Management Secrets of the Grateful Dead

 

I'm not the biggest deadhead around --I've probably seen fewer dead shows than presidents Clinton or Obama --but I've always admired the way the Grateful Dead cultivated their fan base.  While they really only had one hit record over a career of more than 30 years, they had a cult-like following thanks to their constant touring and a novel approach to live concert recordings.

The Atlantic has recently published an article called "Management Secrets of the Grateful Dead" which covers some of the main points of how the dead grew their audience.  In a model that was prescient to open source software and internet startups, they did so by giving away their core product.  The dead were one of the first bands to not only allow, but to encourage fans to tape concerts and give away recordings:

Much of the talk about “Internet business models” presupposes that they are blindingly new and different. But the connection between the Internet and the Dead’s business model was made 15 years ago by the band’s lyricist, John Perry Barlow, who became an Internet guru. Writing in Wired in 1994, Barlow posited that in the information economy, “the best way to raise demand for your product is to give it away.” As Barlow explained to me: “What people today are beginning to realize is what became obvious to us back then—the important correlation is the one between familiarity and value, not scarcity and value. Adam Smith taught that the scarcer you make something, the more valuable it becomes. In the physical world, that works beautifully. But we couldn’t regulate [taping at] our shows, and you can’t online. The Internet doesn’t behave that way. But here’s the thing: if I give my song away to 20 people, and they give it to 20 people, pretty soon everybody knows me, and my value as a creator is dramatically enhanced. That was the value proposition with the Dead.” The Dead thrived for decades, in good times and bad. In a recession, Barnes says, strategic improvisation is more important then ever. “If you’re going to survive this economic downturn, you better be able to turn on a dime,” he says. “The Dead were exemplars.” 

I'll do a write up of one of my favorite dead albums, Grateful Dead (Skull & Roses), in the coming weeks.  In the meantime, check out the videos from The Dead's  Shoreline concert last year.  

• The Atlantic:  Management Secrets of the Grateful Dead
• Grateful Dead:Official Site, Wikipedia
• Amazon: Grateful Dead (Skull & Roses), American Beauty
• GuitarVibe: The Dead at Shoreline

Comments

[Brian]

Awesome post and article. Couldn't agree more that giving away their live recordings really helped to grow their fan base. Phish does this as well and it also greatly contributed to their growth in the '90s. Not only does it increase their value as a creator but it's also one the most economical ways for a band to produce and distribute a recording of their music. Something that I think a lot of bands should start to embrace.

[John Horne]

Very interesting. I've always thought that bands should give away their studio stuff and sell limited edition recordings and merchandise at shows. Now that the real money is in concerts and mp3s are being pirated, this seems like more of a reality than ever.

[Playing Rock Guitar Blog]

Iron Maiden take a similar stance. Bootleg live gigs are okay to give away but buy their studio stuff.

The Bassist Steve Harris is one the biggest collectors of their bootleg stuff too.

They have also given away free artwork for recent compilations that they know the fans have already bought the tracks for on previous albums.