Three weeks ago, Andrew Dubber once again tackled the question of “Why give music away for free?” on his blog. He earned more than 140 comments. That is a lot. It stirred up the a lively argument between the contributors on more than just one level. Take your time – it is an excellent read.

Here is the comment I added. I left it unedited which means there are a few referers to other people’s comments. Hope you don’t mind. If you like, add your two cents by adding a comment right here (or over there).

Nothing is predictable

So what remains to be a constant in music business? There’s the product, which includes performance & composition. It’s the artists, or more generally speaking, the creative bunch (whomever that will include on the technical side). On the other side of the story we’ve got the consumer. Then there’s kind of a middleware – let’s call it the platform of distribution, no matter how many third party companies are involved (if any). There are rules and a technological as well as a economical framework to deal with the product. This includes licensing & copyright law. Anybody involved intends to get their share of money. Except for the consumer, who’s trying to pay as less as possible. IF he’s doing so.

So everything remains more or less? No, for heaven’s sake – again I’m with Andrew. If anything’s predictable, it’s a multi-dimensional complexity which arises of any constant being altered by a multitude of parameters: technology, globalization, ubiquity, The Long Tail, individual production etc.

Upside down

What’s changing in music (or media) business? Basically, anybody’s role will change – that’s quite easy to see. It’s not only the labels. And it will not change somewhere in the future, it’s already in the making. Be open minded and keep up a good amount of analytical awareness. Your tasks have changed.

Complexity arises from multiple forms of the product’s carrier (media, format, resolution, options). More complexity arises from options in the choice of distribution channels (online, offline, label, portal, aggregator, selling by yourself). Even more complexity arises when it comes to choose whether to add added value (ltd editions etc – see Tom Robinson and Julian). If that’s not enough, you can define the pricing model and strategy as an artist yourself (depends on way of distribution of course).

I guess marketing will become a BIG issue. The so-called web 2.0 applications & social networking is just the very beginning. That’s re-packaging taken to a whole new level way ahead. Now there we are again: The artist has to attract as much attention as possible (see Marcus).

Finally, the discussion above shows two crucial issues: 1) Which will be the source of revenue? (see Tom Robinson) 2) How is licensing and copyright law to be dealt with?

“Physical media = revenue” vs. “virtual media = loss”?

Core of the matter: Once there was a physical object. Now most people are fine with the raw content. Still, there’s licensing, copyrights and ownership which renders content to assets. But, given the political dimension of globalization and technological progress (ubiqitous availability on internet) – however low the price for any content (audio, video, print, software) is, the same content will emerge for zero payment. Apart from legal sharing there definately is piracy. IMO, there’s only one way to dry out piracy: Content is to be offered for free and, most notably, in highest resolution available. If there’s any better resolution legally available on physical media, be certain it will end up on the net.

I know, it’s an extremely painful process to acknowledge this, but otherwise there’s no way to beat the real profit-draining origins. It’s a pain in the ass for creative people. Consumers will get used to it. In the end, there’s one BIG question: Where does my revenue come from in the future? Marius is quite right in pointing out the artist’s main issue: “‘What’s MY model?’ makes more sense to me than ‘What’s THE Model?’”.

The holy grail of revenue streams.

Content might be the advertisement for added value at least in some strategies. Licensing and copyright law has to be seriously reworked (with global focus) (I have to pass out regarding Lessig – I’ll have to read his work first…). The more far your marketing reaches out, the more people are listening to any part of your music – the more likely it is that people (and more people) are spending money for anything you created. Tom Robinson: “And great music will always arouse the same passionate loyalty in their core audience”.

Maybe this is live music or added value in any form. Whatever you’re offering as added value: it has to show your core skills which no one can copy (at least for some time). Whether it’s simply because pirates can’t copy your presence (live music), or it’s physical products which are of high standard quality, or if it’s some nice bundling. Look at which prices fans are willing to pay for limited editions or meet & greets (NIN, Duran Duran, Prince) – that’s the source of revenue. It’s the same artists who tend to give away content of highest quality for free (NIN: FLAC download, Prince: free & new CD). Now there’s much more unknown artists who rarely sell ltd ed stuff. Be creative. See Julian.

Btw, I’m NOT a musician, I’m rather the technology guy driven by his huge interest in music (and music collecting). Since in Germany there’s no legal platform to download high res audio, I have to stick with the usual suspects: iTunes, 7digital, emusic – and real CDs. I’m an afficionado regarding sound & quality. On the other hand, I’m keen to discover new acts. These I won’t find on my local radio. Nor I will find them at MTV (what does that “M” stand for?). Luckily enough I’m still sticking with a 40 DLs per month account (from a previous campaign) at emusic which only costs a mere 9.99 EUR. That’s great. I discovered many artists. And there are more than a few which I happen to buy on CD soon afterwards. Often, I end up buying the same album I already downloaded just for quality reasons!

This text has been published under a Creative Commons BY-NC-SA 3.0 Unported licence. If you would like to make use of the text or parts of it in a way that goes beyond the scope please get in touch with me.