Sawce (sôs)

So there was this Canadian study (cited here, here, here, here and well, you get the point) that found people who download illegal music are more likely to buy music as well.

It makes a lot of sense. People download music to discover it. People buy music when they want to support the artist and relate to the music. Its a really important distinction. So important is this difference, in fact, that its one of the fundamental premises behind Sawce (but we’ll get more into that in a later post just before we launch).

If you look at another close industry that has been complaining about piracy for years, I think we can draw a really interesting contrast that vibrates the chord quite clearly (excuse the pun). I, and many of my friends, grew up building websites as teenagers. At first, it was just for fun, and to get into it, we naturally needed to learn to do the graphic design thing. Problem is, the difference between shitty programs (free) and good programs (expensive) was really really big, and we were in no position to spend the few hundred dollars Adobe wanted for Photoshop.

So naturally, because we were doing this stuff as a hobby, we downloaded illegal copies of the program and played with it. Of course Adobe complained that we, and many others around the world just like us, were “costing” the company millions in lost revenue, but any sane person knew that the argument was completely flawed.

The idea of “lost revenue” implies that we would have spent money on the software had we not been able to obtain it by downloading it. However, given that we were hobbyists just wanting to play around, and more importantly, inadvertently becoming hooked on what really is a pretty great program, it really made no sense for us to go out and spend a lot of money that we (as kids) didn’t have.

My point is this: if we couldn’t have obtained the program for free, we WOULDN’T have bought it, so it wasn’t lost revenue. More important, however, is the fact that because we WERE able to download it for free, we played, explored, and got hooked–which in turn created paying customers a few years down the line (now that we actually have money, can relate to the software, and want to support the Artists behind it).

See the parallel?

We’re coming close to being able to open our public beta: from here on out, most of what needs to be done is just tweaking interfaces and writing content. With that in mind, I’d like to start introducing what you can expect from Sawce in a series that outlines our road to launch.

One of the first things I’d like to introduce is the Sawce Widget. Its a pretty core piece of our platform, and I’ll discuss that a lot more in depth later. But as a little introduction to what we’re doing, I’ll start simple. Our widget allows users to promote songs they like on their blogs, social networking profiles, and wherever else they can express themselves online, and if other people buy songs from them, they get a revenue split with the Artist.

As you can see in the screenshot above, we offer a few variations on our widget. We actually let you pick any base color from the full light spectrum, and our rendering engine will actually calculate offset colors from that base as the core style for your widget. But it doesn’t stop there, we also allow users to personalize it even further by loading their own stylesheets straight into it as well–with no restrictions, we don’t even care if you hide our logo, our objective in this is NOT self-promotion or marketing, its about democratized music distribution.

All of this comes from the idea that music is a personal thing, and there is no “one-size-fits-all” solution for distribution and monetization. Letting users express personality through style is one way that we’re working on building a really flexible platform for our users.

We think you’ll really like it, not only can you make it as pretty as you want, but we really made sure to make it as responsive as possible: there is no gooey user experience on this thing.

So, there’ve been rumors about it for a while, and it was really inevitable from day one… Music is an industry of cool, after all, and when it comes to “cool” on the web, facebook is definitely fighting for the title. This recent piece of news is probably the most founded information I’ve been able to find about facebook’s upcoming music platform, which is sad, because it really doesn’t have THAT much, but its a start, and we’ll see a lot more soon.

What excites me about it though, is that if facebook follows its platform strategy nice and strong into the music pages, it could be a very good thing. With variable pricing models such as Amiestreet’s little algorithm, name your price models such as those made popular by Radiohead, and an entire universe of other possibilities that I believe we’re only seeing the tip of the ice berg on, music is really showing that its open to options, and fans are too (especially when it comes to laying out their dollars). And if there’s one thing that facebook’s platform is good at, its providing people with options for doing a vast array of things in a variety of ways (think of all the variants of “Wall’s” there are on facebook).

If facebook lets us provide artists with a variety of options when it comes to selling their music through facebook, connecting with their fans through facebook, promoting themselves through facebook and a whole slew of other things through facebook they same way they have when they let us play around with everything else on facebook, I think this could really be a very nice starting point for the future of music.

But we’ll see how that goes, especially since it looks like the big motive is to start monetizing traffic through their own music sales. Primitive economics made digital… I hope they don’t waste what they’ve got.

There’s a lot of talk about artists being able to fully embrace digital distribution these days by forgetting about record labels and just selling their stuff on their own. Thanks to social networks and blogs, which allow artists to pick up fans a lot quicker, and the ability to easily embrace digital storefronts to sell tracks online and keep a higher proportion of the net, its a very appealing opportunity.

And I totally agree with that. In fact, that’s exactly why we’re doing what we’re doing at Sawce.

However, with Radiohead’s recent release of In Rainbows (which sold over a million copies in the first week with an average voluntary price between $5 and $8, depending on who you read), people are now taking the argument a step further. The major problem that digital presents to the music industry is obviously piracy. Though Radiohead hasn’t dodged the bullet on that one completely (even if they have managed to pocket much more than any other physical release they’ve done), thanks to letting fans pick their price, the argument goes that piracy is getting a little less relevant.

They say that by letting people volunteer what they think the value of the release is, rather than forcing one on them, people will be truthful more than not and actually pitch a fair value at the artist as a thank you for their good work.

And that’s fine, because music really does have different worth to different people.

The problem is this: music is a commodity with nearly infinite supply, and thanks to 24 hour days, 7 day weeks, and the fact that the average person makes money on some time-based denominator (either an hourly rate or some form of weekly, monthly or yearly salary), as soon as money enters the picture, demand isn’t quite so infinite.

My point is this: Radiohead did a good job, and they posted some impressive numbers by following the strategy they did. However, it’d be naive to think that it’d work so well on a mass scale, which is what a lot of discussion is hinting at as the reinvention of the economics of music (at least without some auxiliary stuff attached to it, which is one of the things we also happen to be working on at Sawce).

What they did was novel, not that many other artists are willing to gamble a release the way they did, and though I know a lot of smaller artists have been playing the model, no-one drew nearly as much attention as Radiohead. What they did was a water-cooler topic, and people talked about how much they spent (or didn’t spend) on the album. Music always has been, and always will be a social thing, and because of the buzz it created, it allowed Radiohead to capture a bit of a rent as people took relief in someone big doing something bold.

Fans may have been saying thank you for good work. But in a time where the record industry is pulling some incredibly (and also not-so-incredibly to by fair) haywire moves, its important to try to normalize for all the “thank you” they were getting for the good will (which if what they do becomes the norm, won’t get thanked for quite so often).

Here’s one more thing to think about:

• It was a visible play by a major band
• If it was going to be successful (which it was), fans would be able to expect other bands to follow (and they’d in turn be able to pitch their own prices at a lot more albums, and play the game over and over again, which would often be a lot cheaper than they would’ve been charged at the default rates).
• Enters the incentive to make the test case a brilliant success (which in turn means that the $5 to $8 average sale just may include a little premium from the expected savings that fans might be hoping to enjoy in the future).

The following is an email I scored to my address book in April of 2007. Though the thoughts it contains are raw and are from a completely different space than we’re in today, I think it lays a foundation to what Sawce is really all about. Enjoy.

To all on the receiving end of this email. You’re receiving this message for no other reason than the fact that I was too lazy to blog and felt like having an audience. You might find this message irrelevant, you might not. Maybe you’ll hit Reply All, and we’ll carry on a conversation that everyone else can see, or maybe you’ll make it one on one. Maybe you’ll add a few extra names to the list, and they’ll get involved too, maybe you’ll just follow suit with a whole new topic, and maybe you’ll just ignore it completely.

Whatever the case, sorry if you see this as spam.

Its 11:15PM on a Monday night in April. I’m in the dark side of a kitchen lit room with the TV (which would likely look a blinking blue from a distance) on mute in the background: I didn’t want it to interrupt the song I have playing on loop beside me.

Music has always been an important part of my life growing up. I never really spoke much, and when it came to bonding with people that I really didn’t have much in common with, the room usually went stiff. But music softened things. It set moods, it played emotions, and it made things come alive, even if we never said a word at all. It was the vehicle that let my dad teach me all the things that he taught me during those Friday nights we spent laying on the couch. Its what kept me awake during high school physics class as the kids beside me did the homework that I felt I didn’t have to do, and its what kept me up until sunrise all those nights as a teenager, just long enough for me to learn a thing or two about technology, paint brushes, or grammar. Each event, time and place, tuned specifically to the song in key.

And that’s the thing about music. Its not so much about tuning it so that it sounds just right, because when it is right, its really about tuning you. Music transcends culture. It builds experience. And it carries us all together, because even though the song I have on loop means what it does to me, it means something completely different to you, but if we listened to it together, our differences would get set aside, and we’d come together, at least a little bit.

And that’s what its really all about, more or less. Because the bulk of our experiences with music get branded because of who we come across when we hear it. And the more brilliant the situation, the more vivid the experience, and the more beautiful the girl you happen to stumble across a particular song for the first time with, chances are it’ll mean a little bit more to you the next time you hear it. Chances are, it’ll be a little bit more likely to become one of the things that you’d love to join in on if it came around your way by concert one day.

But here’s the thing. Thanks to the Internet, record companies are complaining that they’re losing tons of money on record sales as people download music illegally.

So enter the fight, stage left, to try and save the day with all these crazy solutions to try to make digital music distribution an economically viable reality. They argue that if you can make songs cheap enough, people would rather pay to download “clean tracks” than scavenge for them off all the peer-to-peer networks that are apparently plagued with viruses and fake files.

Maybe they’re right. Maybe the tradeoff that I make each time I download a file does have a tangible cost that can be offset by some sort of more financially, but less, emotionally(?) expensive alternative.

But if I know myself, I don’t have much trouble finding the music I need for free, and never have, and that emotional expense of viruses and fake files is usually offset by enough people sharing real songs that I don’t come across them too frequently (at least when I download the same song in parallel to make sure at least one of them is decent stuff). And with peer-to-peer stuff coming more mainstream, more advanced, and more proliferated, I don’t see other people really having trouble doing the same.

And no matter how cheap the stuff is, chances are I wont buy it anyways, just because I don’t know what I’m getting into when I download a song for the first time. I go by the batch, of often a couple hundred songs at a time, and at that point, its not so cheap anymore. Music is about exploring new things, and new experiences, just as much as it is about bringing together old ones.

So if they’re trying to do cheap, why not just go all out in good faith and do it free. Or at least free enough to make it make sense. They spend lots on making sure the distribution is in place properly, and even more on marketing artists to make sure they go huge. But why not just let the music do all that stuff for you?

Music wants to be discovered. Music wants to be listened to. And Music wants to be free, at least to individuals.

So why not learn a lesson or two from open source. And this is where my official disclaimer sets in. I have no experience in the music industry, and my knowledge of open source is built upon a bunch of assumptions and experiences I’ve had going through licenses on a very informal basis.

Open source projects let people use the stuff for free on an individual basis. They let people modify it on their own, and even contribute to the base on a distributed and statistically sensible way. But when you try to sell it, usually additional clauses come into play, and free suddenly isn’t so free: its a special right reserved for someone on top.

So what’s the benefit? Users get taught to adopt the stuff and get comfortable with the project in question. It gets scrutinized on a global scale with a lot of the costs absorbed into the clouds, and though a little revenue is lost in individual sales, the savings gained in development, marketing and educating, as well as the rights to do special value added stuff on top of it all, makes it an economically viable business proposition.

Take SugarCRM for instance. I’m free to use it on my own servers. I’m free to modify it for my own purposes. And I’m free to get in touch and start contributing to the code base, report bugs, and strengthen security. But if I try to build a service business offering people hosted CRM applications, then it gets a bit more tricky.

So how does music relate? Music wants to be heard, and people use it on their own to build their own experiences. If you let them listen to it for free, they’ll start weaving it into their lives, and if its good, they’ll start telling their friends about it, and it’ll spread like wildfire. Sure, you might lose out on some record sales here or there, but you wont have to push hard to get the stuff out there in the first place. You don’t have to worry about marketing, because if its free, people will find ways to make it explode on their own (and if you can’t see how with all the stuff the Internet does, then go find out), especially because people often listen to music together. You don’t have to worry about distribution, because people will do it themselves. And what you get, as a good artist, is to impact people’s lives in way that’s a little more likely to have them love to join in on you if you came their way by concert one day.

There’s a reason why the Movie industry doesn’t cry quite as hard as the RIAA does when it comes to piracy. They made money long before VHS and DVD even existed, before the whole home movie thing. They always made money with theaters, so even if sales may be dropping a bit with pirated downloads, the industry isn’t in question. Because the box office is just as much about experience (taking a girl out for the first time, getting your first public sexual experience, or just hanging out with your friends) as it is about content, and though you can download content, you can’t download experience, and people will pay for that.

The RIAA, on the other hand, seems to have forgotten about their version of the box office completely, as well as the fact that if you let music do all the A&R and marketing crap for you, and all you do is reserve the right to hold concerts or just license out large scale experiences, the whole financial thing might start to change. This is especially the case if you really start to embrace the fact that its about experience, and that experience doesn’t always require a non-scalable physical artist to be at 10,000 places all at once, as long as you can do 10,000 live video feeds at a distributed concert across the country that can bring people at both ends together for the same track listing.

At least that’s how I’d do it.

Welcome to the Sawce Blog. Over the next few weeks we’re going to start releasing updates and previews of what we have going on as we prepare for launch, along with a little bit of commentary on the radical changes that the connected age has brought to music. We hope you enjoy.