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White Collar Criminals

GHOSTS MAKES TRENT REZNOR A MILLIONAIRE OVERNIGHT

 Wednesday, March 5th, 2008 at 12:08pm by

NIN deluxe ghosts package“We have SOLD OUT of the 2500 Limited Edition Packages.” reads the order page at store.nin.com. Still wondering if the economic model Reznor is employing for the release of Ghosts will make Trent money? Do the math. $300 X 2,500 = $750,000. Woah. That’s in just 2 days, and doesn’t even include sales of the $70 and $10 editions of the album. And it’s all profit; a grand total of $0 was spent on marketing this record; Reznor announced it solely on his blog.

The $300 “Ultra-Deluxe Limited Edition” includes audio CDs, DVDs with the multi-tracks for all the music, a 48-page hardcover book of photos, 180-gram vinyl signed by Reznor, and several other awesome goodies.

While money was spent on the manufacturing of the product, shipping it, and web development of the store, that money pales in comparison to the traditional major label marketing model. Trent is going to be making quite a nice chunk of change on this endeavor.

So is there a future for the sale of recorded music? Did this economic model work? You tell me.

-VN

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  • The Pig In Zen

    I think Trent’s new Bentley will answer that question for you…

  • http://www.crustcake.com crustcake gerf

    Still haven’t heard ‘Ghosts’, waiting for a reply from customer service concerning my failed download attempt…

    “So is there a future for the sale of recorded music? Did this economic model work? You tell me.”

    Well, for major artists like Radiohead and NIN it certainly works wonders, but for up-and-comers without a massive pre-existing (i.e. built up over years by traditional marketing, non-traditional marketing, touring, etc.) fanbase, I think recorded music will in the future be seen more as a promotional tool than a revenue stream. If you give people a taste for free, and they like what they hear, they will be more apt to see a show, buy a shirt, tell their friends, and, ultimately, purchase your band’s recorded music in the future.

  • anonymous

    last time i checked it still costs a crapload of money to record in a proper studio

  • DamagedMike

    I bet there are a bunch of big major label artists who wish there contarcts were up right now. After this what will the record companies do to keep established artists once their contracts are up? The collective gasp from the reord compianies may just be theri last this time as the Grim Reapers emerges from the shadows headed in their dircetion.

    I think there is a future for recorded music and there always will be. How eople get it is what will change. I think the end is at hand though for the record companies….the majors at least. I think the indies will continue to serve a purpose long after the majors have been made irrelevant.

  • DamagedMike

    “anonymous Says:

    March 5th, 2008 at 12:56 pm
    last time i checked it still costs a crapload of money to record in a proper studio…”

    Not if you are a one man band with a home recording studio. The cost for others continues to fall as new recording technology and electronic equipmet become less costly. Big over-priced studios are the only ones who might fade out sooner than record companies. There are some amazing sounding records being recorded by unknown producers at hole-in-the-wall studios.

  • chris

    i really really HATE nine inch nails, but i’m glad to see someone trying to get around all the record label bullshit, and trent reznor seems to have done just that

  • http://www.crustcake.com crustcake gerf

    “last time i checked it still costs a crapload of money to record in a proper studio…”

    Relative to, say, 30 years ago, a quality recording can be produced fairly cheaply. In the past, a quality sounding record could cost hundreds of thousands of dollars to produce or more. These days, thanks to technology, professional albums can be recorded for a few thousand or even less.

    On top of that, distribution is now much cheaper and more accessible to independent artists as well. Before, to get your music in the hands of the consumer you needed to manufacture physical albums and then put them on trucks and ship them to record stores. Now, you just put the damn tracks online and/or work out a digital distribution deal to get the music on all major online music retailers (iTunes, Amazon MP3, etc. etc.). There’s virtually no overhead (warehouse, shipping, physical packaging) and, if your shit is GOOD, it will distribute itself.

    I guess that’s the point– because of the reduced cost of recording and distributing music, there’s now WAY more music out there floating around. All you have to do as an artist is be DAMN GOOD, and you’ll stand out amongst the garbage.

  • Gibbo

    Personally, I believe that the model that Trent has used here works because it’s NIN. As soon as news omes out that a new album is available, half the world bombards the sites etc (as we have seen)

    Being in a band, I know that there’s no way I could do something like that, you need to be a big name to get this to work, a massive name.

    *shrug*

  • http://www.myspace.com/porkspam Porkpsam

    You know what, haters will hate, but good for him. You know. He’s shown he’s one of the ones not out to fuck his fans out of money. I mean he doesn’t exactly need the money, but it’s well deserved.

  • attackmole

    I really, really, like this format. If double albums cost 10 bucks, I’d sure as hell buy more of them. Piracies devalued music but this just demonstrates that if you give people a good price, they will buy your music. I’m not sure if smaller bands have the capital to do something like this, but I really like the idea.

  • Tony

    The business model works for people like Reznor that have blogs read by millions of people, who in turn, spread the word to millions of other people.

    It’s not all profit either, as there were bandwidth costs associated with this release.

    It’s encouraging, but any artist of this magnitude could achieve the same thing.
    The model will only change when places like iTunes charges $1 for 30-40 songs.

    Make it so cheap and so easy to get access to anything, and people WILL pay for music.

  • http://www.hibernum.net Hibernum

    Whoa, I didn’t expect those kinds of numbers. Brilliant. Think of the way he marketed the last album, and the marketing of this album and then you start to see someone who hasn’t lost touch.

    I guess this shows that people still value having a piece of plastic in their hands rather than a few extra bumps on their hard drive. It makes sense, though. CDs were way overpriced for so long that when Napster v 1.0 came along no one blanched at the idea of ripping off record labels. These were the same jerks that charged 18 dollars for a CD when the cassette tape only cost 8 dollars, and CDs were probably cheaper to make (just price a blank CDR vs blank cassette tape). Shit, they lost a class action lawsuit because of it and I got a 20 dollar check. It is too bad that bands thought that they were being ripped off instead of realizing that it was just another avenue for marketing. No one bitched when people bootlegged songs from the radio onto tapes or traded tapes. But when mp3s came along, some people couldn’t see that the new media was the same as the old media.

    The question is: have the record labels learned anything from this experiment?

  • Don’t Damn Me

    Fair play to Trent, its clever as hell. But i’m not having that he’s some kind of musical hero because he’s not going to screw fans out of their money? I’d say it was the opposite. Now he can sit at home, churn out whatever bullshit he feels like, and then sell it with no marketing for $300 a pop.

  • Tony

    I’d like to add that the “it’s all profit” comment is even further put in doubt when the manufacturing of that boxset is taken into account.

    There was still a hefty profit margin, but not nearly 100%.

  • ERiK

    Record labels are evil for selling $18 cds (which is as much the fault of the retail outlet and their markup), but Trent is a hero for selling 300 dollar boxed sets.

    ok…..

    this is for an album he recorded in a few days? I’ve always thought NIN sucked, but this is ridiculous.

    woo hoo, the future of music is here folks. Fat old geezers cranking out shit they wrote in their sleep and people going ape shit about it. What a hero!

  • Shnaz

    Without really dedicated fans, no ordinary band is making this kind of money, no matter what the business model. A lot of other people have brought up the fact that the manufacturing costs associated with the Ghosts box-set can’t just be pushed under the table—although I’m sure NIN re-couped the costs in no time.

    Good point about old-school marketing…traditionally that’s where all the cash is funneled to–without that, profit margins are definitely quite a bit higher!!

  • http://www.hibernum.net Hibernum

    Shnaz,

    I was under the impression that re-coup in the music industry means paying back the money you owe the record label which you borrowed as an advance to make your record in the first place. So in some sense I think it is good to realize that Trent’s super expensive box set probably did cost a lot to produce, but because he doesn’t have a record label taking royalties to re-coup the costs of production, he in fact makes far more money. He starts making it right away.

    And as far as Trent being a hero for selling a 300 dollar box set; no, more he’s a hero for giving people options. A $0 high quality download, a $10 piece of plastic, and a $75 delux edition. I think people are a bit daft to buy anything more than the $10 edition. But think about this: Trent can sell people a 2 disc album with 16 pages of liner notes for 10 dollars and still make it worth his time. A big record label will charge you 18 dollars for a one disc album with 5 pages of liner notes and will sue you for listening to the 0 dollar download that you got to see if this was really worth your booze money for the week. I have been preaching about the DIY wave coming, the death of the record industry old model for a long time. This is the end of the beginning.

  • http://www.indiehq.com bill

    Trent didn’t just come out of nowhere with this. He, like Radiohead, is a very well known act. I’m sure if Led Zeppelin decided to self release a package of the Ertegun Concert, it’d do very well too. Trent Reznor is a ubiquitous brand name. He’s had years of pricey publicists and label-funded promotions to help him get to this point. The only reason anyone cares about Trents singular blog post which caused a ripple effect is because of his history. An unknown band could do the same thing and it’d fart right out to no audience.

    Most artists don’t have two nickels to rub together to help them create demand for their wares, buy a van to tour in, let alone pay the designers and manufacturers it took to create such a crazy package. E Labels are simply marketing companies and banks for talent and although the role may change slightly- they won’t go away entirely.

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