The Ransom Distribution Model

[tylersuard]

I'd like your input on an idea for a new way of distributing music. The basic concept is this: after your album has been released, anybody can download it for free on limewire or other P2P and you get the short end of the stick. But what if you ask fans to pay up front, before the album's release?

For instance, let's say Radiohead didn't sell their songs on a "pay what you want" basis, but instead let fans pre-order the album, and the band agreed to release it as soon as 1 million pre-orders were sold(at, say, $10 each). They obviously couldn't control piracy after the release, but assuming they could keep the tracks from leaking beforehand, they might have $10 million in gross receipts.

Let me know what you think.

[Lazz]

Great concept.

Great model.

Those numbers would work well for Radiohead.

Lesser known guys would need other scenarios and smaller numbers.

I like it.

[roxhythe]

I think it could get a little complicated. If I said you'd get your album after I had one million pre-orders, and I didn't get one million pre-orders, would I be refunding money to one million people? The postage alone would kill me financially. On the other hand, if I didn't deliver an album, I'd have to refund the money, wouldn't I?

I think a better business model might be the FAN CLUB. You join my fan club--costs, say, $15 a year. I guarantee that during the course of that year, you will get, if your dues are paid up, a free album. It will have new stuff on it, and I think I can guarantee you'll like it--you're a fan, after all, and you like my stuff. I might post a teaser or two on the Website to make sure, but hey, I've already got your money.

My main challenge under this model would be to make sure I priced the album *to the public* a little bit higher--not to mention releasing it a little bit later--than to the fan club. Not too hard to pull off, though.

The key here, just as with that million-order album, is there needs to be the *fan base* to support it. I'm not sure you can do it without that fan base already in existence--a group of people committed to wanting your stuff. First charge, then, is to build that base. Yes?

Joe

[Geraint]

I think a problem with a lot of these radical new distribution ideas is that they rely on there being either a fanbase or that there definitely will be one. I remember a previous scheme where the artists made the music, and then a record label bought a copy for millions, with the understanding that they could make copies and sell them for thousands to record shops, with the understanding that the record shops could make loads of copies and sell them for a fiver. Neither of these schemes would be good for emerging artists.

Now, when I first read the title of this post I thought it said "Random Distribution Model" instead. Now that's an idea - you select a song, and then some of the time it's free, and some of the time you have to pay. If you can combine the music industry with online gambling, you might win at everything, forever.

[john]

Hi

I can think of several bands that have done the "pay up front" bit.... and they then gave the album to those who paid, and sold the album to those who didn't.

It's a good idea when you already have fans, not so good if you don't.

Cheers

John

[Nightwolf]

so the concensus is that in order to make this selling Music bit work...you need fans?

caarp, back to the drawing board

[john]

Hey

One band that has done it for more than one album (3 I think) is Marillion.

Their main motivation I understand was that they were no longer with a major label and needed funds to both record and release the albums. So they turned to their fan base to raise those funds.

In addition they also offered incentives (though I can't remember exactly what).

Cheers

John

[Lazz]

without an pre-existing fanbase, this kind of model probably wouldn't work

I took that as a given, personally.

None of the other models work without a fan-base either.

[john]

lol I don't want to assume

It is true that other models don't work without a fanbase, however in the conventional model you have media to promote with (cd,mp3 etc) to try and encourage fans.

Where I think the model falls down is that in order to create promotional tracks to build a fanbase you are "making them available" (sad fact of digital music).

Where I think the suggested model really works is that at the end you don't have 495 CDs left under your bed at the end of it! and you saved the outlay....

What I would ask is... if you ask for money upfront.... and you don't reach the target number for releasing, what happens? You refund all that money! That could be a lot of transaction costs.

One permutation I would suggest is "Volume Discount". So if we get 1000 up front orders it will cost you X on release date, 5000 it will cost you Y etc.

Cheers

John

[john]

The reason I don't assume fan base is that many artists their first real ongoing promo is their demo CD. Gigs yeah but they are generally transitory, and many online artists rarely perform live.

So I was looking at it from as many angles as I could. Personally I don't really have a fan base anymore, it's been 9 years since I was able to play live and I haven't kept a continuous touch as previously I was the writer/singer in bands, and now I am doing stuff myself. What fan base I have is small if at all. So I guess in many ways i was looking at it from the perspective "is it a model I could use?"

[Nightwolf]

Our Jeep clubs have several "Volume Discount" schemes running.

Get a "Promise to buy" from X# of people and the parts cost $X, get Y# of people and the parts cost $Y. The closer the group of buyers gets to the Y#, the harder they will push to get others on board

[john]

is hard to do on promised money though. What you could do is provide a discount on some merch, or the singles etc or special editions etc