Nine Inch Nails made at least $750k from CC release in two days

Mike Linksvayer, the CTO of Creative Commons, runs the numbers of Nine Inch Nails's Creative Commons download experiment and discovers that it only took the band two days to exceed the typical net from a massive-selling traditional CD release. The band sold $750,000 worth of "limited edition deluxe sets," plus an unknowable further sum from sales of the regular CDs and merch.

The $300 “ultra deluxe edition” of Nine Inch Nails‘ Ghosts I-IV, limited to 2500 copies, sold out in a couple days (I believe released Sunday, no longer available this morning). There are some manufacturing costs, but they don’t appear to be using any precious materials. So if an artist typically makes $1.60 on a $15.99 CD sale, profit from sales of the limited edition already matches profit from a CD selling hundreds of thousands of copies.
Then there are non-limited sales of a $75 merely “deluxe edition”, $10 CD, and $5 download, and whatever other products NIN comes up with around Ghosts.

Link (Thanks, Brian!)

I write books. My latest is a YA science fiction novel called Homeland (it's the sequel to Little Brother). More books: Rapture of the Nerds (a novel, with Charlie Stross); With a Little Help (short stories); and The Great Big Beautiful Tomorrow (novella and nonfic). I speak all over the place and I tweet and tumble, too.

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johen

Not to play grumpy old man (although I do it well), but the title is a tad misleading. The band didnt make $750k. They sold at least that much, but I’m pretty sure it actually cost money to make the album.
Dizbuster

I realize Trent & the Radioheads worked real hard to get where they are, but it wasn’t without major help from the fat cats we love to vilify. Sure, they’re fucking slimeballs, but a few bands manage to get filthy rich because of those slimeballs. Do I disagree with the rockers’ loathing of the majors? Not at all, but I find the situation a little ironic.

Because of the success they’ve had piggybacking on the major labels, I think Reznor and the others ought to use their considerable influence to help smaller bands find fans of their own. I know I’ve discovered great music by the mere mention of a name in interviews by artists I admire. Know what I’m saying?
OpSiN

He only seems to be taking into account CD production costs for the limited edition release, which isn’t going to cover production costs for the books, the LPs, the blu-ray disc, and litho prints of artwork…

He’s made a lot less than 750k off of the limited edition release!
digitaltribes

–#4 “I have still yet to hear from the store support for my link being unusable. Not that it matters now.”

Same here, I bought the $10 version and had to download it from Mininova when my link didn’t work. I’m still waiting to see what their reply will be.

Bless NIN for making money while proving that the music industry lawyers are a bunch of scam artists. Granted the little guy can’t pull this off, but this is a start in the right direction. Above all it proves the falsehoods portrayed by the recording industry.
Too bad that our politicians are all too technically illiterate to understand what this shows. Clearly it is the business model is the problem not the downloaders.
GregDDC

@Cory Doctorow
Cory, you mentioned the Napster case and Alanis Morissette stating that 97% of artists made only $600 or less per album. Can you site your source (sauce)? I am interested in this topic but I couldn’t find that particular statement out on the vast internets.

Thanks.
Jeff

Cory Doctorow said, “As I like to say, “I get the book on Slashdot, they get it into the New York Times.” It’s a good mix.”

Do you really say that? So, you’re saying that the publisher first has to validate your stuff, then use its connections to get you a review in the New York Times? Are you telling me, that you couldn’t send your book in the the Times, which you self-published, and they wouldn’t review it? Are you telling me that publishers are NEEDED? And if they are needed, then what rights do they have to protect the stuff they are buying? If you can have it both ways, fine, but that’s not the way it is for most writers, is it?
booticon

This is a Good Thing. nthing what others have said about how as of right now, only artists as popular as NIN or Radiohead can pull this off. But this sets an awesome precedent. I’m sure many websites will be formed around this idea.
gATO

The relevant thing is, you can take out the middleman. Granted, all those DVD and vinyls cost money, but even so, I’m sure the profit they are making is way higher than that of a traditional release, and that applies to any band, regardless of fanbase size. Once the distribution model is figured out (and I really believe that NIN is going in the right direction), the new game will be promoting your music, and that can be done independently, too.

Booticon, Kid: I don’t think that only NIN or Radiohead can pull this off, just because they are who they are. Any lesser known band with a solid fan base could do it too and still make a decent profit; of course, on a much smaller scale and with a lot less hoopla. Take a look, for example at EinstÃ¼rzende Neubauten and their “sponsored” albums.
Mister Staal

To those who are doubting the usefulness of CC distribution for bands that don’t have a massive fan base, consider Tone. There was a post here several weeks ago ( http://www.boingboing.net/2008/01/22/firstever-electronic.html ) about a Danish artist who released an album under CC. Would anyone here have heard a whisper about her otherwise? Now, I understand that the big deal for that post was the recognition of a CC release by a music collection society. Regardless, I would imagine her fan base has grown considerably. I’d pay good money to see her play here were she to tour.

It’s easy to get caught up defending the status quo. Try considering the possibilities of what may come. Labels only exist because some savvy businessmen found a new way to cut in between artists and fans. Let’s cut them out.
themindfantastic

There are many many artists who do make enough to make ends meet. I met this wonderful guy who had been around the world touring his music but he still occasionally did temping when he was between tours/recording sessions, but that was fine for him, he found the work relaxing. We would talk well until the morning hours working away (it was an overnight shift) filing internal reports/mail into slots, he mentioned to me about the fact that if your a good performer (not musician so much, but performer) foster connections with your fans, and make them feel the money that is spent by them is worth it, by treating them with respect and honesty, you will rarely have a problem. Answer your fan mail when your a struggling artist, shake hands with people, talk with them after you perform or if your an author while your signing books. These people are gold and draw other fans in… eventually you will have a small but good fan base that will support you, see the 1,000 True Fans article for more on that. Treating fans like criminals, like sheep to be fleeced, doesn’t help you in the long run. Trent has built up his fan base for YEARS, yes sometimes with labels (who usually screwed him over, time and time again) so he has the ability to get more for his efforts. But if you put out stuff regularly that you put effort into to be good, you will get a fan base, small yes, but over time it can grow. Not everyone will be a Radiohead or NIN, but sometimes taking over the world isn’t the point, but being an artist who treats those who like your work well, rarely starves.
arikol

I have the $75 version on order, mainly because the $300 version was sold out.

The server was down when I tried DLing it, so I got mine of thepiratebay. I don’t really feel guilty about it as I’m paying anyway.

Let’s quickly look at what’s included.
all versions include the download version.

$5 (download version)
all songs in 320kbps mp3 (no DRM crap)
48 page PDF booklet
Bunch of images, backgrounds, web graphics etc.

$10 (2 CD “regular” set)
2 disc set (audio cds)
+ 16 page booklet
+ instant access to the download version

$75 (deluxe edition)
4 disc set (2 audio cds, 1 blue ray disc with
the audio in higher than cd quality and 1 data
disc with multitrack files for all tracks for
remixing purposes)
+48 page book with photos
in a nice slipcase

$300 (limited edition)
everything from deluxe edition
+4 vinyl version in 125gram high quality vinyl.
+ photography book with loose prints suitable
for framing or viewing in the book.
+numbered and signed.

Making masters for a 4 LP run of 2500 copies is as far as I know expensive. If such a small run is done on good vinyl then you get the strange case where vinyl can theoretically give better audio than cd. (lets not go into practicality)

The prints and packaging cost a bit, as well as paying all rights holders for images and any designers and others that worked with Trent. All that is cost and cannot be calculated into Trents or NINs profit.
Taking a wild guess it wouldnt surprise me if the total costs of “deluxe” might be $50 and the limited ed. might go well above $200.

If anyone has better estimates or even just a better grounded guess, let’ er rip.
Christovir

The internet is awesome for new artists to reach new fans, but a lot of the world is still made of atoms instead of electrons, and the costs of physical production is still a barrier to new artists.

It seems like on-demand fabrication of hard copy CDs would be an excellent way to reduce the barrier of production costs for aspiring artists, much like how CafePress is a free service for potential swag sellers and t-shirt designers. Most half-assedly serious musicians have already recorded their music they just don’t have the capital or deal to make the CDs. This way, floating out a CD for sale is much less risky for the artists (essentially, just opportunity cost), and a lot more talent and creative work will get out there. I’ve heard of on-demand book fabrication allowing many more authors to “publish” without a publisher, why not extend it to music? For all I know, this service already exists, it’s just not yet in the public consciousness as an option.
Logical Extremes

It’s not only the biggest bands who can be creative with how they get the income they need to keep on truckin’ with their art.

Perhaps more in the spirit of Kevin Kelly’s 1,000 True Fans, Jill Sobule is taking donations in advance for her next record:

http://www.jillsnextrecord.com/?r=36293

and posting free content as well. OK, so she has lots more than 1,000 fans, but same idea.
AceJohnny

I have to play devil’s advocate here and point out the critical difference between artists such as NIN and Radiohead and your typical band: fan base and promotion.

NIN and Radiohead are huge, and they now don’t need to spend a dime on promotion: fans are watching their every move anyhow and they get free coverage (such as this post). Also, people are ready to pay 300$ for collector’s edition of their stuff.

That’s not the case for the huge majority of bands and other creators out there. On a related note, how do you get recognition and promotion, Cory? You don’t rely on the traditional circuits, I guess :)
Moon

@ #9 DIZBUSTER, the problem is the “stars” that these slimeball record execs bring to us are people like Britney Spears and Ashley Simpson and the InSynch – it’s all marketing, not talent.

My guess is (and I have no idea of the truth of this, but it makes sense) that Radiohead had a pretty big club following and that’s how the record execs found them and signed them. Word of mouth on the internet now being pretty much worldwide, I would bet they would have been discovered by everyone before too long without the record companies.

@ #5 KID, if a band only has 100 fans, they’d better keep their day job. :D
Jeff

So, what is the exact point in paying a record label anything if a band can do this in two days? And at which point would a writer not want to bother with a publisher? I’m thinking that even a very popular writer still requires the stamp of approval from a publisher. I’m not sure the fans do, but the writer and his/her peers might require that. It seems like a logical filtering process. I’m not sure music needs validating the way books do. I love Safjan Stevens, who is a self-published musical artist. But I don’t own any books that are self-published.
Cory Doctorow

Acejohnny: I do both; I use the Internet personally and Creative Commons, and I work with my publisher’s traditional PR apparatus. As I like to say, “I get the book on Slashdot, they get it into the New York Times.” It’s a good mix.
Davin

Hot damn! I purchased the $5 version, but the server was madly swamped. Solution? After paying and being unable to download, I simply downloaded the whole thing from piratebay.

They were definitely unprepared for the success of the online sale, I have still yet to hear from the store support for my link being unusable. Not that it matters now.
Kid

That is the 1% law. 1% of the wealthy fans support 99% of those who doesn’t pay.

That works for NIN and Radiohead, because 1% of their fan base is still 100,000 people.

But how about starving artists? 1% of their fan base might just be one person.

So it pretty much works like the article on Free by Chris Anderson, where starving artists have to give out records for free, while making money hopefully off live shows.

His theory works, again, only for mega-bands and mega-corporations. The rest of us can only support our endeavors with salaries from another industry.
Wingo

I decided to pony-up the $5, just to support the cause. I haven’t been too terribly impressed with NIN’s latest couple of offerings, although I was a big fan as a younger man…

That said, I’m really impressed by this album. It’s quite beautiful, actually. I think Trent’s really matured, and he deserves success from this.

Impressive.
Steve D

As long as we’re being picky about NIN “making” $750K…

(a) People regularly say “[blockbuster movie X] ‘made’ $Y million this weekend,” without deducting the production costs from the gross, and without calculating the individual theaters’ take from the studio’s take.

(b) Seeing as how the sales of the limited edition is only one piece of the pie, and we have no idea how many other “paid” copies were moved in other formats — there’s no telling what the total gross is or what the net might be. If the other formats are moving as quickly as the instant sellout of the deluxe limited edition might suggest, would a $750 K net at this point really surprise anyone?
Cory Doctorow

Kid: the majority of starving artists have never ended up where NIN is, labels or no labels (97% of artists with a major label record deal earn $600 or less from it, according to a filing Alanis Morrisette’s lawyer made in the Napster case).

Most artists will always starve. But there are indies who are making a living from CC (Jonathan Coulton), megastars who are earning a living from CC (NIN), and lots of people somewhere in the middle (Danger Mouse, the Beasties) who used or use CC for part or all of their income.

Bottom line: the traditional major label position that all copying must be controlled to get an income for artists, and that majors are the smartest people when it comes to getting artists paid, is demonstrably false.
Kid

#2: A writer already did not need to bother a publisher since the Internet was born. What you are reading right here is self-published.

The difference is that, you cannot make much money out of selling BoingBoing subscriptions, instead, you earn it through ads from Honda and Microsoft. Your deluxe book editions of BoingBoing (unless you are The Onion) might not sell well, but you can surely pitch in some of your own books in your high traffic web site, and perhaps your 1000 True Fans will buy it.

But there will be the day when your book doesn’t even sell anymore since every book is given out free on PDFs, so you have to make money out of selling bread to your readers. Just make sure that corporations don’t give out free bread by then!
cortana

For reference: the nin store is back up and working fast now. My download with (with code from the other day) is ripping down at a frisky 500k/sec.
zipr

I too paid the $5, and got way more than I’ve gotten from other outfits, online or in-store.
-High quality mp3 files
-Each track embedded with a unique piece of cover art
-A PDF ‘booklet’ of art and liner notes

I hope that more online distributors go this route.
historyman68

@#9: If not for the obvious copyright infringement, I’d love to start a band called “Trent & the Radioheads”.

Or a sitcom.
Anonymous

Hi all,
i don’t get the fuzz about the “They’re so famous, they don’t need labels anyways”. I think it works like this: Either you are famous and the fans check you out an buy the stuff or you are not that famous, but then you need all the publiciy you need to get famous so that fans come to your concerts. Publishing your stuff with CC-licence will help you alot acheiving this. PS: Just getting attention out of publishing stuff online will work only as long as other bands etc don’t do this… what matters is the music.
Jeff

As per Doctorow, I suspect that if you are popular alreaday you can do what you want as far as giving your stuff away as a promotional tactic. Maybe that’s a reality that isn’t being thoroughly examined. Does Cory Doctorow have the ability to make a lot of noise about C.C. not only because he is great writer, but also because of his name? We aren’t talking about Joe Schmoe, we’re talking DOCTOROW–Ragtime, City of God… A name with some recognition, even if it’s for E.L.Doctorow. So, are they related or not?