I'm not privy to the thought process behind that decision, but the members of the Grateful Dead defined a new business model in their industry. I'd lay pretty good odds that they did it without reading Tom Peters or Michael Hammer. They simply perceived that their revenue model, which depended much more heavily on concert tickets than album sales, was better served by allowing their customers to pirate their content. And as anyone who ever traded a 1977 Passaic, N.J., concert tape for a 1980 Lewiston, Maine, cassette could tell you, the strategy worked brilliantly. Today, we'd call it a customer-acquisition strategy.
Nothing spurs demand more effectively than the threat of cutting off supply.
There's a major power shift going on in the marketplace, and industries that try to stop it with lawyers and court rulings are in trouble. But there's more to it than that. This isn't a small band of back-room bootleggers trying to make a buck at someone's expense. These are your customers. We want to sample and obtain your products in new ways.