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.

On LiveJournal, there’s a really interesting discussion about Secondhand fandoms, the premise being that sometimes people get really into the fan fiction (aka fanfic for those who are into it) surrounding a tv show without ever having seen the tv show itself. The writers in the thread have a lot of personal examples of how they got into reading fanfic around shows they missed entirely or only saw on rare occassion. One person talks about The Man From U.N.C.L.E. Now THERE was a tv show I loved. I have most of the books and most of the episodes on scratchy old VHS tapes.

The closest I’ve ever come to reading fanfic was some of the alternative storyline suggestions fans came up with in rec.arts.tv.soaps back in the day, which is a LONG way from the kinds of fanfic these folks are talking about, though it was often better than what the soap writers were writing. Maybe some of this blog’s readers could recommend some good starting points for other readers who may be curious about fanfic who don’t really know much if anything about it? I’ll start with a plug for Rhiannon Bury’s recent book Cyberspaces of Their Own: Female Fandoms Online, which I read recently and really enjoyed. Also getting a lot of buzz is Fan Fiction and Fan Communities in the Age Of The Internet, edited by Karen Hellekson and Kristina Busse, which I haven’t yet read.

What shows are inspiring the best fanfic these days? Any good examples to point people toward?

Burnlounge bills itself as “the world’s first community-powered digital download service,” offering its own version of the emerging new music business model starring fans as retailers. See here and here for some cynical takes on this. Joe at spinme.com who used to be sympathetic has also now modified his opinion to “Burnlounge sucks.” Digital Media Wire recently interviewed Burnlounge co-founder Stephen Murray. Here are some excerpts:

DMW: What was the driving force behind the idea for Burnlounge?
Murray: I had a record company with Carson Daly and a couple other people including Ryan Dadd. We were trying to figure out how to market our artists in a new and unique way, using a process that’s always existed, which is friends telling friends about artists they think are cool.[...]

What’s the Burnlounge concept?
What we do is turn fans into retailers. It’s this whole crowd sourcing concept, giving tools and resources to enthusiasts to allow them to become part of the entertainment business, to go semi-pro, if you will.

So for that to occur you need two things: One, a platform, which in this case is a virtual record store. [...] The second thing is marketing resources. We need to give enthusiasts the tools of a professional [...]

So with those tools, how do store owners go about getting customers?
The same way that you already recommend music: you tell your friends about the music you’re into. The difference is you’re not telling them to check it out at another digital music service, you’re telling them to check it out at your own store.

They set it up with three different packages, depending on how serious people are about acting as music retailers. The less-serious models earn credit on all their sales which they can use toward purchasing music in their own stores. The more-serious “moguls” can translate their credits into cash. Minimum earning are apparently a whopping five cents a sale. I’m not sure I’d call this a next-generation snakeoil ponzi scheme, as the Digital Music Weblog has, but it seems like you’d have to move an awful lot of tunes to make it worthwhile.

More interesting than this instantiation of it, is the notion that fans are not just the record store customer, the fan is the record store. It used to be that working at the record store meant you were intrinsically cool (except, perhaps for my own employment at such an establishment for several years and all those bozos who worked at the corporate-owned other record store in town). In the near future will it be running your own online record store that makes you Really Cool? And how will people know you’re the cool kid from the record store when you’re out at the rock shows?

My peeve: just because people connect with each other doesn’t make it a “community.” As my friend Marc Smith says, community is a great term for marketing but a lousy term for thinking. Oh yeah, all the flash on their site is a turnoff too.

But peeves aside, the real question is where the line is to be drawn between Digital Music Weblog’s critique that they (or any other fan as retailer sites) are selling snakeoil through ponzi schemes and a more generous interpretation that they are empowering fans while benefiting musicians. How much money do fans and musicians have to make per sale to make it synergy rather than exploitation? It’s not an inherently bad idea to have fans selling the artists they love, in fact I’d argue it’s an inherently appealing idea. So the issue is what it takes to do it right.

The other day, I wrote about Web2 sites going beyond fan forum sites and becoming objects of fandom in their own right. One very fun example of this is the Flickr group for people who are fans of Flickr. In this group, Flickr users can post their pictures that either include the letters f*l*i*c*k*r or the blue and pinkish colors seen throughout the Flickr site. Fringe? Maybe, but they’ve got 775 members and almost 1000 photographs in their pool.

I haven’t spent as much time playing around with Flickr as I have last.fm, but have generally been impressed with the staff/user communication on the site. They have the usual issues (‘did you change the interestingness algorithm? why?!?!?!’) but it seems to be handled with much less tension than one sees on last.fm, if no less confusion. Plus they’ve maintained a sleek and well-designed interface instead of getting all redesign/overly-complicate happy.

Flickr is also home to a lot of other fan groups, including tons for soccer (or football, pick your nationality), media, and, my favorite: groups for fans of…fans (and I mean the kind that make a breeze, not the kind that cheer)! See here, here, and here. Always been into chimneys with ventilation fans? There’s even a group for you!

In the Chicago Tribune, Greg Kot writes up the recent Future of Music Coalition summit in Montreal. The article’s an astute if not novel analysis of the state of the music business, emphasizing the shift toward lots of bands that sell 100,000 or fewer records over a few bands that sell bazillions. The role of the net, of course, gets a mention, casting online fans as the new tastemakers in place of record labels and MTV:

A new Internet-savvy music hierarchy is being created. Commercial radio, MTV, retails stores and even record companies are losing their tastemaking status, while consumers are becoming de facto music programmers who share information and music via message boards, Web pages, e-zines and MP3 blogs.

In the end, though, Kot returns to the fact that no matter how great this digital revolution may be, ultimately there is nothing that comes close to seeing a band play live:

It’s one thing to hear an MP3 file of a new band like Montreal’s Lovely Feathers, quite another to hear that band perform that same song on stage. The breathtaking intensity of the quintet’s live performance at Pop Montreal made the songs on their latest album sound quaint in comparison.

“It’s hard to quantify how we got noticed,” said the Arcade Fire’s Win Butler. “No doubt Pitchfork had an impact. But who really cares reading an article? It’s the music ultimately. You listen, and you either like it or you don’t. For us, we’ve been so much about playing live and making that connection that I don’t know any other way.”

“Live music,” said former Talking Heads singer David Byrne, “is an experience you can’t digitize.”

I’m reminded of points I made in earlier posts about the Arctic Monkeys and Hawthorne Heights trying to distance themselves from the online components of their success by referencing their touring. These are not either/or propositions — to the contrary, the more fans are digging and distributing a band’s music online, the more people are going to go to the shows and the more merchandise they’re going to buy when they’re there.