Marketing Lessons from the Grateful Dead: What Every Business Can Learn from the Most Iconic Band in History

Chapter 1. Create a Unique Business Model

Before the Internet, bands promoted their new albums by scheduling tours across the United States 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 that an album went gold or platinum.

Fans bought albums at their local record store, where they would find the list of top albums for that week taped to the wall next to the cash register. For an album to go to gold in 1975, a band had to sell 500,000 records and hit $1 million in sales. To be awarded the coveted platinum certification, bands had to sell one million albums and hit the $2 million sales mark.

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 focusing 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, ...