Trent Reznor (of Nine Inch Nails) has released the stats from the NiggyTardust experiment. For this experiment, 3 versions of the the NiggyTardust album (by Saul Williams) were released in a digital format. One in 192kbps, one in 320kbps, and finally a FLAC (loseless) version. For limited time you were able to download the 192kbps for free and you could pay $5 and get any one of the 3 versions of your choice. A great test to see what kind of money could be made from such distribution.
The end result we will get into in a few minutes, but the outcome of the result has Mr. Reznor stating that there should be an ISP music tax on consumer high speed internet connections. Something that I feel has little benefit to the artist because that would require the labels to push for it and the end result would be similar to the artist’s cut of iTunes sales, which is basically nothing. However, from a consumer standpoint, it would give you the right download all the music you wanted without fear of being sued.
Lets take a look at some of the numbers released via the NIN.com website.
The NiggyTardust Experiment
The album, “The Inevitable Rise and Liberation of NiggyTardust” was released online and had 154,449 total downloads with 18.3 percent of people choosing to pay for the album. That means, 28,322 people (18.3% of 154,449) paid five dollars for a digital album, the grand total of money in sales is $141,610. That amount is based on the muliplying 28322 by 5. So lets look at some numbers. Unfortunately I have to guess on some of this because I do not know and if Mr. Reznor or Mr. Williams would like to give me correct numbers, I would be more than happy to release updates on the amounts spent and total (possible) profits.
Now, if I remember correctly, Trent Reznor has a studio in his home, so studio time for the album probably cost fairly close to nothing. However, in case they did pay for actual studio time, we account for that later. Now, since Reznor co-produced the album we can assume he charged Saul a fee, lets say that fee was around $15,000. Now they had to pay for hosting and bandwidth for all 154,449 people to download the album (those that paid and those that didn’t) which came out to around 15.5 terabytes (assuming my math is right). After some checking, I figured out that the going rate for that kind of bandwidth is somewhere around $100/month. Considering the sight has probably been up for 2-3 months, that’s $300. We can even say that, the $300 is just for bandwidth and that it’s another one hundred (100) dollars a month for just hosting the site and files. That still means only 600 dollars total in host fees. So far, Trent Reznor and Saul Williams have made in excess of 100,000 dollars. Lets say that after all the costs they come out with $100,000 even (this way we account for any unknowns because the producer and hosting only cost a total of around $16,000). I don’t know about anyone else, but I’d be happy with having that much money go directly into my pocket for one album.
The Mixed Bag
Trent Reznor, put work into a product and only a small percentage of people paid for the work. However, if you release a free version of a product, guess which one is going to get more downloads, here’s a hint, it is not the one that costs money. I can understand why he’s upset at the small number of paying customers, but come on, are you really going to get angry with people who took the cheap path that you made available to them?
Realistically this is the case with software as well, and that should help give people an idea of how things work when it comes to digital, online distribution. What I mean is this. Several companies offer free and pay versions of their software. The idea is that if you use the software enough you’ll get the pay version. This means that you have a lot of people using the free version and only a few people buying the pay version. I know that I don’t pay for every piece of software that has a free and a pay version, I usually try to make do with the free version if I can. Now, I have purchased software that I use quite frequently and love.
I think that digital music being released directly through the artist should be looked at the same way. If you offer both a free and pay version, of course more people are going to grab the free version and just “make do” that is the way of the internet.
I think that it is great that Trent Reznor is opening the books on the NiggyTardust experiment. However, I think that he should try again with his next album and only offer a pay version (maybe with two price points, one for 320kbps Mp3 files and another for FLAC). I bet that he will see people more than willing to pay for the music. But that is only a theory.