The opening day of MidemNet, the two-day conference in Cannes dedicated to the digital music business, dedicated several panel discussions to the means of monetizing the artist-fan relationship.
Judging from Nine Inch Nails' direct approach, based on a compelling presentation by Techdirt blog editor Michael Masnick, it can be a lucrative opportunity for established acts.
During his Trent Reznor case study, Masnick revealed revenue data on the "Ghosts I-IV" album, which was available at various price points, beginning at $5 for a download. A free version was also legitimately available, while a deluxe package cost $300 and was limited to 2,500 copies.
Masnick said the $300 edition sold out in 30 hours, grossing $750,000. He added that revenues totaled $1.6 million in the first week, noting that this was "for music that they were giving away for free with no record label."
Even though it was available for free online, the $5 edition became the biggest-selling download of the year at Amazon.com. "Price is not the issue, as long as you can connect with the fans," said Masnick, who described Reznor's willingness to experiment with releases and the richness of the related material available online.
The role of ISPs in monetizing the artist-fan relationship was also explored in Cannes. Research company the Leading Question released survey results showing that 46% of 1,300 respondents in the U.S., U.K. and France chose ISPs as their preferred music service provider. That compared to 10% preferring cable/satellite TV providers, 5% opting for mobile operators and 3% naming handset manufacturers.
The Asian biz also came under scrutiny at day one of MidemNet. In an entertaining keynote session, Korean artist/entrepreneur J.Y. Park, president of JYP Entertainment, enlightened the audience on how he has created a new breed of pan-Asian superstars.
Park, who has launched the likes of Rain and the Wonder Girls to multi-media stardom under the banner "We don't make music, we make stars," predicted his business model -- which relies upon touring and brand endorsement income rather than album sales -- would soon become the global norm.
He has academies in New York, Seoul and Beijing where hopefuls are trained in singing, dancing and acting, as well as being taught languages and even acrobatics.
"Since Michael Jackson and Mariah Carey, there are no global stars," he claimed. "Look at the revenues Justin Timberlake or Beyonce make in Asia and you will be surprised as it's close to zero. Every country has its own version of those stars. My goal is to create a global star like Michael Jackson but to do that you have to speak their language. So all my artists speak at least two languages."
Park is developing a TV project with movie producer Lawrence Bender to launch his girl group the Wonder Girls in the United States, while Rain has successfully transferred his acting career to Hollywood with a role in "Speed Racer."
Park also said the Chinese market was a big money-spinner for his artists.
"The market is not well copyright protected," he said, "but as long as the artists travel it's one of the biggest markets in the world. The income is all from touring and endorsements but the revenue is really big. Send your copyrights to Japan, but send your artists to China."
MIDEM, the international music market and conference, begins on Jan. 18.