Earlier this month, "Nine Inch Nails" entered into the business model of offering their music free online, joining "Radiohead" and the "Charlatans" in this ongoing experiment.
The strategy for the "Nine Inch Nails" was similar to "Radiohead," in that they offered some of their music for free on the front end, and then offered music put together in different ways to offer on the backend.
The backend offerings included a digital version of all 36 tracks for $5; a double-CD, which they sold for $10; a deluxe edition selling for $75; and finally an ultra-deluxe which they offered for $300. The ultra-deluxe version included vinyl with it, and also the autograph of Trent Reznor.
Free music offered was nine tracks from the overall 36 track deluxe version mentioned above.
According to the band, the limited number of ultra-deluxe versions, numbering 2,500, sold out almost immediately.
Nine Inch Nails - The Hand that Feeds
For the first week, the band's manager, Jim Guerinot, says over 781,000 transactions were initiated: both free and paid downloads, as well as physical sales. He added that overall sales surpassed $1.6 million during that time (at the nin.com web site), and digital downloads through Amazon.com (Nasdaq: AMZN) brought in another $1 million.
I just wanted to note, that although offering free music is in its beginning stages, it does show one obvious trend, and that is people eat up the weightier products which includes all the bells and whistles; and they don't mind paying a lot to get it.
This isn't new in the overall online marketing world, as markers have offered e-books online for free, and then follow it up with a physical book with a hefty price, which consumers are more than willing to pay for.
With these two examples, we should keep this in mind going forward. Putting together a high-quality product after a free or inexpensive product or service, with a lot of interesting things included, is a hot item for anybody that's a fan of your business. It's there, possibly more than anywhere else, where the big profits can be made, and people love it.
Related Articles on the Evolution of this new business model
Move Over Radiohead, Here Come the "Charlatans"
British Rock Band "The Charlatans" Offering "You Cross My Path" as Free Download
Radiohead Releasing Newest Album as Download Only First
Radiohead Taking Charge of their own Destiny
Radiohead's "In Rainbows" Uses a New Marketing Strategy
Radiohead's 'In Rainbow' - Free - Pay-what-you-wish - New Example for the Music Industry
RadioHead Speaks back - "take that, Comscore ... your all wet.
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