November 19, 2013 The Cost of Free
By Athena Butler
When it comes to recorded music, today’s consumers enjoy a free ride and seem to have all the answers. Song sharing is there for the taking and, in any case, the old music sales model is archaic. But if out with the old and in with the new is stylish in music, the same is not true of music recordings.
For the business, it seems, free is good. However, the decline of recorded music sales has been catastrophic since 2001, when piracy became rampant and the single song Apple economy banished the album. Now, hope for the sector requires a giant leap of faith. In the meantime, the tough job of finding new ways to compensate for this loss of profits falls to the record companies. It may appear that artists are gaining more exposure as music changes hands often and easily. But is the moneymaking of old within the reach of the business?
In recent years, the recording industry has endeavored to replace its album-based revenue stream with more panoptical and commercial based income. For instance, it has used 360 degree type deals, whose object is to secure additional revenue for the label by tapping on artists’ live performances, branding, and merchandising. This has been seen by some, including well known trade writer Donald Passman, as the cornerstone of an industry response to the crisis of recordings.
What this means for record companies is total alienation from the traditional business model, and near zero emphasis on recorded music and no money for artist development. The supply chain, and especially talent, has been taking a hit, with the U.S., for example, suffering, by any standards, a catastrophic drop in the value of recordings (from $12 billion in 2001 to about $6 billion today). Moreover, successful instances of ‘free’ seem exaggerated and are often only suited for top ranking stars who have plenty of access to multimedia and residual bankroll. Radiohead’s attempt at financing a new release with fan donations in 2007 met with poor results; the band, at the time the poster child for the new music economy, has since regretted the move.
In the meantime, subscription and/or ad-based streaming services deliver poorly for artists–which does not help engrain the concept of music recordings as a valuable commodity for investors or the public. In the clamor for ‘free,’ honest, good work, is getting lost in the shuffle, with the business community oddly silent about the time spent by artists honing their craft, writing music, practicing, studying the music of others, performing, and mimicking until they come up with the best possible material they can muster. Music production, one of the leading edges of our culture, seems to be held hostage to a vague and ill-suited business proposition: that marketing reigns supreme.
For sure, artists end up in atypical situations in order to stay alive and relevant. The public is most plugged into entertainment that promotes an escalating shock and awe standard, and this means that writers, producers, and performers must continue to push boundaries in order to keep their jobs and/or remain in the public eye. Stars like Miley Cyrus and Britney Spears stun the public by baring skin on camera, while lyrics, such as Robin Thicke’s “Blurred Lines,” are used ever more provocatively. Similarly, the media will only sign artists with all eyes and ears on them. Therefore, it is not enough for a musician to be noticed; they must pop-up and make an indelible impression by any means. This was not so when recordings were valuable.
The whiplash of free, in conclusion, may well be the complete erosion of recorded music as a commodity. This is a very steep price to pay for the industry.
Athena Butler is a student at Berklee College of Music. The Cost of Free is from the Music Business Journal’s October, 2013 issue.
Read more:http://www.thembj.org/
@TheMBJ
Endnotes
1. Curien, Nicolas, and Francois Moreau. “The Music Industry in the Digital Era: Towards New Business Frontiers?” Thesis. Laboratoire D’Econométrie, Conservatoire National Des Arts Et Métiers http://www.eeaesem.com/papers/EEA/2005/1142/CurienMoreauMusic2.pdf
2. Cummings, Alex. “Is Piracy Killing Independent Music?” The Brooklyn Rail http://www.brooklynrail.org/2007/12/music/is-piracy-killing-independent-music
3. “Illegal downloaders spend most on music: study” The New Zealand Herald http://www.nzherald.co.nz/technology/news/article.cfm?c_id=5&objectid=10606781
4. Caramanica, Jon. “For Some, Free Music Is an Investment That Pays Off” The New York Times http://www.nytimes.com/2011/11/19/arts/music/for-mac-miller-wale-and-j-cole-free-music-pays-off.html?pagewanted=all&_r=0
Reader Comments (3)
This article is misleading.
Thom Yorke states he regrets the "pay what you like" model in direct response to subscription services. Spotify and the likes have exploited the trend of leisurely payments into an "all you can eat" model. The initial "pay what you like model" can work well (as Radiohead proved) when artist have a platform to deal with consumers directly without a middle man. If each listener has the opportunity to pay what they like, the results can be lucrative.
The fact is, none of these streaming companies understand how to take a great recording and create a some form of sustainable commercial success from it. The proof of that is none of their platforms are built to do that, instead the tools are built for consumers to cherry pick and skim listen. While there are platforms that have features needed for a solution to this problem, there still is no platform that takes every feature needed to create a synergistic solution, displayed on a simple Ui.
The fact is, there's 2 ways to create commerce around a song, the obvious way is to find the best PR team in your demographic, and pay $10,000 a month for the 6 months, and magically, your music WILL get out, you WILL get shows, and your demand WILL increase. Why do you think so much shitty music is on these blogs and has a fan base and starts to appear everywhere out of nowhere? Because these "artists" have money to make that happen, bloggers gotta eat too.
The second way is free music. Free music is like the wild west right now because Napster left a sour taste, and Spotify, Rdio, Pandora, etc.. tried to be the legal version of it, but both models, with all their greatest intentions have done it wrong. The music ecosystem of the future will be based around free music and will actually generate income for artists, while being an easy and totally free experience for all listeners..
While I agree that the price of free is a big one I think it's here to stay and the important thing for people to do is to move forward and learn how to deal with it. I don't have any answers for the 'how' but I'm having fun trying to figure it all out
"The whiplash of free, in conclusion, may well be the complete erosion of recorded music as a commodity. This is a very steep price to pay for the industry."
That's totally true. And there is no way back.