Why Trent Reznor’s Business Model Works So Well

Got to share this talk by Mike Masnick, who analyzes in depth the methods used by Trent Reznor to “connect with fans” and give them “reason to buy” and create a very well functioning business model :

Among other creative initiatives to connect with fans, earlier this year Reznor released 400 GB worth of HD video footage recorded at his concert tour, which supposedly could be put to use by “some enterprising fans”.

What I really like about Trent Reznor’s style is that he hasn’t “worked it out”. He hasn’t discovered some magic formula for how to make money selling his music using the internet, and then simply lean back, enjoy the money and not care about developing his business model anymore. There’s no autopilot. He seems to genuinely want to connect and seems to enjoy the work involved in connecting, sharing music and creating new intriguing ideas for how to get his music out – and make a decent income in the process. That’s also why it works so well. He really do connect with fans, he really do give them value for their money. And he enjoys it too.

What Trent Reznor does so remarkably well may also serve as an example for all those engaged in promoting or selling a product online, to quit the thinking that they simply need to “work out” a method, which will instantly make them “connect” with thousands of people and let them become rich and successful overnight. That well will run dry for them sooner or later.

Make real connections. Engage others. Give them something of real value. And have fun!

(via Digital Waveriding)

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Solely for fun

Kogt i Roen is a Danish comedy band based in Skive, a town situated in northwestern Jutland in Denmark. The band name is difficult to translate directly. It is Danish slang which could imply that the band members have stayed out too long in the sun… So far the band have made three CD’s of songs and acts, of which all tracks are available from their website.

Mikkel Christensen, who incidentally also run the hosting company which hosts Kaplak.com, is a member of the band, and we caught him between two jobs to get his take on what kind of project Kogt i Roen is.

Kaplak : Can you tell us a little about yourself, your niche community and/or business?
Mikkel Christensen (MC) : Our music is solely for fun. We basically want to have some fun and want to share our joy with others. If we can get people to “donate” a few Danish kroner each time they download our music, it only makes us happy. We don’t expect to get rich from it. We call our genre for Standup Rock. I think we spend no more than a few weeks every year on our hobby.

My company is the complete opposite. We are professionals and among the best. We don’t compromise with quality, and when we engage in something, we do it wholeheartedly, or not at all.

Kaplak : How did you get involved with your community/business?
MC : I really don’t remember. I have been in this business since my early teen-days.

Kaplak : What kind of digital product do you produce (if any)?
MC : We produce digital entertainment :)

Kaplak : What constitute the greatest opportunity for your business on the internet? What is the greatest challenge?
MC : Nothing really, we don’t expect to earn any profit from our music but if the opportinuity emerges we will certainly take advantage of it.

The first thing that strikes me from Mikkel’s answers is that Kogt i Roen is a completely different type of niche producer, in comparison with DigDoc Film Production, which we met last week. Where DigDoc is a professional “expert-driven” company working hard to create documentaries which do sell, Kogt i Roen is a completely hobby-based project, which do not critically need to earn money on their music and acts.

We’ve seen, that DigDoc’s end products were directly and entirely digital in their nature, i.e. films, videos, audio and photography. Kogt i Roen‘s digital product (the music and acts) may perhaps be said to be almost a biproduct of the band getting together for a lot of fun. The “real product” is the gig. The music files are also used on the band’s website to “sell” the gigs. As both a biproduct and something used to promote the band, the band apparently can afford to give the music away for free. Or perhaps more simply, because it doesn’t cost the band anything extra to put up the songs anyway.

It’s difficult to estimate the global appeal of something as “local” as Kogt i Roen. However, there are Danes everywhere in the world, and the band’s humour may find appeal anywhere, especially if the word is spread by likeminded, exiled Danes from northern Jutland via networks of interlinked personal websites, forum posts and social networks such as MySpace or Facebook. The website is in Danish only, however, as well as most of the band’s lyrics and acts, which supposedly limits it’s audience to Danes and Danish-speaking almost exclusively, although some songs such as the English-worded, Iraq War-critical Mr. George Bush may find broader appeal.

What’s more important however, is that there’s a lot of likeminded bands globally. A lot of people simply play and enjoy music (and standup) as their hobby. It just so happens, that the internet makes it very easy to make your music publicly available while you’re at it. While the band do not necessarily need to make a million on their music (those days of the “hit economy” seems counted anyway), their product (and many, many other products, which are similar to it in “localness”) may help contribute value to other products, so much so, that it may turn in some extra income. Even though Mikkel understates any need for this, even an amateur band has costs to pay, including the website and gear for the band, so a little extra may not be what drives the band, but may come in handy, while they’re at it.

To create a surplus of value, which goes beyond the “cost per song” economy of the industrial model, the trick is to reach the creative audience who need to tap into this wealth of material. And then to give them access and allow them to rip, mix and burn what they like. In some cases this creative audience are hobby producers such as Kogt i Roen themselves, but it could also be more professionally oriented producers, who are able to ask a higher price for their product, and therefore to pay a higher price for their “material” in return. We’ll have to see if this analysis holds up, when we put it further to the test.

Kogt i Roen is not an ideal first customer for Kaplak. The band doesn’t feel the “pain” too hard – there’s no imminent need for greater visibility or financing. However, the band is a shining example of the creativity being unfolded all over the internet, simply because it can be made accessible very cheaply. They, however, and the many, many other hobby producers of the web could be slightly better off, if they were able to tap into the surplus of value they create by giving away their music for free.

Kaplak need not motivate a hobby producer customer like this band so much (it won’t work anyway, as they don’t do it for money or fame) but rather simply demonstrate, that it is possible to earn a little extra just as easily, as it is to make their product publicly accessible.

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