Techdirt’s Michael Masnick has put together a case study on Nine Inch Nails’ business model and gave an excellent presentation discussing his conclusions. Throughout the video he argues that the new music business model comes down to this formula:

Connect With Fans (CwF)
+ Reason To Buy (RtB)
= The Business Model ($$$$)

Masnick exemplifies Trent Reznor’s tactics in relation to his equation:

1) NIN ‘Connects with Fans’ (CwF):

• NIN dropped a USB stick with a new NIN song in the bathroom at a NIN show
• NIN highlighted letters on the back of a NIN shirt that led fans to the secret site (iamtryingtobelieve.com) where they could take part in an alternative reality game
• Reznor leaked their own music on BitTorrent sites
• NIN made their 2008 release The Slip available for free – the release coincided with an announcement for their upcoming tour
• Information visualizations were made available, mapping where NIN fans who downloaded The Slip were located
• The NIN site aggregates Flickr photos and YouTube videos tagged by fans
• The band released 400GB of live HD concert footage for fans via torrents
• NIN gave away free concert tickets in a cryptic treasure-hunt game, for example one fan found tickets in an Los Angles drainpipe

2) NIN Gives Fans ‘A Reason to Buy’ (RtB):

• The Year Zero album came with a color changing disc – something that can’t be replicated by an MP3
• Ghosts I-IV was a free download, but NIN also made available 2,500 copies of a $300 “Ultra-Deluxe Limited Edition Package” that included two CDs, a Blue-ray disc and other goodies all in a package signed by Reznor himself. The package was a huge success and all 2,500 sold-out within two days, amounting to $750,000 in sales.
• NIN has connected with their fans to such a degree that NIN fans respect Reznor and want to support his initiative. This can help explain how Ghosts I-IV brought in 1.6million in the first week and was Amazon’s best selling album of 2008.

It would be great to see more case studies like this being written about musicians that follow the CwF/RtB logic. Masnick believes this model can and is working for both large and small musicians – he doesn’t mention any of these findings, but additional case studies can be found on the Creative Commons website. In conclusion Masnick adds, “there is a lot more music to be made, a ton of new fans to make very, very happy — and, yes, through it all, an awful lot of money that can be made as well.”

Almost a year ago Creative Commons launched the Case Studies Project with the aim of qualitatively measuring the impact of CC licenses on the world. The project lives on the CC wiki and everyone is invited to contribute by adding “interesting, innovative, or noteworthy uses of Creative Commons.” As of this writing, the project showcases around 500 Case Studies of people using a CC License for photography, music, film, literature and education.

Unfortunately, the CC wiki (IMHO) is slightly awkward to navigate: you can browse through the case studies, but since most of us aren’t looking for a specific case study it is difficult to get an overall impression. Luckily, Creative Commons Australia recently completed a book entitled Building an Australasian Commons that highlights sixty-five of the case studies (a pre-print PDF version of the book is now available online). Building an Australasian Commons is an amazing first step for aggregating this information and presenting it in an easily digestible and persuasive manner. The 195 page PDF lifts the project from the website, and with the magic of good design techniques, reworks it into something that tells a larger story – and something that is fashionable enough to put on your coffee table.

How To Improve the Case Studies
In order to spread CC beyond the walls of the free-culture movement and into mainstream society CC needs more evidence that demonstrates whether it has been successful for artists. So in addition to the book, what other ways can the case studies be presented such that they have the power to influence the general public?

Is there additional data that we could be collecting from the CC licensed artists?

The first thing that comes to mind is that the case studies need to include more hard data about artists’ income and listenership. Among the participants in the music study, a few of the more generous participants have disclosed the following:

• Nine Inch Nails provided some of the most detailed information on their pricing model and revealed that they took in 1.6million in the first week from sales on their website.
• Musician Jonathan Coulton was “unable to give statistics” but did say that 45% of his income in 2007 was from paid digital downloads.
• Jamendo, the online music platform promoting CC-licensed music, has made all of the site’s donation statistics publicly available. Economist Aaron Schiff tabulated the data and published his findings that, “Over the 22 months there were 1,454 donations made, for a total value of US$21,150. So each artist is receiving very little money, if anything.”

While these numbers are interesting, they aren’t enough to conclude anything about the Creative Commons licenses as a whole. For instance, there isn’t a constant metrics that I can rely on to make comparisons between the musicians. And further, how can I relate these results to musicians that aren’t using a CC license?

As a parallel think about how Billboard Magazine has been reporting on album sales and popularity for the past 60 years. Their rankings are publicly available and provide the industry with a standard for measurement. What standards of measurement can we use in the CC case studies?

I’d also like to learn if there are people who feel that their work has been hindered by the use of a CC license. What went wrong? What can we learn from this? Considering that the only “negative” conclusion was drawn from one of the few participants that had disclosed the largest amount of hard-data (Jamendo’s finding that “each artist is receiving very little money”), there hasn’t been enough research into the true consequences of using a CC license.

If CC could collect more data about each musician then perhaps the “musicians, music professionals and record execs” (Billboard’s audience) would pay more attention. And more importantly, Creative Commons would gain the ‘stickiness’ necessary to penetrate mainstream culture.