I’ve argued in a number of earlier entries that in an age when fans can get [steal] the product free, artists need to cultivate (seemingly) interpersonal relationships with their fans if they’re going to see income. Social exchange theory offers a nice way of looking at this, so I’m going to get professorial for an entry and lay out why. I’m not going to get professorial enough that I add a bibliography, but if you want references on social exchange, see here.

The basic premise of social exchange theory is that we seek relationships in which the rewards outweigh the costs or, if we can’t have that, where the reward/cost ratio is better than the alternatives. Social exchange posits three kinds of costs each partner in a relationship pays to be in that relationship:

(1) Direct costs: For the fan, this is the money we pay to see a movie, to get cable tv, to buy a cd or a book or a t-shirt or a ticket, etc. For the artist it’s the money spent on recording a record, making a film, etc. The internet dramatically reduces the direct costs to fans, because they can now easily steal the product, but it does very little to reduce the direct costs to artists. This is the imbalance at the crux of all the worries about how artists sustain income in the age of digital reproduction.

(2) Investment costs: For the fan, this is the time we spend learning enough backstory to appreciate the tv show we’re seeing, reading about an artist to better understand the songs or books, reading fanzines, blogs, watching entertainment news shows in order to find entertainment to love, searching for that out of print movie we yearn to see. For the artists, this is the years spent honing the craft, the time spent writing the songs/scripts/etc, the time spent practicing lines, perfecting one’s pitch. The internet makes it easier for fans to find performers that turn them on and easier for artists to reach fans, reducing some investment costs. For artists this is a big advantage of the net — you can reach more people with far fewer investment costs (though the costs of time spent friending on MySpace and the like shouldn’t be underestimated). For fans it makes it easier to find niche artists you couldn’t otherwise find, but it also makes so many more options available to weed through that I’d wager it’s a wash whether investment costs are raised or lowered on account of the net.

(3) Opportunity costs: These are the things we give up in order to have a relationship. For fans, there are all the other activities we’d be doing if we weren’t paying attention to the performer. For die hards, there may be opportunity costs involving the ability to get good grades in school (I had a friend who flunked out of college the first time because she kept skipping tests so she could see her favorite band on tour), to show up to work on time, or in extreme cases, to be there for one’s family and friends. For artists it’s the other kinds of more lucrative employment/income they could be pursuing, the chance to stay at home with the wife and kids instead of being on the road playing half-empty bars, etc. I’m not sure the net does much to alter the opportunity costs for either fans or artists.

And then we’ve got five sorts of rewards against which these costs are balanced. You can also think of these as resources because they are the things we have to offer others that make them want to be in a relationship with us.

(1) Love: This can be defined broadly to include not just affection, but also a sense of being accepted, valued, and esteemed. This is clearly a strong payback for performers, but has not generally been a big reward for fans. Sure we like to think that if they knew us they’d love us, and some artists have done a fine job of making the audience feel loved or respected, but this has not traditionally been very available to fans in the fan/artist relationship. The internet really changes this because when artists blog and participate in online discussion with fans, they are able to convey a direct sense of loving their fans simply by engaging with them in a way that previous media have made much more difficult. By the same token, artists receive more of this because they can see for themselves all the adoring activity that goes on around them if they look at their fan sites (of course, there’s also all the nastiness they have to weed through, but still, there’s no question that the internet can increase an artist’s emotional rewards).

(2) Information: This is getting useful knowledge. I don’t see this as a big factor in fan/artist relationships. The net enables fans to collect far more information about the objects of their fandom than ever before, and the artists have ever more trouble keeping a lid on information they’d rather didn’t circulate. On the other hand, what with ‘crowdsourcing’ and all, artists have more opportunity to use the expertise of their fans in ways that benefit them.

(3) Services: These are the intangibles that we do for one another. When someone sings a song for me, they’re providing me a service. Most of what artists do is provide services. Most of what fans seek is the provision of services. The net offers a new platform for the exchange of services and may up the expectations fans have of what services an artist ought to provide them (for instance, not having an up to date website is no longer acceptable, though still rampant). The net also provides fans with more opportunities to provide services for artists as they build fan communities for them, provide content for their websites, distribute their music through mp3 blogs and other means, code new elements for their games, and so on.

(4) Goods: The tangibles (loosely enough defined to include mp3 and other sorts of electronic files). Fans want a lot of goods and in the pre-digital world, good were the embodiment of services that made artists money. We want objects: cds (sometimes), dvds, books, t-shirts, buttons, posters. We want songs, movies, the things that artists make. Artists don’t ask for and traditionally haven’t received a lot of goods from fans, though there’s always someone sending flowers, baking cookies, painting a painting and so on.

(5) Money: Oh yeah, that. Fans get none. Artists need it if they’re going to make a living doing what they do.

Add into all of this that we seek fairness in our relationships. In economic relationships we try to get the best deal. But in social relationships, we try to get a fair deal. That is why it’s so important for artists to build social relationships with their fans if they are going to get money for what the fans could get free. Our sense of what is fair guides our willingness to pay costs and to offer rewards. This does not mean we expect equal distribution of rewards and equal costs. Most of us don’t expect that our favorite songwriter gets as much from us as we get from him or her. In fact, since there are more fans than artists, fans only have to give a small amount of resources per person. It’s the collective rewards the fans offer that make the artists’ activities worthwhile. Another standard of fairness has been called Marxist fairness. This is the idea that those with the most need should reap the most benefits regardless of their input — this is why we donate to charity, why we coddle sick relatives without expecting the same in return, why we record benefit records for ailing musicians, etc. Then there’s Darwinian fairness, which many fear is operating today — if you can get away with it, you deserve it. This is why people feel okay stealing intellectual property instead of paying for it. And finally, there’s the standard most of us use in our personal relationships — equity, the sense that the rewards should be relative to the costs, that those who put more in should get more out. Equity often holds even when you are getting more than the other person — when someone we don’t do much for showers us with affection and gifts, most of us feel uncomfortable and either seek to do more or end the relationship.

Where does this leave fan/artist relationships? The problem the internet poses is a shift from an equity model of fairness to a Darwinian one on the fans’ part, thereby reducing the fans’ direct costs and the artists’ monetary rewards. This is easy to maintain when the fans feel that the relationship is impersonal rather than interpersonal, that they are seen as interchangable drones around the queen bee artist. But if the relationship is seen as interpersonal, then the norms that govern social exchange are more likely to overtake the norms that govern economic exchange or self-interested Darwinian exchange. The principle of equity suggests that if fans think they are getting a lot and giving too little, they will seek to rectify it by providing more rewards, including money.

So what can an artist do to foster a more interpersonal sense of relationship? They’re already providing services and goods. Information isn’t all that relevant, and the point is not for artists to give fans money. What’s left? Love. Engage those fans, let them know they matter, talk to them, communicate with them, show your respect for them. That’s what the net makes possible that wasn’t possible before, and that may be artists’ best hope for getting paid in the future.