Last night, Nine Inch Nails released Ghosts I-IV, an independently-produced album that is available for download for the price of $5. There are 36 songs in this album, so that $5 looks even more reasonable than ever. For those of you into the tangible, CDs can be purchased as well. Additionally, 9 songs are available completely for free – no questions asked. While this is distribution model is new, it is not new – we have seen it with In Rainbows and Niggy Tardust, each with their own little tweaks on it. However, make no mistake, Ghosts is unlike any other album distribution we have seen.

Up till now, the music industry has either fought or ignored the possibilities that the internet has brought to media distribution and consumption. Ghosts represents the largest initiative (that I am aware of) to harness the online potential to its fullest – from promotion to distribution. I want to go through each piece of the puzzle to explain why I think Ghosts could be the beginning of how music is promoted and sold.

Promotion

As far as I am aware, this album was simply released through an update on nin.com, with emphasis on readers to Digg the release. As expected, the article quickly jumped to the front page of Digg as well as Reddit. This immediately sent tens of thousands of people to the site on a Sunday night… That in and of itself is amazing. The initial social bookmarketing buzz has brought a swath across the blogosphere (3,459 results via Google Blog Search as I write this). From the looks of it, there was no traditional press release for this album, rather a concentrated online-only effort all through free, community-driven channels.

I must admit, I was a little surprised to not see any major social-networking initiatives – for instance, the NIN MySpace page has no word of the release.

Outreach

Nine Inch Nails has used PirateBay for small leaks in the past, but the 9 free songs from the album were released to PirateBay officially through NIN. What has been the scourge of the RIAA has become a promotion/distribution tool for Ghosts. Think about it, buzz is created, appetites are whet and bandwidth is saved. Sounds like a smart plan to me.

The notion of buy-before-you-listen is also tackled with being able to listen to the entire album in what seems to be a random order. This is another huge move towards fixing a major problem with online music distribution.

Sales/Distribution

All sales of this album seem to be through internet channels – either directly from the official Ghosts site or through Amazon. There seems to be no brick-and-mortar component to the sale model – everything is through the browser. Because of this, I am assuming overhead is lowered, hence the $10 cost of a 2-CD set. When was the last time you saw a $10 sticker price for a 2-CD album?

For those who chose the download-only version of the album, there is a 40-page PDF to accompany the music. Once again, digital delivery of a previously tangible-only medium. Nine Inch Nails started doing this with With Teeth, but nothing close to this scale.

Copyright

Of all the areas that excited me about this release, copyright is by far the greatest piece. As expected, all music downloaded from this album is 100% DRM-free, hence the nod to Amazon’s DRM-free structure. Most of us knew that would be the case. What blew me away however was that the 9 free songs released were licensed under Creative Commons Attribution-Noncommercial-Share Alike 3.0. Creative Commons was obviously excited by the move as is evident in their blog post. This license allows anyone to share, distribute, alter or use these 9 songs in any way for non-commercial work with credit given to the artist. That is flat-out groundbreaking.

Ghosts is as much an idea as it is an album

So in review, you have an album which is solely owned by the artist, is promoted seemingly exclusively through online channels, sold and distributed exclusively through online channels (including “illegal” p2p networks), with one quarter of the music both monetarily and copyright free. With the exception of Amazon, the traditional middle-man is completely left in the cold. To say this is ambitious is the understatement of the year. Many of these topics had been address before, but not all at once and not in such an organized manner.

In all honesty, no one knows what the future model for the music industry will be, but everyone knows the status quo will not be it. What Ghosts represents is an artist relying almost completely on the internet as the solutions to what others feel are the problems. Ghosts is not just music, it is an idea of how the entire lifespan of a piece of media could exist. When you see all the pieces come together, it is hard to tell if many ideas were intentionally thought up or just subconsciously come to due to the basic nature of the web. The open-source, free-information model of the internet is spilling over its online boundaries and starting to leave marks on social interaction, politics, and yes, media.

This is why I am so fascinated about this subject. As a design technologist, the web model impacts my thinking and concepting on a daily basis. I have bought into the notion that information is free which is why I release all my code as open-source and free to use. But code is not the only thing that is moving towards and open nature – everything is. From design work to architectural drawings to personal information – I do not see much that will not be covered by this ideological umbrella in the future. This is something we need to be aware of in our work as designers or as developers. Information’s new natural state is openness. We can either fight it, or work with it. Ghosts has definitely put a strong foot in the latter camp.

As if the RIAA did not look bad enough as it is, when you have high profile musical artists that does something this progressive, the organization looks even worse. With a very forward-thinking marketing campaign, allowing the public to freely listen to the album before its release, not to mention absolutely amazing music, Trent Reznor is basically showing the rest of the music industry how things should be done. Year Zero has easily been the biggest music-related event on the internet this year – for good reason. I myself have already listened to the album and have pre-ordered the album and I suggest you do too.

According to this article, Google is planning on making $11 billion in ad sales – not too shabby. It is not a secret that Adsense is a success from many different standpoints. I would definitely like to see online advertising go even further in its usefulness and site-by-site basis, but I recognize how large of a leap Adsense made to online advertising. Old media advertising could definitely use a shot in the arm at this point – and who better to go it than one of the best success-stories in new media. Still, it will be interesting if new media ideas still work in a different medium. Old media definitely will be eventually making the slow transition to new media – perhaps that evolution will take care of the problem on its own.

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A Broken Model

For the vast majority of sites that advertise, there is little to no communication between site and advertiser. The relationship (or lack thereof) is entirely money-driven – the site gets money for clicks and the product/service being advertised gets traffic (and hopefully) revenue. In many cases, advertising works through third parties such as Google Adsense. The site creator and the advertiser do not know (or care) one bit about the other. In this model, advertisers think that the real estate and traffic of a site are its most valuable resources. Advertisers are only going to be willing to pay for what they consider valuable. Due to this perception, many advertisers expect that they receive prime real estate for their banners, links, etc. Advertisers rarely consider how this may impact user experience or the loyalty of a site’s audience. What should the advertiser care, they know nothing about the site to begin with. This revenue-centered model reminds me of the old method of clear-cutting forests. The lumber companies would come in, take all that is valuable, and leave once the land had nothing else to give.

Honestly, how does an ad like this help anyone?.

What is deemed a success in advertising needs a major overhaul. Currently, most advertisers are only willing to pay for a click-through – some are only willing to pay if a specific ad click generates a sale. Ironically, this model only exists on the internet due to its unique ability to track various forms of data. If a company purchases ad space in a newspaper, that company has little to no way of tracking revenue generated directly through that ad. Comparisons can be made from sales before and after an ad campaign, however that still can not directly track one ad’s success. Advertisers are willing to pay through the nose for TV ads, with no concrete guarantee of financial gain. In addition, there is no statistical data to track the percentage of users turned off from both the advertiser’s product and the site which the ad sat on due to its invasive nature. There also are no numbers to determine the negative impact invasive ads are making on a brand. Why is there such a discrepancy between online and offline advertisements?

Put Less Money in the Equation

Money is the root of all evil, even on the web. An advertising model that is solely monetary can bring out the worst in both sides. If advertising is strictly a means to generating short-term revenue, the advertiser could care less about the impact an ad is making on their brand or the brand of the site advertising for them and the site creator could care less about its audience. Advertising is more than just click-throughs and cost-per-clicks. Are a few thousand clicks worth the possible negative impact an invasive ad leaves on both parties? This pressure for return lies directly in the investment made. If less money changes hands (on both sides) this desire for return by any means necessary could potentially be blunted. With asking for less money, site creators could demand more user-friendly ads in both content and appearance. For advertisers, if less money is asked for ad space, they should be much more welcome to less invasive tactics to promote their company/product. With money being less of an issue, community reputation and a genuine desire to work together are a much higher priority for both sides. Both advertisers and site creators should be just as interested in the ad’s impact on their reputation as they are in their bottom line. Just because someone clicked on an ad does not mean it was successful. The motive of clicking should be a much higher priority.

Many advertisers consider a site’s real-estate its most valuable resource – this is becoming less and less true with the evolution of the web. Today, a site’s content and the trust of its audience are the most important resource. Traditional online advertising strip-mines the trust of the audience where greater short-term gains are made at the expense of long-term longevity. With no mutual interest, this type of model seems completely acceptable – that is exactly why it cannot work. As brought up in the previous article, this type of advertising is may have a lot to do with drops in traffic.

No one knows a site’s community like the site’s creator and the actual community itself. Using that model, it seems somewhat ridiculous that advertisers expect good results with putting their generic ads into a site and then expecting the ads to just work. Every web community has its own nuances and personality – ads that work great for site X, could very well fail horribly on site Y. It makes more sense to, at the very least, get know the community before beginning to advertise for them. Much better, advertisers work with the site creator to interact directly with the community – not a company/consumer interaction, but as two communities with similar interests. In addition, instead of insisting on a traditional advertising relationship, a more tailor-made sponsorship could be created to allow site-creators to advertise a product through the lens of the community. Of course, this depends on the site-creators’ willingness to work with advertisers and vice-versa, but there is a very good chance that the product will be much more well-received if the site-creator is endorsing it rather than XYZ Corp shoving it down the audience’s throat.

I definitely understand the concept of advertising across the broadest segment of the population. There definitely are valid reasons for casting a wide net – the only problem is that many times those advertisements are being served to large segments of people who are not the target audience. This wide net can be quite wasteful both in time and money. For many companies/organizations with small to medium ad budgets, that time and money would be spent more wisely with focused ads to a few quality sites than a more vague ad campaign created to work across many more sites. This strategy fits in with creating personal relationships with site creators. If companies are more interested in advertising across only a handful of sites, the incentive to work very closely with those sites increases. The potential collaboration between advertiser and site creator is where special thing can begin to happen.

‘Ads’ as Worthwhile Content

In my opinion, banner ads are becoming less useful by the minute. Granted, I currently have something similar to a banner on this site, but its future is in great peril. Its lack of usefulness will be its demise as it does absolutely nothing for returning users. I would like to think that I would continue to support TerraPass, but it would take the form of something more useful for the audience. Ads do not need to be “sacrificed space”, they can be substantiative writing, content and media or co-sponsored projects undertaken with support of the advertiser. Just for this site, I can think of many companies/organizations where some sustainable ad model would not just compliment the site’s content, but add to it. People make the idea of throwing ads on your site that are relevant to its content seem revolutionary when in reality it is nothing more than common sense. Revolutionary begins when ads/sponsorships begin to improve a site’s experience. As much as it may seem, this is not a pie-in-the-sky idea. Bloggers could work with a sponsor to have co-created content that neither could produce alone. Companies/organizations could have invaluable expertise on a certain subject that could be published through a site creator’s site/blog. Honestly, there are infinite possibilities and services that could develop in the future. For example, ReviewMe is proof that this kind of relationship between the advertiser and site creator is starting to be occur. My hope is that this model will go one step further – with less dependence on a third party to facilitate very temporary ad partnerships. Just like a site’s content, sponsorships should be relatively consistent.

Content created by advertisers has the potential to be taken much more seriously than just your average banner ad. This method could very easily be considered deceptive at best if done the wrong way. However, if the site creator and advertiser are candid about the relationship and the content is genuine, this model can be used to provide valuable and unique content for the audience. Methods such as this rely on a advertiser/content-creator relationship built on something more than just financial transactions. I would love to have design firms write about sustainable design or a hosting company post an article on this site about how they are working to run on clean energy. My expertise in these areas is slim to none, but a common interest in such topics can open up the door for an interesting symbiosis.

A Sustainable Approach

This advertising approach relies on both advertisers and site creators to think about advertising and revenue in a more sustainable manner. Advertising needs to be seen as a partnership where both parties will reap less benefits unless both are equally committed to make it work for each other. In addition, both parties need to come up with a more creative method of compensation. Money alone will not only create the potential for conflict, but ultimately it is just one piece of what is desired. The long-term results of reputation-building and user-first advertising will pay dividends to everyone – it just may not show up instantly. In the end, site creators and advertisers have a common goal – to engage and communicate with the user. That desire for mutually beneficial engagement and communication needs to take a higher priority than sales via ads or ad revenue.

Come back in the next few weeks for the last article in this series on online advertising.

A new Nine Inch Nails album is coming out in April. Thanks to our good friend Kellie, and her great link comment, I learned about a series of abstract websites pertaining to the theme and (from the rumors) storyline of the new album. To say the new album is political is like saying the sun is warm – just a warning to those of you that do not enjoy politics. Yes, I know, this has been done before. Yes, I know, this is a form of marketing. Still, the tone and the way it comes off just seems different than other viral marketing campaigns.

A lot of people are not big fans of viral marketing. I, however, see a great beauty to it. Most viral marketing I have been exposed to is quite creative and engages the user’s imagination. On top of it, it is much less money-driven than traditional advertising methods. With viral marketing, success is dependent on the individual to appreciate it enough to want to share it. Traffic and buzz can be artificially generated, but I have noticed that method tends to fizzle out very quickly if there is not a genuine interest from the public. I rather like the idea of marketing that is depends on the public’s interest rather than cash. I see how this project can turn people off. Still, for myself, I find it absolutely fascinating.

UPDATE – New Nine Inch Nails song found on a usb drive in a bathroom in portugal. This is getting cooler and cooler by the minute. In case the URLs hosting the MP3 die, you can download it from Some Random Dude (sorry, this is absolutely killing my bandwidth).

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Over the next few weeks, I will be writing about online advertising. This article will focus on what is currently wrong with the most common advertising model used online, the second will discuss my opinions on a better alternative and the third will flush out those ideas into pragmatic examples.