Archive for the 'Currents' Category

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?

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).