Why It Makes Sense For Record Labels To Offer All Music Freely As MP3s
from the the-argument-is-spreading dept
We've been making this sort of argument for many, many years, but it's nice to see that it's catching on in a variety of places, including the more mainstream media. Over in the UK, there's a column in the Telegraph advocating that record labels stop trying technological and legal efforts to fight unauthorized file trading online, and instead give away all their music as free MP3s, and focus on alternative revenue streams. The crux of the argument is the same one that we've made over and over again, namely (1) fighting unauthorized file trading is counterproductive, doesn't work and will never work and (2) once you free up the music, there are all sorts of compelling business models you can adopt that can actually help you make more money. The column is a bit weak on highlighting some of those business models, though there are plenty. But, it's still nice to see the concept getting more attention.
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Could be a subscription service
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I agree that an alternate business model should be considered though.
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Lower the price
It seems to me that many people who procure music illegally are likely younger, college-aged, people with limited income. If the labels were to team up with several services to offer inexpensive cloud-based subscription models, I think more people would jump on board.
Sure, there are services such as Rhapsody and Zune Pass, but those are approximately $9.99 per month. I think this is reasonable, but people might be more willing to join if the price were something like $2.99 per month. As a college student with limited income, this price point is much more attractive.
The ubiquity of smartphones and tablets (iphone, android, ipad, etc) make these subscription-based revenue streams much more appealing, even at lower price points.
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The record labels are doomed?
The discredited notion that a musician can do all the tasks that were once handled by managers, coaches, agents and marketing, public relations and booking is sweet but laughable; they have music to write and play, to rehearse, record and perform, the list goes on and on.
As the playing field levels the game becomes more and more about marketing to break out. Think marketing muscle. Yeah. The labels are doomed. :-)
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Support Free Culture!
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inb4 the outrage...
Congratulations on another controversial post bound to attract dozens of AC's who will repeat tired old arguments against every progressive idea you have just because your name is Mike, and this is techdirt. Or at least, that's the best reason I can come up with for all the crap around here everytime there's a post that even hints at the words "record companies" or "free".
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Re: The record labels are doomed?
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Re: The record labels are doomed?
The situation has a lot in common with the transition from mainframe computers to PCs 30-35 years ago. The incumbents have (in theory) the right skills to do the job - but their internal cost structures are all wrong for the new market. Thus it is likely that their place will be taken by new upstart companies (of course most of these will fail in the medium term).
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Re: The record labels are doomed?
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Re: The record labels are doomed?
The discredited notion that a musician can do all the tasks that were once handled by managers, coaches, agents and marketing, public relations and booking is sweet but laughable; they have music to write and play, to rehearse, record and perform, the list goes on and on.
I don't think many musicians actually want to do those jobs - a few do but most are doing it themselves because the existing industry isn't providing the right kind of service just now.
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Re: The record labels are doomed?
Break out of *what*, exactly? The mythical millions that major label artists are alleged to make?
"The discredited notion"
Keep saying it. Maybe you'll at least convince yourself.
"that a musician can do all the tasks that were once handled by managers, coaches, agents and marketing, public relations and booking is sweet but laughable;"
In spite of the numerous musicians who do just that? Musicians can manage themselves, or hire a manager. Same with coaches. Same with booking. Public relations and coaching? If you can't do those yourself, you don't deserve to be heard.
"they have music to write and play, to rehearse, record and perform, the list goes on and on."
Then they can get off their lazy butts and do more. Musicians don't play music 24/7.
"Think marketing muscle."
And how long are the labels still going to have that? Music thrived before the recording industry, and it will thrive afterwords. Anyone who says differently is simply small-minded.
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Addendum
That should say "Same with agents."
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Linkage
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Re: Re: The record labels are doomed?
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RE: THE RECORD LABELS ARE DOOMED?
Well, Sam I Am,crawl back under the rock from whence you came. The courts and the people are starting to wake up to your, the labels, creative accounting and just how much BS their monetary loss claims really are and you've still got the gall to try and claim that the labels are hurting?
The music industry made 15 BILLION, last year, and now your big money execs are starting to shiver in their boots as more and more members of your own organizations are beginning to realize just how big a bunch of crooks are running the RIAA, which according to it's own charter is NOT a lobby group, but IS IN FACT A RECORD RATING SERVICE!!
Nothing more or less, yet you whine and cry when you are basically too damned stupid to realize that your days are numbered as more and more artists whether on FaceBook or MySpace are sharing their music with others around the world without any greedy managers, promotion companies, or phony contracts that deny them their right to earn a living.
Other artists some of them big names in the music industry today are using the net to get their music out there and the fans pay a fair price for the albums, plus those artists have more creative control, which means that they can give their fans what they want, albums with more good songs on them instead of the crap the RIAA members force them to turn out with only one or two good songs on the album.
They can produce, record and distribute their music to a wider audience who respects what they've done and are willing to pay a fair price for the end result.
Consider that next time before you open your trolling mouth and espouse the same old party line of a dying industry.
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Re: The record labels are doomed?
The new ones like Jamendo are the future.
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Why the labels will fight to the bitter end
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Nice
Edit, copy. Edit, paste. That’s how you make a copy of something on a computer; you don’t buy a new version of the file. It’s hard-wired into anyone who knows how to use a PC. It doesn’t matter how many lawsuits you file against grandmothers; that understanding doesn’t suddenly stop when the file extension is .mp3 instead of .doc.
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Re: Why the labels will fight to the bitter end
The ironic part is if they had simply done nothing to try to prevent file sharing, they'd be better off financially than they are now.
Were I a shareholder, I'd be voting out everyone involved, starting at the top. I have no idea how those executives still have their jobs.
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Amusing Example
All-in-all another Techdirt example of "do this because we say so" without a real alternative to the mass revenue streams these companies already have. THAT is why they cling to old models: they work (for now).
When techdirt does provide examples, they are laughable. Three content providers charge money alongside their paper versions and make money: the rest fail.
The internet is much more a destroyer of commercial business opportunities for Media than an enabler. Look at Youtube alone, do you honestly think Youtube pulls in money to rival even the smallest Hollywood studio?
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Re: Re: Why the labels will fight to the bitter end
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Re: Amusing Example
Spoken like a true defeatist.
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Re: Amusing Example
Man. When I started talking about artist success stories they were all small, and people said "well that works for someone with nothing to lose, but never works for someone big." Then I showed how it works for someone big, and people said "that works for someone big because they can afford it. It will never work for anyone small."
It's all bullshit. We've given examples big, medium and small of these business models working:
http://www.techdirt.com/articles/20091119/1634117011.shtml
All-in-all another Techdirt example of "do this because we say so"
Huh. Really? So providing the full economic explanation for why these things work, combined with actual data and studies, backed up with real case studies and examples of it working -- and never saying anyone *has* to do it, but suggesting they might be better off doing so is "do this because we say so?"
Really? Fascinating.
without a real alternative to the mass revenue streams these companies already have. THAT is why they cling to old models: they work (for now).
Except, of course, that we've seen those who embrace this tend to make more money than they did prior to it.. but, hey, details. Anyway, we've discussed the whole "we won't switch until the new models equal the old ones." Historically, that's how you die. If that's how you want to go down, have fun with it. Meanwhile, we'll hang with the folks who are actually making money.
When techdirt does provide examples, they are laughable. Three content providers charge money alongside their paper versions and make money: the rest fail.
Huh. Which ones are laughable? I'd like to know, because we keep hearing more and more stories of people making more money than they ever did before. I don't find that funny. Perhaps you can enlighten us.
The internet is much more a destroyer of commercial business opportunities for Media than an enabler.
Yes, just as the telephone was more a destroyer of communications business opportunities than an enabler.
Good luck in the world, Indy. You're going to need it badly. Meanwhile, I'll be focusing on those embracing these opportunities and making lots of money while doing so. You should try it. Might open your eyes a bit.
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Re: The record labels are doomed?
I'll second the request for a cite here. Who discredited it and when?
More to the point, who says that the musicians themselves have to do this? The point is that they don't *have* to depend on labels to do this for them, they're quite free to hire someone to do it for them if they wish. It's just no longer necessary to depend on an incumbent gatekeeper.
"the game becomes more and more about marketing to break out"
...and why exactly do you think that only record labels can perform this task?
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Curious why you addressed all of indy's points, except this:
"Look at Youtube alone, do you honestly think Youtube pulls in money to rival even the smallest Hollywood studio?"
Perhaps you should offer us your wisdom on why this is so and if it is so, why free content=more money isn't working for Youtube.
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Re:
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Re: Amusing Example
That's very interesting. Hollywood is screaming that YouTube is killing them, and you use them as an example of a business that cannot stand up to any Hollywood studio? Your lack of logic is astounding.
The internet is the savior of the content industries. Hollywood and the record labels have been growing fat on their inefficiencies to the point where it is becoming completely unprofitable to be an artist. Even if you win the golden ticket and get a record deal, the record companies end up with all of the money and all of the rights to your art. It's crazy. The internet comes along and it is suddenly profitable to be an artists again. Just because the big companies that were profiting are losing does not mean the industry is in trouble.
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Re:
Ok, I'll address this one. You think too small. That's not the YouTube business model. They are not trying to be a big record company that funnels all of the money away from the artists.
You need to net everything:
Money has been made by YouTube
+ Money made by the artists and YouTube users
+ Money made from product sales because of YouTube
+ Money made from touring because of YouTube
The entire industry needs to be compared before and after YouTube. We know that more content is being produced. We also know that when you look at the music industry as a whole, it is bigger than it was before YouTube. YouTube and the rest of the industry is spreading the money out across the industry making it an overall net benefit for everyone except the big record companies that were previously taking a huge chunk of the money.
Now, if a company wants to be disruptive to an industry by implementing a business model that causes less money to go to one business (or set of businesses) by causing it to be spread out throughout the industry while adding incentive to create more diverse content, what is the problem?
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Re:
Red vs. Blue.
It is machinima based on the Xbox game Halo, those guy's started fooling around with home equipment and have grown into a full production house, they even managed to build a remote controlled car so they could trash it, really people without money don't do those things. Microsoft let them use the Halo art work and even buy some things from the little company, it all started on Youtube.
The Guild.
Internet phenomenon, is now being fully supported by Microsoft and being hosted on Bing videos, it started on Youtube.
Youtube may not be making money but a lot of people inside Youtube are or else how you explain the
http://www.youtube.com/shows
or the Bing videos.
http://www.bing.com/videos/browse?FORM=Z9LH5
Funny thing though, Google is not investing in production of shows but Microsoft is quietly producing their own content and hosting on their servers.
I think the new channels may be search engines in the future.
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Blind leading the blind
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Re: Blind leading the blind
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Enter Creative Commons
There are many strong cases to do this one of the most significant, in my opinion, that of German composer Boris Metzga a.k.a. Comfort Fit.
He releasing his work on netlabels, freely distributing his music while retaining all the rights over it. By using a Creative Commons License by (attribution) nc (only non commercial not for profit use allowed) nd (non-derivatives allowed from the original work) Boris actually retained all rights over his tracks while reaching an wider audience, making money out of live acts and Dj Sessions until he got the attention of some major labels and of Mercedes Benz that invited him to make the sound design for some of their spots.
Today, by using social media, artists are able to reach a wider non-local audience and for that all they need is to be serious about their work. If they are, and if they have the talent, the need no middle man taking a huge cut of their profits.
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Re: Re: Amusing Example
None of these models scale! Trent reznor? A one trick pony online. Scale it out to 10,000 artists. Do you honestly think 10,000 artists will level the success of Madonna, or even Trent? Or that people eventually won't go, hey, I can get this for free, rather than pay, I think I'll choose free. Where are your stories about the thousands of artists that are good but don't have a voice or distribution?
"Huh. Really? So providing the full economic explanation for why these things work, combined with actual data and studies, backed up with real case studies and examples of it working -- and never saying anyone *has* to do it, but suggesting they might be better off doing so is "do this because we say so?"
Really? Fascinating."
It really is, because you haven't shown how the model SCALES. Sure there are success stories. The trailblazers in this field might be successful, while 1000 fail attempting the same thing. BECAUSE IT DOESN'T SCALE. Why not show me a singular example of a small or medium business that doesn't involve DRM where the vast majority that enter will succeed without fraud?
"Except, of course, that we've seen those who embrace this tend to make more money than they did prior to it.. but, hey, details."
Details indeed. It's any wonder why you haven't provided any that scale to large numbers of small or medium businesses?
"Huh. Which ones are laughable? I'd like to know, because we keep hearing more and more stories of people making more money than they ever did before. I don't find that funny. Perhaps you can enlighten us."
Consumer Reports, Wall Street Journal, financial times/economist. Again, laughable given the publishing industry has tens of thousands of publications alone employing over 200,000 people. None except these four scale to making money online. And these four still have paper to back them up, and they hold trusted, exclusive information that is incresingly becoming less trusted and more available elsewhere. No project you have listed will work for these companies to make money online.
"Yes, just as the telephone was more a destroyer of communications business opportunities than an enabler."
The telephone did not enable the mass copying of data on the fly. The telephone is point to point, while the internet is P2P2P2P2P2P2infinity.
"Good luck in the world, Indy. You're going to need it badly. Meanwhile, I'll be focusing on those embracing these opportunities and making lots of money while doing so. You should try it. Might open your eyes a bit."
I imagine you write this tone because of the IP lookup on my account and you know where I write from. Don't take my employment location as an indication that I root for any one particular side. I am simply commenting that techdirt has repeated, observable flaws in their "business" methods. It's all well and good to say industry x should do experiment y, but until experiment y pays 10,000 times more and scales out, it's kind've a joke to propose such schemes.
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Re: The record labels are doomed?
Take a look at a major label's MySpace page. Next to each song is a convenient 'BUY" link. Click it - see what happens. You can actually BUY their music. They're even paying those artists to stream that music.
Now, look at an independent musicians page - try to click the BUY link - nothing happens. You can't BUy their music from their PAGE. They are not getting paid for those streams either.
Now, it is true an independent can sell their music on MySpace and get paid for streams. They go to a middleman like Tunecore.com and upload their music from there. MySpace adds the ALBUM to their profile (NOT THEIR PAGE). Now you can click the hidden little Album link at the bottom of their player and go to an Album page. Here the BUY links work. Here they pay for your streasm. Here you can add your music to your page and thye get paid for those streams too.
The fact that the EXACT SAME SONG is on their PAGE player (not the album page btw) is irrelevant to MySpace. You still can't get that BUY link on your main page to work and you will not be paid for those streams. They have NO WAY to let you use those middleman provided copies of the EXACT SAME SONG to work on the artists page player.
The independent musicians is now providing the vast majority of it's fans FREE streams, whcih MySpace runs ads on for PROFIT and is making it incredibly hard to buy those songs they like, so they turn to file sharing to get them for free out of frustration.
I represent a few artists who have dealt with this situation for years. Tunecore can't get MySpace to budge as MySpace bows to the labels. MySpace won't talk to independents other than via their automated email system.
It's basically screw you - we're making money off you - tough. There is no level playing field as long as the major labels exist. They still have all the power and influence and will continue to manipulate the market for their benefit alone.
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