“Out the box” is one of my worst business catch-phrases ever since I worked for a guy who was a walking catch-phrase dictionary. He couldn’t seem to talk without some abbreviation or acronym coming out his mouth. Regardless, the description suits this case because it’s good to see someone talking about new business models when it comes to music, file sharing, and copyright. The company in question is Nettwerk, run by a Terry McBride, and the model is something he calls “behavioural marketing”.

From the article in the UK Independent, McBride says:

“The music industry went from being a partner and went into the loan-sharking business. In essence they said to artists ‘I’ll give you the money to buy your house and when you’ve paid it off I own the house’. In almost any other business it’s illegal.

We have a band from Long Island called Brand New. We’ve done 50-date tours where we haven’t spent more than $1,000 on all of the tour advertising. We’ve built up a street team of 80,000 kids - they’re organised by street team leaders, depending on the actual city they’re in - and we put a PDF [Adobe Acrobat] file of the band’s poster on the internet. The kids print the posters, put the date on and stick them up around town. We have zero outgoings, the concerts sell out, and we can price tickets at $15 because we have no costs. So that’s behavioural marketing.

If you could buy tracks legally for 25p each, kids can make more money working in McDonald’s rather than spending an hour trying to get their songs via peer-to-peer, getting rid of malware, cleaning up and re-labelling files. This generation is multi-tasking and their time is extremely valuable, and it does cost them money to download from the illegal marketplace.”

Definitely well worth reading the rest of the article. On a related topic, ArsTechnica are running an interesting article about whether the studies on music sharing hold up to scrutiny that’s worth looking at; it demonstrates the absurdity of current copyright laws that classify (at least in the music industry) legal personal-use copies of music as illegal. Of course, the problem of copyright, digital rights management, suing users and other strong-arm tactics is not endemic to just music, but film as well with HD trying to prevent (or even charge) for legal personal copies between different devices.

It would be nice to think that individuals such as Terry McBride will begin to rise up in the ranks of the music industry and change they way they think.