I predict a riot : The Kaiser Chiefs and New Music Business Models

Introducing Tim Kastelle, Lecturer in Innovation Management for The University of Queensland Business School.  Tim spotted a piece of innovation in The Kaiser Chiefs’ new album which focuses on the idea of mass personalisation.  Before we start, let’s see the Chiefs in action:

Tim takes up the story.  I just finished listening to my version of the new album by Kaiser Chiefs, The Future is Medieval, and I have to say that I’m pretty happy with it.  You may well ask what makes it my version?

The thing that makes it mine is that I picked the 10 songs to go on it, I picked the order they’d go in, and I made the artwork. And I guess I’m promoting it now too, even though what I’m really interested in is the business model.

Here is how Mike Masnick describes the idea:

“…there are two key things that the band is doing with this digital (and it’s only digital) release:

Let fans create a “custom” album with custom artwork. The band is effectively releasing 20 songs, and users get to pick which 10 they want, and put them in any order they want — and then they get a custom piece of album artwork, based on the choices. The website is fun to play around with as well.

Then, once you’ve bought the album, you also get a “fan page” for the unique album that you created, and if you drive others to that page and they buy the copy of the album that you created, you get £1 (the full album costs £7.50).

There are some other little features as well, but those are the two big ones. It’s definitely an interesting idea, and I’ll be curious to see how it goes.”

I’m pretty curious to see how it will work too. Masnick has some reservations about the choices that they’ve made – but it illustrates an important point. When you face a turbulent environment, as record labels certainly do at the moment, then you have to experiment with new business models to find out what works.

This is an interesting experiment.

Here is what singer Ricky Wilson had to say about it in an email to The Lefsetz Letter:

“We’re quite excited about this. Why not make an album yourself? We wanted to reward the fans for being our fans and thought this could be nice.  We just sold all our tickets for our first two gigs exclusively on our facebook page, which worked a treat and we’re going to be getting fans to use Facebook polls to help us pick set-lists and stuff. God knows if it’ll work.  We’ve used a load of our own money to hire some really clever people to build the site and market it so we’re hopeful.  This definitely isn’t some sort of two-fingers-to-the-system thing. In fact our label Fiction have been very supportive.  It’s not supposed to be a massive statement to the world or a fight against anything. It was just fun and we needed that to be honest.”

So what’s different from a business model standpoint? A few things.

By getting people involved it changes the value proposition pretty significantly. If you take an hour to put together your own version of the CD, then you’re likely to feel pretty invested in it. In my case, that worked pretty well because even though I love and have bought a couple of Kaiser Chiefs songs, this is the first full CD of theirs that I’ve ever gotten. Marion Gibbon has a good analysis of some of the issues here as well.

The value network is different too, with fans promoting the record (although here is a critique from Dan Catt of that part of the scheme who suggests that this isn’t necessarily the best idea in the whole experiment – something that I agree with).  Editor’s note – by involving the end user in the profits, it may assist in stopping people downloading the product for free.

It’s also interesting to see what hasn’t changed – the value chain that produced the record is pretty standard. The band was supported by their label to go into the studio to make the music, and all the rest of the process right up to distribution is pretty standard. So it’s not a full DIY value chain like Kristin Hersh is using.

I’ve got no idea if this will work or not. But in a sense it doesn’t matter, because once it’s done, we’ll know something about this type of approach. And other bands and labels can try it themselves, or come up with a way to make this business model better.

The one thing that I do know is that if your business model is in trouble, trying out ideas that involve your customers more deeply in the process of creating things is probably smarter than suing them.

To finish, let’s hear a track from The Kaisers’ new album:

Check in with Tim Kastelle’s BLOG, and his work at The University of Queensland Business School.  Oh, yes, and I predict a riotously good time at the Leadership event featuring Bernie Tormé on June 19 at the Hilton Hotel – featured in The Independent  last week.