The first unit is expensive: Wu-Tang Clan edition

A month ago, the music group, Wu-Tang Clan decided to do something we ‘economics of digitisation’ folks have always dreamed about: they decided to make just one unit of their next album.

The plan is for the album to first make a tour of festivals, museums and galleries (no dates or locations have been set, however), where fans can see the box and hear the music. The group and its producers, Cilvaringz and RZA, will sell tickets for the privilege of hearing the album: Cilvaringz told Forbes that tickets would probably sell for $30 to $50. He added that the exhibitions would have heavy security to prevent anyone from recording the set. (For the less well-heeled, the group is also releasing “A Better Tomorrow,” a conventional album with different material, this summer.)

The website for the album does not list an expected selling price, but the group clearly expects it to be several million dollars. Its rationale, after all, is that while works by contemporary visual artists sell for prices in the millions, musicians’ work is now passed around for free. “Industrial production and digital reproduction have failed,” a statement on the website reads. “The intrinsic value of music has been reduced to zero.”

Of course, there was much discussion that this was unlikely to be a sustainable business model, etc. But it was interesting. Basically, Wu-Tang Clan were making it into a rival good. If it is expensive to produce the first unit and cheap to produce the subsequent ones, they decided to produce just one unit. It is ultimate artistic expression of a dead-weight loss (which would be a good title for an album or band).

It doesn’t stop there. After this museum run, the band intended to sell the album to highest bidder a la a Demsetz auction. Of course, this is just a way of selling the issue of the business model to another person. That person may keep it for themselves or continue the museum model or just release the album conventionally etc.

Any form of rationing or its continued possibility was going to upset fans. So what might you expect fans who don’t have millions to spend to do? They would band together (if you’ll pardon the pun) and form a collective to purchase the album for themselves. And here we go:

But in an effort to free Once Upon a Time in Shaolin‘s music to less-than-rich listeners, two fans have launched a Kickstarter in an attempt raise enough cash so everyone can hear the exclusive double album. The Staten Island rap group’s original idea for the release was to sell it as an ultra-limited edition package after it completes a world-tour where fans could pay between $30 and $50 apiece to listen to it once, in a single sitting, in a museum.

The Kickstarter is trying to raise $5 million. But what is great here is that the Wu-Tang Clan have opened up the possibility for Kickstarter — or crowdfunding — as an alternative business model.

One could imagine that this could be a great way of liberating all manner of media from their intellectual property shackles. This will be interesting to watch.