Note: This posting contained a major math error. I’m surprised no one commented on that. I’ve fixed the error and added some sentences in light of that. I’ve decided not to uglify this post with strikethroughs (which is my normal course of action) and instead just have this note up front.
Trent Reznor: Why won’t people pay $5?
And then Reznor ended the hoopla last week when he reported on his blog that 154,449 people had downloaded NiggyTardust and 28,322 of them paid the $5 as of January 2. In the blog, Reznor suggested that he was “disheartened” by the results.
So what’s that percentage-wise? That’s 18.34!
In the Days of Yore when there were no home computers and things were done via mail order, I read up on direct marketing (what we usually called back then junk mail). A phenomenal response rate was considered 3%. That’s right: three percent! For a very successful campaign.
Find that hard to believe?
What are the average response rates to direct mail campaigns quoted as at the moment?
Is there anything specific to the test and measurement industry?
Answer:
My industry is Office Products, and 99% of our bsuiness comes from direct mail marketing.
We see a 1% response rate when mailing to Prospects or inactive customers.
It’s closer to 2% when we mail a ‘special offer’ to existing customers. (like a big sale on a specific products line).
In that same thread, here’s someone who got the same Old School education I had:
I’ve been told that a good rule-of-thumb is that 2-3% response rate signifies a successful campaign.
Emphasis added by me.
So, given the historical reality that’s persisted, does Reznor really have something to complain about? He had a sell-through of almost one-in-five people!
Just because this is The Internet, does that mean people will change their natures? That people on the Internet somehow don’t have a level of resistance to a sales pitch?
I don’t think so.
I bring all this up not to dump on Reznor or to ridicule him. I want everyone out there to understand the difference between Internet circulation and percentage of sales.
This is going to be a life-and-death issue for every creator as we vie to try to exist off Internet revenues.
Many people are going to see a sell-through rate they might consider disappointing and become discouraged and give up. That will thin the competition — but in the process some really good people might be scarred by not understanding two key things:
1) Life is hard (harder than you think!)
2) Everything takes time (longer than you can imagine!)
A friend of a former friend was trying to make a living as an actor in Hollywood years ago. He was told by someone with more experience that it’s not the best people who make it — it’s the people who persist. (And I’d have to imagine that the people who persist also wind up being better actors along the way!)
There are many factors that go into rejection or disinterest. They range from trivial factors of everyday life to inexplicable emotional barriers that vary according to personal mood. It does no good for me to provide any sort of list of specifics; it’s best just to take this as a given and not go crazy over it or waste time trying to develop specific strategies to overcome every possibility.
Look at it this way: When wars are fought, it is the broad campaign that’s the focus, not “Gee, as we go into this battle, how will we defeat John Smith, John Jones, John Doe, etc, etc, as individuals.”
In Reznor’s case, there are several questions that need to be asked:
1) How many downloaded and listened to the music?
2) How many listened to one track, didn’t like it, and stopped?
3) How many listened to all of it but didn’t like it?
4) How many downloaded it out of sheer curiosity yet never listened?
5) How many downloaded it for reasons other than listening to it?
And that’s just five questions. Many more can be posed.
Reznor himself brought up one possibility himself:
Yes, there is a possibility that people downloaded it and the same people went back and downloaded it and paid for it and that can throw the numbers off.
There are many, many ways to slice this up. That’s why market researchers and people in marketing departments get paid money. They are specialists at that. Just as every creator is a specialist in his or her individual creativity.
Reznor, however, broaches a subject I have a great big problem with:
[T]he way things are, I think music should be looked at as free. It basically is. […] In my mind, I think if there was an ISP tax of some sort, we can say to the consumer, “All music is now available and able to be downloaded and put in your car and put in your iPod and put up your a– if you want, and it’s $5 on your cable bill or ISP bill.”
Well now hold on right there. What makes music so damned special?
There are thousands and thousands of ebooks out there being downloaded for free — many of which have never been published as ebooks (they’ve been scanned from paper; just ask J.K. Rowling!). I’ve yet to see any writer state that a special ISP tax should be levied for that. The same with photographers. The same with graphic artists.
And this brings up a whole new set of questions:
1) Who will benefit from the distribution of that tax?
2) Will anyone who puts up a crappy track on MySpace be entitled to a cut?
3) How will music plays be monitored? By download? By online play? If by online play, will people be restricted to X number of plays so a script or other method of automation won’t inflate the number and falsely increase someone’s share of the tax?
4) What about music that’s outside the U.S.? What about people who come here from other countries — to live or just to work — who only listen to music over the Internet from their home country?
And those are just four broad questions. Many more can — and should — be asked.
I don’t know what was in Reznor’s head when he embarked on his endeavor. I don’t know what he imagined the outcome would be.
Reznor might have imagined that because he liked something, his fans would. That’s just not so. I can speak for myself here in stating that there are writers whose work I love who have recommended other writers to me — writers I’d already made up my mind not to read, and writers I’ve tried to read but quit before getting through a few pages of their work. I can even speak in terms of music. I loved the now-defunct band Girls Don’t Cry. On their MySpace page, they list The Killers as one of the bands they love. I hate The Killers (I won’t say more than that; it’s beside the point).
Reznor might have been under the illusion that because he was famous and his work was liked that he could do the same for someone else too. That, again, is just not so. I’ve seen famous people promote others they wanted to see succeed and sometimes, for whatever reasons, it just doesn’t happen.
What I’d like to know is:
What percentage of Reznor’s fans — according to the readership of his online presence and according to his physical recording sales — participated in downloading that music? That would be telling statistic in itself. That could bring something approaching facts into play.
If Reznor is looking for elucidation — aside from the historical propensity for certain kinds of sales efforts netting shockingly-low returns that are considered actually successful — he should commission professionals to conduct a survey of his fans.
However, he would probably be disappointed by the low rate of participation in that too!
Welcome to real life, Trent.
Life is harder than you think and things take longer than you can imagine.
For everyone.
Mike Cane 2008 
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