What has long been a theory of the changing music industry is that “jam bands” – bands that adopt an improvisional style that make each show unique – should have a strategic advantage adapting to the new economics of music.

This is because by adding value to the live show experience, fans would be more likely to pay to see multiple live shows and would be more likely to purchase recordings of those shows (since they are all different).  With regular studio albums becoming less of an income stream, such live show value has achieved hightened importance.

As many people know, the “original” rock jam band was the Grateful Dead.  And although pre-Internet, their experience and new business thinking for the time continues to be studied, and remains highly relevant.

A recent book titlted Marketing Lessons from the Grateful Dead highlights the Grateful Dead’s creative business approach, and a recent blog post on OnStartups.com posted certain aspects of this book at is relates to start up companies. 

Some excerpts from the book, as taken from OnStartups.com:

Before the Internet, bands promoted their new albums by scheduling tours across the U.S. and around the world. Fans paid huge bucks to attend sold-out shows where they were treated to pyrotechnics, light shows, and of course the music. Concerts were the same every night and included the bands’ “best of” songs, with cuts from the new album mixed throughout the set. The goal of these concert tours was to sell as many records as possible to ensure your album went gold, platinum or multiplatinum.

Doing concert tours to promote these moneymaking albums was the fundamental business model for bands, the record labels and sundry hangers on. The Grateful Dead turned this business model on its ear: rather than focus on selling albums like other bands, they focused on generating revenue from live concerts, and in doing so created a fan “experience” that was unlike any other. Because the concert tours themselves were the main source of revenue, the Grateful Dead ran their concerts in a very different way from other bands. For example, each show had a unique set of songs and each song was played in a unique way, giving fans a strong incentive to see the show for several nights in a row (or weeks, months or years) because every night you were treated to a different musical experience. This is the exact opposite approach taken by other bands.

From a technology perspective, this approach continues to make sense since now fans now have many options: (1) attend live shows, (2) purchase the show online soon after it is completed, (3) watch a video stream of the show, and/or (4) purchase other accessories such as iPhone applications that enhance the overall musical experience and connection to the band and the community. 

As a video streaming example, String Cheese Incident recently launched a video streaming option to their recent tour.  (CNN has also recently covered the topic of live music and the web.)

Moreover, well known jam band Phish has a $4 iPhone app that includes a live radio show, streaming of recent shows and streaming of archive shows, as well as simple options to purchase recent shows and listen to them wherever you access the app (i.e., it is with you even if you are not with your computer or other device that holds all of your music).

But aside from the technology aspect of how to best utilize and monetize the live show experice, the important take away I have from the advice from the Grateful Dead article is to be creative, be yourself, and do what you think would be intersting and cool – not because it is a trend or anything like that, but because it is unique to how you want to present your music and art.

The last line from the excerpt above is what rings true to me – This is the exact opposite approach taken by other bands.

That is what the Grateful Dead did at a time when no one knew for sure if it would work, and fortunate for them it worked on a grand scale.  But had the concept not been as financially successful as it was, I think they would have been just fine anyway because they were doing something in a way that made sense to them and their fans.

While String Cheese Incident and Phish are creatively using technology in ways that may bring more funds to their endeavors, it is also something that excites their fans, and so it is a win-win for everyone.  (Even the article on SCI’s video streaming almost apologetically discusses the charge to fans as necessary to ensure a good experience in video streaming, which is costly and difficult to do properly.)

For the independent musician, perhaps that is the best approach – do it for you and your fans and then hope for the best.

And consider a quote from an interview with John Perry Barlow, a former pre-Dead lyrist and music business expert – “The value is in the relationship between the creator and the audience.”    Put your time and efforts into enhancing that experience.

Another quote I like from that interview – “art is a verb” – meaning the real value in art is when it is created.  After it is created it is an artifact.  Barlow’s take on the Internet is that its value lies in being able to connect fans with the creation of the art in more ways then were ever possible before.

All good stuff to think about in how technology is making that more and more possible every day, and what works for your art and music.