Yesterday, we posted a story about the English band Kaiser Chiefs’ new record, The Future Is Medieval, particularly their seemingly “innovative” approach to its distribution. Released by surprise today under Polydor, a subsidiary label of Universal Music Group (making them brothers to Lady Gaga, Janet Jackson, and the Pussycat Dolls), the distribution goes something like this:the fan is billed as “the producer,” wherein the fan customizes a package of half the albums songs to buy for £7.50, and then sells that package to their friends, netting them £1 in the process.
Instead of calling them “producers,” however, Polydor should probably be calling these new fans-in-action “privateers.”
According to the The Wall Street Journal story, Ricky Wilson of the Kaiser Chiefs “hatched the scheme ‘over a drunken night in a fish and chips shop’ with a friend, Oli Beale, who works in the London office of Portland-based ad agency Wieden & Kennedy.” As many people have pointed out in the last 24 hours, there’s more than a passing similarity between the supposed product of Wilson and Beale’s drunken chip-shop brainstorm and Chris Holmes’ The Privateer Manifesto, which was first published by The Daily Swarm earlier this year.
Now, we might have simply remained slightly bemused at the irony of a possible solution to a crisis of misappropriated intellectual property being misappropriated itself by one of the very artists Chris is trying to help be self sufficient. However, as usual those major label tools got it all wrong, even as they try to hijack yet another innovative idea as their own.
Back in February, The Daily Swarm published a long treatise from Chris Holmes, a musician, producer, DJ, songwriter, “iconoclast, thinker, and doer in the music industry.” Holmes had some great insights into the music’s current situation, and a radical attempt at a solution – or a salve at least – that would invert the old paradigm, and turn all those pirates into profit-sharing buccaneers. He wrote:
This is a call for open source collaboration, to build out the model and spread the word. We can all be our own record store, bookstore or movie store; in that individuality, we are guaranteed diversity and support of the arts. Fans need to know that the money they spend on the arts goes directly to the artists they support, and this process should be as transparent as possible. People who are doing the work of promoting and sharing that art need to be rewarded; as such, diversity is guaranteed by the proliferation of stores based on a wide variety of tastes and interests. No longer will it make sense for a store to feature the same ten mainstream artists on their blogs and stores because a million other stores are hosting the same thing. People must be encouraged to explore and find new material to bring to other people, and artists will then be encouraged to take chances and develop their own style and fan bases. Together, we will flourish as we pull back from the brink, but only if we can invest in a new model that addresses these concerns. The name I have chosen for this model is “The Privateer System.”
That name is based on the historical decree of the British Crown legitimizing piracy, so long as it was for the benefit of the crown. With The Privateer System, I am suggesting that as artists we do the same with file sharers and bloggers. The Privateer model provides a mode where tastemakers and file-sharers are rewarded and their contribution is encouraged, rather than in the current model, where they are looked at as a cancer that is eroding the system. We take that system, legitimatize it, and help the people doing the heavy lifting in the spread of music make a profit, all while making a profit for artists. As Privateers, we, as artists for the arts, can create a symbiotic system where fans can support the arts, and artists can blossom. We have taken a lose/lose scenario for the artist and the consumer and turned it in to a win/win: creativity can flow, and tastemakers can be rewarded and incentivized for turning people on to cool stuff. This model also works with film, books, music and any digital media. It is not a total solution, but it is a start.
Starting to sound familiar?
The Privateer System essentially offers an added source of revenue that has gone uncollected, and has basically been written off as the cost of evolving technology. We capture that revenue by appealing to people not to act for the common good, but instead by appealing to their own self interest.
(The prices in the following examples are arbitrary; in addition, the margins at each level can be toyed with by the artist/label as they see fit.)
1) An artist/label sells its record directly to the public through a The Privateer System website for $10.00.
2) Any party that buys the record directly from the artist/label we will call a “primary buyer.” The primary buyer receives a license and a Java widget with their purchase, enabling them to sell digital copies of the record for $7.50; $5.00 of that sale price goes to the artist/label, while $2.50 is profit for the primary buyer.
Holmes goes on to lay out more steps in the process, all of it designed to help bands at a grassroots level.
Now we know that copying is the sincerest form of flattery, but somewhere along the way they lost the plot. The Privateer Model is appealing because it makes the artists and fans direct partners; the Kaiser Chief’s major label marketing gimmick version simply screws the band in a new way.
The band knows it:
The Wall Street Journal:
Mr. Wilson demurred when asked to compare the band’s cut of each sale with the sellers’. Mr. Beale says, “The fan is actually doing better on the deal than the members of the band.”
Universal, naturally, can’t not openly gloat:
While such experiments are often perceived as acts of defiance against record companies, the Kaiser Chiefs’ label has fully supported their plan, especially the revenue-sharing aspect. “Picking your own tracks is exciting, but not game-changing. The money-back thing makes a record company look like we’re actually thinking,” says Jim Chancellor, managing director of Fiction Records, a division of Universal Music Group, who oversaw the project.
“I don’t think we’re going to be making anyone millionaires,” says Mr. Wilson. “But we’ll be showing a different way that the industry can involve the fans.”
Thanks buddy! So far, neither The Wall Street Journal, Billboard, or Bob Lefsetz noticed the clear and vivid similarities between Chris Holmes’ Privateer Manifesto and the Kaiser Chiefs’ recent gambit. Chris Holmes did, however. The Daily Swarm recently obtained an email Holmes sent to Lefsetz in response to his post on the Kaiser Chiefs’ new release strategy. It reads, in full:
similarities between kaiser chiefs model and privateer model are too similar… ...to be a coincidence.
I don’t know if you ever read the piece I wrote for dailyswarm.com on the Privateer System. It is something I’ve been working extensively on over the last 3 years (certainly not something whipped out over fish and chips) and the similarities between the Privateer System and timing of the kaiser chiefs “novel” idea are overwhelming. I’d like to think that great minds think alike, but…
I explained my model in great detail in the article, and I was shocked when several people familiar with my essay forwarded the Wall Street Journal article to me this morning.
While I intended the Privateer System to be an open source idea, it borrows heavily from game theorists NYU‘s Bruce Bueno De Mesquita MIT‘s Riley Crane. I had hoped that by publishing my essay the ideas would be debated, tweaked and evolve as an open source system by artists and fans for artists and fans.
It was not intended to be used as a marketing gimmick by major labels to show that they are forward thinking, as they face the death knell of the “last deal” of iCloud sharing, and Spotify. These are systems that benefit the telcoms, tech companies, major labels, and stockholders but not the artists or fans. They won’t trickle down money to the artists and certainly not to the fans that have created the new filesharing networks and blogs (doing the work of the old model marketing, distribution and pr).
The entire point of the Privateer System is to create a sustainable model not only for music, but for all digital media from movies to books to video games.
The idea is to legitimate the people committing the bulk of the music and video filesharing (now working outside the system) and make them a part of the economic process by incentivizing them to be a part of the system. Similar to how the British Crown embraced Pirates and made them Privateers, The Privateer Systems seeks to take tastemakers and filesharers and embrace them and the powerful networks they have built.
It is so much more than just a way to get people to take notice of a bands new release or give them a discounted price on that new release. I feel that may be lost with the Kaiser Chiefs and Universal co-opting (or for the benefit of doubt coming up with a very very similar) idea.
This is a big concept, and it will take a lot of work to develop it is as a sustainable model, hopefully the Kaiser Chiefs release can help establish this, but the similarities (down to the cost point of $7.50 I use in my example to 7.50 lbs they use in theirs) should definitely be pointed out, especially when being championed in the Wall Street Journal and your highly regarded newsletter.
Anyway please take a look, I think there are too many similarities between the two systems to be a coincidence.
Hilariously, the Kaiser Chiefs’ claim that they came up with their release idea over an intense late-night discussion over fish and chips also seems a bit… familiar. In a widely-reported anecdote, Radiohead’s manager Chris Hufford also had a similar passionate, addled, late-night conversation about digital releasing with artist Millree Hughes that led to the groundbreaking release strategy for In Rainbows (Billboard reported one version of this story in a January 12, 2008 article, while Rolling Stone reported Radiohead’s managers “were a bit stoned” when they developed the In Rainbows idea).
Apparently, whenever a band from the U.K. develops a new digital release mode, this is the way the process goes to get there! (Note to Silicon Valley: stock up on lager, potatoes marijuana, and cod!) By now, we’re used to British bands taking Radiohead’s innovative ideas and claiming them as their own; what we’re not used to is them reaching across the pond and doing so to thinkers/musicians like Holmes. Of course, that is the beauty of the Internet, isn’t it? That “revolutionary new idea” is just one URL click away…
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