At a time when the entire music industry, music label companies and anti-piracy groups are going after torrent sites and illegal file downloaders, it’s satisfying to learn that there is at least one individual who really understands how the Internet works and how to leverage it to their advantage.
In a recent interview to the Times Online in the UK, Lady Gaga says she doesn’t mind people downloading her music illegally. On the contrary, she says it’s good for her career. Hear! Hear! She understands that the money is in touring and not by selling CDs. Musicians get only a small piece of the profit anyway. The larger share goes to the recording industry.
She explains she doesn't mind about people downloading her music for free, "because you know how much you can earn off touring, right? Big artists can make anywhere from $40 million [£28 million] for one cycle of two years' touring. Giant artists make upwards of $100 million. Make music -- then tour. It's just the way it is today."
Similarly, she knocks bands that don't really try to work hard to please the fans, and who just expect them to automatically buy each album:
"I hate big acts that just throw an album out against the wall, like 'BUY IT! F*** YOU!' It's mean to fans. You should go out and tour it to your fans in India, Japan, the UK. I don't believe in how the music industry is today. I believe in how it was in 1982."
Like Mariah Carey, it looks like Lady Gaga has realized that this concept of Connect with Fans and giving them a Reason to Buy works at the superstar level just as much as it does down at the indie artist level. The specifics of implementing a business model around the concept are very, very different -- but the core concept remains the same. Treat your fans right, learn to leverage what's infinite to make something scarce more valuable, and then sell the scarcity.