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.
The ultra deluxe success seems to me to validate the encouragement by some to pursue large revenue from rabid fans and collectors willing and able to pay for personalization, authenticity, embodiment, etc., rather than attempting to suppress zero cost distribution to the masses.
Speaking of distribution, click on the magnet to search for a fully legal P2P download of Ghosts, assuming you have the right filesharing software installed.
nin_ghosts_I-IV_mp3.zip (283.7 MB)
The artist’s choice:
Option 1) A tiny percentage of your publisher’s profits for life – if you live long enough for their ‘costs’ to be recouped.
Option 2) 100% of your self-publishing profit this year, maybe next.
Not only is the share of profits better, the costs are better (despite smaller sales). The costs in option 1 are colossal, whereas in 2 they are miniscule, especially given unconstrained promotion and reproduction to (hopefully virally) foster a far bigger market next year and a consequently bigger revenue.
So, it’s pretty clear why traditional publishers are keen to educate the next generation of their client base as to how precious a thing an artist’s copyright is, and how despicable it is to copy an artist’s work.
There will be a stampede soon when everyone realises option 2 is not too good to be true…
[…] financially as well. The sell-out ‘ultra-deluxe’ version was limited to 2,500 copies, creating revenue of $US 750,000 in just a few hours. Of course, that needs to be balanced against the massive bandwidth costs […]
[…] a $300 deluxe release signed by Trent Reznor that was limited to 2500 copies. That limited release sold out after a couple of days which alone marks this experiment an […]
There is no way that all or even most of the cost is profit. Two high quality books are included, and the box will likely cost a fair deal as well. Of course, the most expensive item is likely the two art prints, which can “cost up to $50 each” acccording to wikipedia: http://en.wikipedia.org/wiki/Giclee
Quinn, good point. There must be significant costs to producing the ultra deluxe edition, even without use of precious materials. But I still suspect there’s a large profit margin. The article you cite says up to $50/print for large format. The prints included in one of the books are definitely not large format.
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[…] the music industry gropes for new business models, the new NIN album presents a very interesting test case: The $300 “ultra deluxe edition” of Nine Inch Nails‘ Ghosts I-IV, limited to 2500 […]
[…] it would appear that they’ve grossed at least $750,000 from the special editions alone. So they’ve all but pirated their own work, and they’re supporting themselves pretty […]
Something I hadn’t thought of until now…
The ultra deluxe was limited to 2,500 right from the start. Is it likely that Arists in Residence paid TR a set fee for the rights to manufacture and sell the ultra version? TR is a known control freak and prefectionist so he would have had final say on quality, format etc but if AIR were able to source materials, use contacts etc to get a better price… ? It’s win-win-win: hard core fans get a pretty slick ltd ed version, Reznor gets a healthy up-front profit on a premium product (useful to cover any outstanding production costs etc) and AIR get a nice profit as well. I have no idea how any part of the industry works so I’m probably just blowing smoke here :)
I do know that they don’t miss you when it comes to postage. I was going to order the $75 version but postage to Australia was 2/3 again of the price. I was going to order the $10 version but postage was more than double again the price. I settled for the mp3s and I’ll look at what the bricks and mortar will charge after its released.
@Mike, it’s true that they won’t be “large format” prints. I think we essentially agree, Trent Reznor is going to make some really nice bank. The problem, however, is that this ficticious $750K number is flying around the internet, and it is just based on false assumptions. I wouldn’t wager a guess as to what the real profit is, but there are significant expenses here, and considering that NIN’s last release used fancy heat-sensative packaging (paid for out of Trent’s pocket, not his lablel’s, sky-rocketting the production cost by serveral factors of magnitude) I am betting the quality of the materials for the limited edition set is going to be higher than any one really realizes.
[…] NIN makes at least 750K in two days via online sales […]
[…] all you nay-sayers that think this isn’t a viable business model, there are posts pointing out the revenue of the limited edition collectors set at $750k (2500 units at $300 […]
@Quinn, keep in mind that the heat sensitive disc cost 83c extra per disc. I agree that this adds up over a multi-million disc release but in the context of the overall price it is certainly bearable. I think we all agree that, despite how much he seems to like his fans, TR wouldn’t have created this version if he didn’t think it was going to turn a profit.
As for the $750k figure, most of the things I have read have been careful in stating that as a gross earning for the ltd ed and not profit. Maybe I’m just reading the wrong (right?) sources.
[…] Link […]
[…] Laut Mike Linksvayer war die auf 2500 Stück limitierten Deluxe-Edition nach wenigen Tagen ausverkauft. Der Umsatz allein für diese Edition wären damit stolze 750′000 Dollar. […]
[…] gondwanaland.com und […]
[…] su nuevo album (o mas bien compilación) Ghosts I-IV bajo licencia creative commons (CC). Según el jefe de tecnologÃa (CTO) de CC, bajo este esquema sólo tardaron 2 dÃas en ganarse 3/4 millones de dólares, vendiendo ediciones […]
As good as this initially sounds, and this is strictly an observation, is not feasible. NIN, and Radiohead for that matter, became an established commercial success in an era or traditional product promotion and distribution, one that, inarguably, has passed. He has directly benefited from the fact that his label spent millions on his behalf in promoting him, and has subsequently allowed him to pursue alternative distribution models. But realistically, if Pretty Hate Machine was released tommorow, it would be aimed not at mainstream alternative rock stations but a small, and shrinking, niche market. The paradox today is that we are unlikely to see many younger bands achieve the sort of across the board success that will allow them to release $300 limited edition box sets that effectively fund expensive production and bandwidth costs. So, good for him, but dont expect this to be the “new” distro model
[…] bezpoÅ›rednio do ukochanego twórcy. W efekcie wersja ta rozeszÅ‚a siÄ™ w kilka dni, i wedÅ‚ug kalkulacji Mike’a Linksvayera z CC, przyniosÅ‚a NIN podobny zysk, co hit sprzedany w nakÅ‚adzie setek tysiÄ™cy egzemplarzy, ale wydany […]
[…] Mike: “The ultra deluxe success seems to me to validate the encouragement by some to pursue large revenue from rabid fans and collectors willing and able to pay for personalization, authenticity, embodiment, etc., rather than attempting to suppress zero cost distribution to the masses.” […]
[…] — illetve ingyenesen az elsÅ‘ 9 szám is letölthetÅ‘. Az ultra deluxe edition-t 2 nap alatt el is kapkodták (2500 darabot), Ãgy 750 ezer USD bevétele biztosan van Trent […]
[…] sane use of copyrights and the material that makes us happy. To the future! ::clink of glasses:: 1: gondwanaland.com and additional commentary at […]
[…] Wie Nicole schon richtig erwähnt hat, wurde das neue Nine Inch Nails Album Ghosts I-IV unter einer CC-Lizenz veröffentlicht. Dass so ein Konzept funktionieren kann berichtet auch Mike Linksvayer. […]
[…] of goodies that sold out in two days. That’s right SOLD OUT in two days. This garnered a neat $750,0001 from those alone. In the first week the bands total transactions were up to $1.6 million2. Most of […]
[…] a $300 deluxe release signed by Trent Reznor that was limited to 2500 copies. That limited release sold out after a couple of days which alone marks this experiment an success. Tags: music, Music […]
[…] MIN US$750k for NIN From Infomationweek He also licensed Ghosts I-IV, a 36-song production, under a Creative Commons license that allows fans to copy and distribute the music they buy. […]
[…] MIN US$750k for NIN […]
[…] note how the rich people profit in both scenarios: they always pay less then they could (or should). this is probably why the distribution model the Nine Inch Nails used for Ghosts I-V worked so well. […]
[…] of a pretty good lecture on successful “music” business models based on the success of Nine Inch Nails’ Ghosts I-IV and other efforts. Earlier today I praised the lecture on the Creative Commons […]
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[…] products (eg, personalized, autographed posters included, limited editions etc). Check out what Nine Inch Nails have done to see the power of […]