Free is good for business as well

Image via CrunchBase

Radiohead and Nine Inch Nails dabbled with it, and now Wired's Chris Anderson is expounding the benefits of free, as the new model economy that is taking the world by storm and making people who know how to play the game very rich.

For those in the dark, Radiohead and Nine Inch Nails both released albums and offered them free, allowing people to pay what they thought it was worth. The reasoning being, the bands had new material to tour and would make more from concert tickets and merchandising trinkets than the paltry sum the record label would give them in royalties.

For the most part this worked, although more from a news perspective than an economic perspective, but the seeds were nonetheless sown.

Now Anderson has taken this idea and run the whole nine yards with it, surmising that free is the new economy for more than just music. However, in a book excerpt from the latest issue of Wired magazine, he talks at length about how musicians, not stuck in the machinations of the past, could actually use the new economy to their advantage.

His anecdote about the Brazilian band Banda Calypso is case in point. A band that has had all their albums pirated, yet make enough money from merch and live performances to actually own a jet!

We're seeing the move away from pure record labels already. Live Nation are turning into more promoter / labels, offering stars a 360 package that includes concerts, music releases, and merchandising.

I think, however, with the rise of the web, we can take even Live Nation out of the equation. Giving people for free something that is easily obtainable will never replace the value of the rarity and that's where seeing a band in concert will always make a musician a nice chunk of coin.

Nine Inch Nails' Trent Reznor has recently come out in defence of Anderson's position, saying that bands needs to try harder to make something rare that fans actually want to buy. Reznor himself offered NIN's album "Ghosts I-IV" in a variety of formats, with a free download being the cheapest option and a $300 ultra rare deluxe boxset being the top of the line.

Free is here to stay thanks to the ubiquity of digital, but there's be a place for the physical format for some time to come and thanks to "free" the physical format is getting a hell of a lot cooler to own.