Phish officially ends their seemingly endless hiatus (more like 4+ years) with three shows this weekend, March 6th, 7th and 8th, at their old stomping grounds, the Hampton Coliseum in Hampton, Virginia.
Naturally, this is a highly anticipated event, and tickets have been sold out for months. Thankfully, for the majority of us who are unable to attend the actual concert, Phish is providing free MP3 downloads of every second of music performed this weekend. The band claims their limited-time offer is being made "to show...gratitude to all the Phish fans for their support...", yet the move reveals a keen sense of business savvy.
In effect, the band is adopting a business model utilized by authors, like Cory Doctorow and James Boyle, the comedic troupe, Monty Python, and other bands, most notably Nine Inch Nails (NIN). By giving away content for "free", Phish actually promotes their music and the current tour, and further encourages fans to purchase additional content that is conveniently for sale at the same location where they can procure the free download.
Phish will concurrently allow fans to purchase higher quality FLAC versions of the concert(s), and will eventually sell CD's, packaged with artwork and photographs from the event. Later, concert tee-shirts and downloads of other shows from the tour will become available for purchase. Clearly, the fans will have plenty of options and opportunities to actually purchase merchandise.
The point is that although Phish may be seemingly "losing revenue" and "potential profit" from possible sales of MP3's, the showing of good-faith on the part of the band will only pay dividends in the immediate future. Phish will earn more than it gives away.
The business model works; fans don't simply gobble up free content and then never return to support the artist, or author. The popularity and sales of NIN's album(s), Monty Python's 23,000% sales increase, and Cory Doctorow's "Little Brother" debuting on the NY Times Bestseller list, are three emphatic examples of success.
Hopefully, this model can evolve into the predominant and favored distribution method amongst content creators.