Unbound Edition. Meaningful conversations about brand, from Davis Brand Capital.

Digital Music is More than Just iTunes and Pirates


Apple and iTunes have revolutionized the way we purchase and consume music.  But there are newer and more exciting things happening in the world of digital music than the ubiquitous 99-cent download. And if you don’t think it’s true, perhaps you’re just a self-centered Mac-o-phile . (Don’t take it personally. I’m one, too.)


Earlier this month, Trent Reznor took an approach that made Radiohead’s innovative “pay-if-you-want-to” strategy for In Rainbows pale in comparison. Reznor released his new 36-song instrumental album, Ghosts I-IV, on free BitTorrent download sites, such as PirateBay .  He simultaneously launched the album for $5 download on NIN’s site and Amazon . Hardcore NIN fans have the opportunity to buy special collectors’ additions for $70 or a whopping $300 . Amazingly, Reznor netted more than $1.5 million in the first weekend alone.


One of the more interesting components of Reznor’s approach was the use of TuneCore , a site that allows bands to distribute their music via iTunes, Amazon, Rhapsody and other popular sites for a one-time nominal fee (Reznor paid $38). TuneCore handles the logistics and allows artists to keep 100 percent of their royalties.


Today on NPR’s “Fresh Air,” Terry Gross interviewed industry expert Eliot Van Buskirk on the latest trends in digital music. According to Van Buskirk, there are 7 million-plus bands on MySpace . He discussed how some of these self-promoting bands are finding new an innovative ways to distribute their music and succeed in the digital realm.


One of the more interesting avenues he discussed was SellABand.com , a site where fans can invest in up-and-coming bands and reap the rewards if their band succeeds. The company is based in Holland, and their model isn’t legal in the United States because of SEC regulations. Nonetheless, SellABand’s model and other emerging models in digital music distribution may point to a new age of consumer and artist control in the industry, where listeners and bands have more power over their favorite “band brands” than ever before.


Although it’s been underway for quite some time, disintermediation that circumvents the traditional record industry model is becoming more and more of a reality everyday. Free downloads had the industry big wigs nervous already.  And these examples are all new reasons for concern. Innovators without a vested interest in the outmoded $20-per-CD model may eat their lunch – and solve the artist royalty dilemma at the same time.





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