Doing business The Grateful Dead way
The Grateful Dead was famous for letting their fans tape their live shows….
The Dead recognized that allowing fans to record for free widened their audience and the band became one of the most profitable groups in history. The band’s lyricist, John Perry Barlow, went on to become an Internet guru.
Barlow wrote in Wired in 1994 that in the information economy, “the best way to raise demand for your product is to give it away.” He explained to Joshua Green of the Atlantic: “What people today are beginning to realize is what became obvious to us back then–the important correlation is the one between familiarity and value, not scarcity and value. Adam Smith taught that the scarcer you make something, the more valuable it becomes. In the physical world, that works beautifully. But we couldn’t regulate [taping at] our shows, and you can’t online. The Internet doesn’t behave that way. But here’s the thing: if I give my song away to 20 people, and they give it to 20 people, pretty soon everybody knows me, and my value as a creator is dramatically enhanced. That was the value proposition with the Dead.”
The Chief has always liked the Grateful Dead from the time of his first acquaintance with them at the time he first entered active Naval service at the (then) Treasure Island Naval Station in the middle of the ‘Frisco-Oakland Bay Bridge in 1967. This is one more reason to appreciate how they operated.
SciFi publishing house Baen Books has gone in the same direction, with a “free library” on many titles available for free download in Mobipocket and other handy e-book formats, with no DRM or restriction on free distribution. On their site they explain their reasoning which runs much the same as Barlows. They also noted that after they put books by an author into the free download library, there was inevitably an distinct increase in sales for that author. They also have very reasonable prices on titles for paid download ($5-$6 typical), especially compared to other sources of e-titles. The Chief uses them on his PDA…who needs a Kindle?