Market sentiment: hyper-luxury and Trent Reznor

Rockers Nine Inch Nails have become the first to make a serious profit through selling music wholly online. Radiohead seemed to have proven the online album-sales gimmick was unprofitable.

But Reznor’s new album made money by playing to a particular market: the ultra-rich. His album had a deluxe limited-edition option for $300. This was his predominant profit centre for the entire project.

It makes sense in a nation where 1% of the populace has 50% of the wealth. The bottom 99% will naturally have little discretionary spending power (and will consequently be bargain-hunters by nature), and the top 1% will be price-immune. Look at the telephone number prices that Mr Saatchi pays for random discarded objects which some quick-witted shyster picks up out of the landfill, slaps a label on, and puts in a gallery.

It appears the future of business is to basically ignore the population at large, and create various lumps of “limited-edition” crap to sell to the “high net-worth individuals”. They’ll gobble it up without a thought.

That would would only work for the big names surrounded by hype though. How are the unknown bands going to make money and turn themselves into a big name?

Well, I expect this to be in no way confined to the music biz. I expect this to become a feature of virtually all profit-motivated enterprise.

However, as to music biz, the record companies will continue to generate buzz among the great unwashed as before: by marketing, paying radio and TV stations to play their songs/videos, by getting music magazines and websites to interview and print photos of the bands in the usual straightforward way.

The point is though, they’ll no longer expect to get any meaningful profit from the average fan. Their real paydirt will be from the high net-worth individuals who’ll pay megabucks for mega-priced limited edition stuff.

Presumably concert tickets will reflect this. When I saw the Police last year, there was a particular “special persons’ enclosure” for folk who wanted to be able to see Sting et al directly, without needing to look at a screen.

The future will probably lead to a norm being the band having to meet ‘n’ greet and possibly share groupies with, the HNWIs who’ll get backstage passes for a €800 face-value golden ticket.

I somehow don’t think it’s Bill Gateses and Warren Buffets buying those $300 albums, more like the long tail of a small number of dedicated fans with ordinary incomes. $300 may be a lot to spend on a CD, but it isn’t a prohibitive amount of money compared to the disposable income of most people.

Here’s a good example !! :open_mouth: :open_mouth:

**Nope. Apparently, you encrust your Apple iPhone in about $40,000 worth of diamonds. Amosu’s gone and slathered the iPhone with 420 diamonds, totalling 5.65 carats and set in 18k white or yellow gold, with a choice of white, black or pink sapphires. They are pushing their Diamond iPhone as the “the first diamond Apple iPhone.” It was just a matter of time before the diamond-encursted-mobile-phone craze hit the iPhone.

If you just gotta have the latest and greatest, covered in diamonds and tackiness, rummage through your couch for some spare change - you’re going to need it. This sucker costs $41,225.**
intomobile.com/2007/10/30/di … -time.html

Well, if I was a mad NIN fan as opposed to the lukewarm one I am, and I was prepared to spend €300 on my Reznor-worship, I’d probably opt to see as many of their shows as possible, maybe fly to London to see them.

I’m rather confident that a lot more than 1% of the limited editions were bought by the HNWIs.

I’m thinking people who were fans in the mid 90s, got rich on the Nasdaq and cashed out before the bust. I would expect these to be a significant portion of the buyers.

Proximo, that’s exactly the kind of thing I mean. It used to be that the Victorians’ ivory backscratchers were considered the height of wasteful expenditure.

My favourite one, though is the Russian oligarchy’s love for the special diamond-encrusted 24ct golden ring, for your cigar to wear.