Making money by fostering emotional ties

Derek Webb is a Christian musician whose records have sold about 20,000 copies apiece. He’s trying to increase interest by giving his CD away on his website, a strategy which may be increasing its sales. His label president describes it as getting “emotional, relational currency” instead of cash:

For Ino Records President Jeff Moseley, the word-of-mouth buzz that the giveaway has generated is as interchangeable as cold hard cash at this point in Webb’s career.

“This is emotional, relational currency that we’re trading for an album, as opposed to dollars and cents,” Moseley said. “We think ultimately that will turn into some type of monetary value.”

Though it’s still too early to measure results, early indications are that the effort is paying off in harder dividends than just warm-and-fuzzy feelings among Webb’s relatively narrow fan base.

On Wednesday, Moseley said that he’s seeing anecdotal evidence that Webb’s weekly album sales of about 300-500 are actually experiencing significant percentage increases in the week following the launch of the free download. Official data is not yet available.

And Webb reports that merchandise and CD sales doubled on the road following his announcement to give away the album for free download.

John Styll, president of the Nashville-based Gospel Music Association, who has been involved in battling music piracy alongside his peers in the industry over the past few years, said if Webb finds a way to make the model work, he expects other artists and labels to follow suit.

The mystery remains how exactly emotional currency translates into the green kind, but I believe he’s right that it will. Fans who feel connected, who feel grateful, who feel like you’ve been generous with them, are surely more likely to fork over money. The article also mentions another Christian artist, Keith Green, who made “a surprising amount of money giving his albums away for free in the 1980s and simply asking for a donation in return.”

Time will tell what the best way to deal with piracy is, but this sort of turning on its head is a creative way to approach it. There’s a nice theory of relationships called Social Exchange theory. The basic premise is that we seek relationships where the rewards we receive outweigh the costs we have to pay. It’s a very rationalistic model and not without problems, but it still works surpisingly well at describing and explaining much of people’s sense of what’s fair and what’s worth maintaining. One of its core premises is that when the exchange is social (versus commercial) it inherently engenders feelings of obligation — you gave me something, I owe you something next time. When I teach this, I often use the example of when you get an expensive birthday present from a friend and next time it’s her birthday you feel obliged to buy a gift of comparable value lest you be seen as a jerk. If we make the musician-fan relationship more social and less explicitly commercial, or if we at least build the social side more alongside the commercial, fans are more and more likely to feel personal obligation to the musicians.

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