by Sven Triloqvist
Sat Aug 2nd, 2008 at 08:23:23 AM EST
Wired music: New In Rainbows Numbers Offer Lessons for Music Industry
Radiohead's "pay what you want" distribution gamble paid-off despite -- or perhaps because of -- rampant file sharing, according to new analysis from Will Page, chief economist at the MCPS-PRS Alliance, a British rights organization, and Eric Garland, CEO of Big Champagne.
Another nail in the last resting booth of the record industry (as it exists now). A company called Live Nation represents a possible future for the Big Music Business - namely as a promoter of live music events, leaving the artists free to distribute their recordings. But it is still big media business running the show. (Live Nation is a spin-off from Clear Channel Communications)
Radiohead's notorious release strategy for In Rainbows, which allowed fans to download it for an optional price with a valid e-mail address, was considered to have been a failure by some because the album became wildly popular on file sharing networks almost immediately upon its release.
The new model depends on 'audibility' - a version of the old marketing gambit of 'visibility' - where ubiquity affects purchase behaviour.
But Garland and Page's, "In Rainbows, On Torrents" report, slated to be released on the MCPS-PRS website on Friday, indicates that Radiohead's strategy was a success nonetheless, contributing to the album topping the charts in both the UK and United States and a successful worldwide tour. When it comes to judging whether an album is a success these days, the old metrics just don't cut it.
The report found that torrent users traded 400,000 copies of In Rainbows on its October 10 release date, and that it was shared a staggering 2.3 million times by November 3 (chart courtesy of BigChampagne). By comparison, albums by Gnarls Barkley, Panic at the Disco and Portishead released around the same time using conventional means were shared less, the most-frequently shared being Panic at the Disco's album, which was downloaded 157,000 times in a week -- about three times less than In Rainbows' peak day of trading.
The problem for the big music media companies is that their model depends on the elevation of a few artists - that they choose - to superstar sales status. But the model of most music buyers over the age of 15 is to explore music. And they explore until they find something that turns them on. What once happened through a pair of headphones in half an hour a booth in a record store - with no obligation to purchase - has now changed into a 'no obligation to purchase' exploration of almost every bit of recorded music in existence, and, of course, the fragmentation of the genre market to the chagrin of the media companies.
The hard lesson to the music business here is that it must license venues for music acquisition that fans prefer to file sharing networks or otherwise make the toleration of file sharing part of their business plans. If even Radiohead's freely available album was torrented 2.3 million times in the first three and a half weeks, how can more traditional offerings successfully clamp-down on file sharing? They can't, pure and simple.
In addition, official offerings like InRainbows.com need not be considered to be in competition with file sharing networks, as hard as that may be for longtime music insiders to comprehend.
"Frequently, music industry professionals suggest that an increase in legitimate sales must necessarily coincide with a commensurate reduction in piracy, as if this were a fact," says the report. "Yet, the company BigChampagne has made no such consistent observation in nearly a decade of analyzing these data. Rather, it finds that piracy rates follow awareness and interest... The biggest selling albums and songs are nearly always the most widely pirated, regardless of all the 'anti-piracy' tactics employed by music companies. Or, to sum up by paraphrasing an earlier argument, 'popular music is popular everywhere it's popular.'
Which brings us to Equal Dreams.
Disclaimer: a client of mine
Equal Dreams is a Finnish music site launched yesterday, August 1st.
It brings together 3 exchange models: Downloads, Investment and Charity.
- Uploads: An artist uploads their own music (FLAC), adds descriptive information, and decides on the download price of each recording. The service is non-exclusive - you can upload anywhere else.
- Downloads: FLAC or MP3. You can download again if you lose it. No DRM. Payment is fairly easy as ED has built not only a rather comprehensive connection to external banking, but also an account management system to handle profit splits etc.
- Investment: Through something called the Equal Share Offer, an artist can propose a new recording project and invite funding. The artists decides how much money they need, ED calculates the unit price and number of shares - which include 10% fee to ED, copyright fees and taxes. One pre-order entitles the shareholder to download the finished project and also share in the potential profit. Additional shares are cheaper but only produce the profit, if any. An internal communication system allows artists to tell 'investors' how the project is progressing.
- Charity: Equal Aid. ED is working with eg Amnesty International. An artist can automatically share download income with nominated charities.
There are other Royalty Sharing, and Investment models around. ED is the first to combine several functions AFAIK.
My guess is that critical mass will be hard to achieve in the mid term, but if they can promote the site to attract quality new independent music in a large number of genres, an audience might then be available to attract more mainstream artists.
No-one really knows how the 'music business' is going to pan out. All one can say is that people are never going to stop making music, any more than they will stop making love. We won't know which model will 'become popular until it becomes popular'.