRM) protection does more economic harm than good.
Okay, but does this model hold water if you’re a niche business writer, speaker and consultant?
My blogging friend Kevin Hillstrom reports that it seems to, if viewed holistically. And especially since his book is called Multichannel Secrets, you’d better believe Kevin views things holistically!
Joss Stone more or less admitted in her interview that, taken as a single tactic (my word, not hers), giving away music helps create buzz. It doesn’t help pay the bills. But this buzz is supporting her live shows. She is, in essence, a multi-channel business, and one channel is benefiting from the loss-leader status of the other.
Similarly, Kevin — who is the president of MineThatData — mentions in his blog that his pre-release book giveaway was not a profitable move. He reports at one point that he gave away twice as many books as he sold. But he emphasizes that as a “‘micro-channel’ strategy to running my business,” the giveaway concept makes good economic sense.
If you’re a self-publisher, you’ve probably already considered the strategy of giving out free advance copies. But Kevin can still help you, with his well-framed case for emulating Radiohead. Rock on, Kevin!
The value of a tactic — like giving something away, e.g., — can only be judged in the context of the overall business model.
The Grateful Dead “gave away” their music for 30 years, letting fans record concerts and freely share those recordings. Towards the later years of their run, they were among the highest grossing rock bands.
They made their money from the concerts, and paraphernalia sales related to the concerts. And that’s one big reason why they built an infrastructure to distribute tickets.
Was it a good LONG-TERM move for Radiohead to “give away” their music? We’ll see. Especially next time around when fans might expect free music again, and might not get it.
I agree, Ron, that the Radiohead move was risky, since so much money was at stake. They are also nearly unique in the industry for their rabidly devoted fan base and the fact that critics and fans agree to a surprising extent that Radiohead’s albums are uniformly good.
I say nearly unique. Come to think of it, this could describe The Grateful Dead as well. Maybe the Radiohead giveaways will be a larger success than The Dead’s!