Lady Gaga Says No Problem If People Download Her Music; The Money Is In Touring

from the the-business-model-of-today dept

Earlier this year, we wrote about how Lady Gaga had leveraged free music as a huge part of building up her popularity, and turned that into money via sellout tours and corporate sponsorship. However, most of that article focused on "legal" free music -- such as the songs her label had put up on MySpace and YouTube and elsewhere. But what about the unauthorized kinds? Well, in a wide-ranging (and really quite fascinating) interview that Lady Gaga did with the Times Online in the UK (check it out before they put up the paywall), Lady Gaga admits she's fine with people downloading her music in unauthorized forms because she makes it up in touring revenue:

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.