And Here Come The Attacks On 'Free' Economics

from the it-helps-to-actually-understand-first... dept

You had to know this was coming. With Chris Anderson's latest book, Free, coming out shortly, reviews are starting to pop up misinterpreting much of the book, and making bad assumptions that have nothing to do with the book at all. The key problem? People who are so confused by the title that they think "free" means "no business model at all." That seems to be the problem with James Ledbetter, who complains that Chris Anderson is a hypocrite for not making Wired Magazine free. Except... he does. It's free online for everyone to read. You pay for the scarcity -- the paper version (and even that is sold at a subsidized loss and made up by advertisers). If you understood the economic arguments in the book (i.e., free works really well for goods with a marginal cost of zero), then you wouldn't even bring up the issue of Wired charging for the paper magazine. Then there's an angry critique of Free in the New Statesmen, which starts out with a misguided attack on Anderson's last book, The Long Tail, using a single study (whose methodology had some issues) as support. In attacking "Free," the critic uses some guy who generated some computer models that insisted "free" doesn't work. Yes, computer models. With that, apparently, we can ignore reality. Perhaps the problem was with the computer models?

This isn't really a surprise, of course. When it was first announced that Chris was writing his book (which, contrary to the reviews above, is absolutely worth reading), I warned that by calling it "Free" people would, like moths to a lightbulb, focus entirely on the "free" part, and not the actual economic arguments behind it. Just as I had noted in the past that people seem to get screwed up by the concept of "zero," they also get screwed up by the concept of free. It would be an interesting brain scan study to do, but it seems that many people's brains run into something of a "divide by zero" calculator error when they encounter discussions of "free." They get stuck at the "free" part and fail to get beyond it to see how you use free as a part of a larger ecosystem and business model to increase the overall market potential.


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  1.  
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    Ima Fish, May 22nd, 2009 @ 7:22am

    To anyone who thinks "free" doesn't work as a business model has obviously never watched broadcast TV, listened to broadcast radio, or used Google.

     

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    yozoo, May 22nd, 2009 @ 7:34am

    sounds familiar

    "... the critic uses some guy who generated some computer models that insisted "free" doesn't work. Yes, computer models. With that, apparently, we can ignore reality. Perhaps the problem was with the computer models? "

    I wonder if these are the same computer models that gave us the debt backed derivative bond and eliminated the need for due diligence in the financing industry? If wall street really did attract the best and brightest of American education over the last decade (as I have heard said on this very blog). . . well thank god they didnt go into medicine or some other "real" science is all I can say. Imagine what kinda damage these "WunderKidz" could have done there!

     

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    Anonymous Coward, May 22nd, 2009 @ 7:41am

    The free concept falls down and dies when you realize often how much money was tossed out just to make a product free, and how often it comes down to a very few people paying exceptional amounts of money for the sucker product at the end to cover the losses of all of this free stuff.

    Give away 99 cent music that would be purchased by millions, or even $20 cds of music given away for free, with the hope of people buying more and more expensive concert tickets. if you lose millions of music not sold, that money has to be made up somewhere else.

    there are very few true examples out there of where free actually turns into more net money. free is just the easiest first year marketing student way of selling, the concept that overwhelms all potential customer knows by saying "but it's free". People who only want the free and take it make it more expensive for everyone else.

    the funniest part is that chris anderson talks about ad supported free as one of the great models, and yet his own magazine is coming closer and closer to financial trauma because more than 50% of the ad pages have disappears in the last 8 months. He talks a good game, but rarely does it seem to work out. Long tails, anyone?

     

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    Anonymous Coward, May 22nd, 2009 @ 7:47am

    welcome to america

    "Just as I had noted in the past that people seem to get screwed up by the concept of "zero," they also get screwed up by the concept of free. "


    Becuase we were raised in America? We were told by our fathers "nothing is free", you have to earn your place, your have to earn your things and through this process of earning what you need and desire, you develop character and self reliance. This has been the religion of our nation, it is our ethos, our pledge. "Greed is good" . . . right? I mean certainly anyone educated in America in the last 30 years has fundamentally been taught this. The pursuit of profit is the most pure and unquestionable motive attributable to someone in our society. I understand your frustration with the "buzz word" dismissal of ideas, but in this case, free as a business model (I understand the concept of free doesn’t eliminate the possibility of profit over all – but it certainly does per the specific transaction)? You might as well be selling Satanism, there are many people who will actually see such ideas as fundamentally “evil”.

     

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    Anonymous Coward, May 22nd, 2009 @ 7:47am

    I doubt Google would have ever been successful if people had to pay every time they did a search...people would just look for free alternatives.

    As far as the music industry goes, giving music away for free could be seen as just advertisments for concerts and merchanise...and people WANT to repeatily listen to these "ads" and tell their friends about them. This seems like a great business model for artists since concerts and merchandise is where they make most of their money(although maybe so not so good for labels but who really needs a label these days anyway).

     

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    Anonymous Coward, May 22nd, 2009 @ 7:55am

    Re:

    "(although maybe so not so good for labels but who really needs a label these days anyway)."

    This is the part that seems so often missed to me. There seems to be some idea that a business model that includes record labels must be found and this seems rediculous to me. It would be like saying the modern automotive business model is flawed, becuase blacksmiths can no longer make a living.

     

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    Anonymous Coward, May 22nd, 2009 @ 7:55am

    Re:

    Have to feed the trolls...apology in advance.

    You just don't get it...free isn't the end...determine what you're actually trying to sell, then sell it. Use free as part of your arsenal to sell your product.

    If the product you are trying to sell isn't worth anything (i.e., people are not willing to buy it), then you either figure out a way to make it worth buying or move onto a different product.

    How hard is this to understand???

     

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    A Dan, May 22nd, 2009 @ 7:56am

    Re:

    You can't get people to pay for something that they don't want to pay for. It doesn't matter how much it costs to make; if they don't think it's worth paying for, they won't pay. If you could drive interest in your physical sales by giving away something people don't want to pay for and costs you nothing extra, why wouldn't you?

     

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    Another AC, May 22nd, 2009 @ 8:02am

    Is "Free" going to be free to read online?

    if not, then it seems that this may be a bit hypocritical.

     

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    Anonymous Coward, May 22nd, 2009 @ 8:07am

    Having $5.0MM allocated to accomplish a "small" trial somewhat changes things.

    Hmmm.

    I also count pennies and know how much it costs to press a disc.

     

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    Anonymous Coward, May 22nd, 2009 @ 8:18am

    Re:

    "The free concept falls down and dies when you realize often how much money was tossed out just to make a product free, and how often it comes down to a very few people paying exceptional amounts of money for the sucker product at the end to cover the losses of all of this free stuff."

    which products are you talking about? Music? Software? Maybe even academic research? All of these products can support plenty of staff while having the product itself be free of charge. I'll hit music later in response to your section, but software has support and one off development that brings in an income, and academia has plenty of grants to keep research papers going.

    "Give away 99 cent music that would be purchased by millions, or even $20 cds of music given away for free, with the hope of people buying more and more expensive concert tickets. if you lose millions of music not sold, that money has to be made up somewhere else."

    you're neglecting the money that is saved by not having to create massive amounts of overhead trying to keep people from copying and distributing the music themselves, the money that is save on advertising (word of mouth is still king in many music circles), and the savings reduced for managerial staff that oversees all of the above. Suddenly, the money necessary for distribution, advertising, and Security are dropped next to zero. that is not marginal savings.

    "there are very few true examples out there of where free actually turns into more net money. free is just the easiest first year marketing student way of selling, the concept that overwhelms all potential customer knows by saying "but it's free". People who only want the free and take it make it more expensive for everyone else."

    I honestly think that if Adobe CS3 were able to save more by eliminating the need for so much DRM that they could reduce the base price significantly and reach a much larger audience. Maybe this would be without a net-gain in income initially, however all the industries that use their tools are suddenly very grateful and would not only continue to buy licenses, but start buying more of them. (admittedly, anecdotal, but it's happened before)

     

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    Anonymous Coward, May 22nd, 2009 @ 8:18am

    Re: Is "Free" going to be free to read online?

    Free is a tool...he may or may not employ it to sell his book (if, indeed, his goal is to make money off the book).

    I'll repeat...free is a tool, use it or don't, it's up to you.

     

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    Matt, May 22nd, 2009 @ 8:24am

    Re:

    Hi James!

    You didn't have to post anonymous coward, you know.

    Free does work, as long as you're not retarded. Free can and does and has worked in the past, too.

    Or you can scream how it's unsuccessful, or like socialism, or turn the debate to "WHY DO YOU HATE AMERICA?"

    it's about that same level of idiocy.

     

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    Tony, May 22nd, 2009 @ 8:35am

    If you have an existing working business model that isn't free, there is no need to really change. However if you are a news paper or RIAA where your customers are demanding free, then you should probably think about changing because the existing business model is NOT working.

    People will always take the path of least resistance (read cost). People will always do what is "easiest" to THEM which ironically is not always the easiest solution to the problem.

    I guess I am saying the same thing as everyone else (they just did it better). Free does and can work. However it is a mind shift for most because is different from the normal.

     

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    mgallagher, May 22nd, 2009 @ 8:38am

    There are really two problems here...

    I've posted a comment or two before here, and I know that Mike and I see things slightly differently - but I think this may bear repeating.

    It sounds like there are two discussions in the initial post: one is the concept of "free" in an economic sense, and one is the concept of "free" in a business development sense.

    I've never been a fan of using the word "free" when dealing with econ analysis. What you're implying is that price=zero, which it can never really be. Even if there's no exchange of currency, there are still all of the esoteric things like opportunity costs, transaction-external costs, etc. Even for "information" or "electronic" goods, marginal cost is never truly zero, and if you call it that, you really do literally introduce divide by zero errors when you try to do a model or other math-based analysis.

    I still think a good alternative approach is to talk about limits as price approaches zero. Mike has made the point that this really makes the concept harder for some to understand, and I grant that it may be the case. However, I do think "free" as a shorthand term is misleading.

    The other side of this is free as part of a business solution. Here I really do agree with Mike in that people miss the whole price = marginal cost thing. As marginal cost approaches zero, price will approach zero. However (as been stated here many times) that doesn't mean value approaches zero.

    There's a lot of discussion about "selling the scarcity", which I think is another way of saying find things to sell that have a substantial marginal cost (and hence will be more scarce). Using the VALUE of a "free" good to attract a market for your scarce good makes perfect sense and there are any number of examples of how to do this.

    Free balloons for the kids at a furniture store, free hot dogs and soda at the car dealership, free MP3s at a web site that sells concert tickets, free episodes of General Hospital. These things have all worked at one time or another, at some point will stop working, and will eventually be replaced by something else.

    So, there's a really long winded way to say we should keep the theoretical discussions (economics) and the application discussions (business) well defined.

     

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    rwieck, May 22nd, 2009 @ 8:41am

    Zero

    It shouldn't be a big surprise that people don't get the concept of "0" or free. After all, zero is a fairly recent concept.

     

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    Mechwarrior, May 22nd, 2009 @ 8:52am

    Re:

    I think something important happened in the last 8 months. I dont quite remember what it was. Oh well, back to shoveling dollar bills into these nondescript bags.

     

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    Anonymous Coward, May 22nd, 2009 @ 8:59am

    Re: There are really two problems here...

    so if I get a big enough number of people together calling for free Ferraris and free flights to bali, we should all get them?

     

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    Anonymous Coward, May 22nd, 2009 @ 9:03am

    Re: Re: There are really two problems here...

    I heard some people calling for free brains...too bad the brain factory didn't take advantage of the free business model in that instance.

     

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    chris (profile), May 22nd, 2009 @ 9:07am

    Re: Re:

    you're neglecting the money that is saved by not having to create massive amounts of overhead trying to keep people from copying and distributing the music themselves, the money that is save on advertising (word of mouth is still king in many music circles), and the savings reduced for managerial staff that oversees all of the above.

    let's not forget the free market research data. if people are coming to your website to download your stuff, you get to see where they are located, what site they came to you from, and if you do it right, what promotional campaign referred them.

    you can also use torrent trackers to collect data on who is downloading/commenting on your stuff. trackers and bit torrent are way cheaper than hosting your own site for downloads.

     

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    Don, May 22nd, 2009 @ 9:09am

    Over the course of the last year, I have used free sampler cd's to build the fanbase of one of my clients, a young singer-songwriter named Joe Pug. The program has been overwhelmingly successful, and has (along with hard work, some luck, and most importantly great songs) put him in a position where his income from live shows has dwarfed our investment in the cds.

    If you have a good product, getting people to sample that product should be your most important marketing goal. If we decided to sign with a record label we would have other avenues, most importantly radio. Having held out on that decision, we considered our other options. "Free" isn't always the best option, but in our situation we saw a targeted free sampling of the music as the most effective and efficient avenue available to us at the moment. Note the "targeted" part. We're not setting these things out in stacks in record stores. We're asking existing fans to hand them out to their friends on a voluntary basis.

    It has been argued that it makes more sense to do this digitally, but thus far our experience has shown that for new-adopters being given an actual physical CD is crucial.

    The costs are definitely not negligible but dollar-for-dollar we have found nothing is more effective. I certainly wouldn't recommend a band do this without at least some objective evidence that you are connecting with fans, as you are essentially laying a large bet down on your songs. But with the right music, focus and implementation, "Free" can be a crucial and efficient piece of a larger business model.

     

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    Anonymous Coward, May 22nd, 2009 @ 9:25am

    Re:

    exactly - if you pushed just a digital download, you likely wouldn't get the same result. You would get tons of freeloaders, and not much in the way of promotion.

    Now, you also used the term "sampler", and this is very important. If you give away everything, what is left to sell? nothing. A sampler CD with a couple of songs and maybe instructions on how to get more would be a good use of free.

    However, the reality here is that Mike and his buddies look at your entire catalog as one big ad. They think it should be entirely free, free forever, to everyone, no matter what. They think that your client's effort as a singer song writer are entirely worthless, unless he gets his butt up on stage and overcharges a bit for tickets to be able to afford to make more music. Worse, they would suggest that this talented song writer would be better off charging people to play miniputt or have lunch rather than make music, all in the name of free.

    The file sharers have made your client's ability to write a song worthless. Isn't that sad?

     

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    hegemon13, May 22nd, 2009 @ 9:28am

    Re: Re: There are really two problems here...

    Wow, reading comprehension seems a bit lacking on those arguing against using "free" in a business model. Did you read the post you responded to at all? Last I checked, neither Ferraris nor airplane flights have a marginal price approaching anything close to zero. The two items you mentioned are, in fact, exceptionally scarce. But Ferrari can and does provide free things for us, such as sponsoring an episode of a TV show in exchange for advertising, in order to sell more scarce Ferrari vehicles.

     

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    hegemon13, May 22nd, 2009 @ 9:32am

    Re: Re:

    What's sad is that you are so thick-headed that you can't even read or comprehend the article you are responding to. NO ONE SAID THAT MUSICIANS SHOULD NOT MAKE MONEY. Mike only points out ways for them to still make money in an environment where the music itself has a quickly declining price.

    I can also tell you that, among my friends and co-workers, those who take part in file-sharing are also those who spend the most money on entertainment. So, your argument that these file-sharers make it impossible to make money is completely bogus.

     

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    ChimpBush McHitlerBurton, May 22nd, 2009 @ 9:45am

    Re:

    I think that people who choke on the concept of "free" need to substitute the phrase "loss leader".

    I suspect most people have at least a vague understanding of that concept, and I think it fits in well to the "free" discussion. Business models sometimes rely on giving one thing away without cost, in order to obtain something else from the "customer", even if it's just "mindshare".

    As my dad used to love saying, "There is no such thing as free. Even if you don't pay money, you are paying something, even if it's just attention."

    CBMHB

     

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    SimonTek (profile), May 22nd, 2009 @ 9:52am

    The Open Store

    When I opened my store The Open Store (which was the first Linux brick and mortar store in the US. I was talking to RMS about it, he kept mentioning I should call it The Free Store. I was like, no, I don't want people thinking brand new computers were free. I was not in the best area of town, I knew that wouldn't play well.

     

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    amarygma, May 22nd, 2009 @ 9:56am

    Re:

    I think they meant 3-conomics. :P

     

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    Anonymous Coward, May 22nd, 2009 @ 9:56am

    Re: Re:

    The issue you don't seem to understand is that the monetary value of a song to a person is quickly approaching zero. Something is only worth as much as someone is willing to pay. If people aren't willing to pay, you can't expect to just say, "tough noogies." Your product no longer has any monetary value. therefore, you need to sell a product that does have monetary value OR get out of the business. Period. No one ever said anyone is entitled to money just working. You need to make sure people want to pay you for that work first. You can't expect to make money just because you made a song. You need to make people want to give you money, not force them.

    For some reason, folks in the arts (music, literature, movies, etc.) all feel like they're entitled to money just for putting their stuff out there. You're not. You need to give those things value thats worth paying for. It doesn't matter that you need a certain amount to cover the costs. If your costs outweigh the actual monetary value of the output, you need to find money elsewhere (re: fix your business model) or get out of the business.

     

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    Mike (profile), May 22nd, 2009 @ 9:58am

    Re: Is "Free" going to be free to read online?

    if not, then it seems that this may be a bit hypocritical.

    Yes. It will be free online, in a variety of formats. And I believe there will be a free audio version.

     

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    Felix Pleşoianu, May 22nd, 2009 @ 10:21am

    WRT people who don't get the concept of free, here's a little test.

    What is the smallest quantity you can have of any discrete good?

    If you answered "one", the joke's on you. The smallest possible quantity in the physical world is zero. It is perfectly possible to have zero cars. Or zero money, for that matter. In other cases, that's a good thing: you don't want more than zero diseases, don't you?

    And that's why "zero" is the first natural number (hint, hint), programmers count from zero, a point has zero dimensions and so on. That's the number where everything begins... and ends. Heck, the universe started life as a point.

    Now is it obvious why free (zero cost) is a perfectly possible price for something?

     

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    Pete Austin, May 22nd, 2009 @ 10:26am

    It's Very Simple

    In any business there are a variety of stakeholders: managers, workers, investors, customers etc. Each of these contributes something, e.g. their time and skills, and each of them gets something back, e.g. payment or physical products.

    The non-free lobby seem assume that customers must lose in every transaction, while everyone else must win. However
    1. This is not a zero sum game, sometimes everyone wins
    2. All that should matter to managers/workers/investors is that they gain *on average*. They don't have to get money from customers for every transaction.

    In fact I can't think of any business where such people gain *every time*. There are always situations such as marketing or fixing problems where someone ends up paying.

    The difference with "free" as a business model is the large reach (at a low cost) of these loss-making parts of the business.

     

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    Don Bartlett, May 22nd, 2009 @ 12:09pm

    Part of the disagreement seems to stem from a definition of terms, in particular what it means to be a musician. If you are a musician who does not intend to tour, your stance would be decidedly different on the matter. Most musicians today, however, realize that touring is an integral part of your business and these are the situations i'm addressing.

    I agree that your whole catalog shouldn't be free, although I could probably make the case that it would be just as sustainable if it were. But at any rate, the musicians that I work with view their entire career economically, rather than simply the part that involves the purchase of a CD. In the space of a good summer weekend an artist can make as much as he has in a year of CD sales. (obviously each artists situation is different, but i think this applies to many) So if giving away one product as a marketing expense causes the exponential growth of others (live revenue, merchandise, publishing revenue) then it is a perfectly rational and intelligent decision.

    I personally don't see it as degrading to the product, or the art. I see it as being completely confident in the art as a means to create a personal, longstanding, profitable relationship with a fan. I also completely disagree that making music free renders a songwriter's craft "worthless", simply because he has to monetize it in a different way than he did 15 years ago.

    To take a slightly different angle, the opportunities afforded artists with the internet and "free music" probably saved Joe 4 years of backbreaking touring to get to the level he is at. He just completed his first headlining tour, and most cities had crowds of 100-200. This would be utterly impossible without giving the music away.

     

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    Anonymous Coward, May 22nd, 2009 @ 12:44pm

    Re:

    Bravo, Don, for seeing how this model can/does work. I think this part of what you've related is key regardless of the business model:
    I personally don't see it as degrading to the product, or the art. I see it as being completely confident in the art as a means to create a personal, longstanding, profitable relationship with a fan.
    This is too often missed.

     

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    Mike (profile), May 22nd, 2009 @ 1:55pm

    Re: Re:

    Now, you also used the term "sampler", and this is very important. If you give away everything, what is left to sell? nothing.

    There are always additional scarcities. It's impossible to give away "everything." There's always more. Giving away all your music isn't giving away everything.

    However, the reality here is that Mike and his buddies look at your entire catalog as one big ad. They think it should be entirely free, free forever, to everyone, no matter what.

    No, not should. Should is a moral argument. The argument we're making is that the competitive environment means that this is the most reasonable business model to make the most money long term.

    They think that your client's effort as a singer song writer are entirely worthless, unless he gets his butt up on stage and overcharges a bit for tickets to be able to afford to make more music.

    Again, you seem to misunderstand. The efforts as a singer-songwriter are WORTH a TON. In fact, we've made that point over and over again. That's EXACTLY where the value is. You seem confused about the difference between value and price.

    In fact, we wrote up a post about the artist Don represents a few months ago, mentioning what a unique marketing opportunity it was -- though questioning how well it would scale.

    Worse, they would suggest that this talented song writer would be better off charging people to play miniputt or have lunch rather than make music, all in the name of free.


    We've said no such thing. Reading comprehension is your friend. You should try it.

    The file sharers have made your client's ability to write a song worthless. Isn't that sad?

    Not at all. It's worth a ton, if properly utilized.

     

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    Roger, May 22nd, 2009 @ 2:02pm

    Re: Is "Free" going to be free to read online?

    My understanding that yes indeed Free will be free online. The physical book will be for sale, in a way demonstrating Anderson's point - some people will pay for certain platforms, even though it is free elsewhere.

     

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    Anonymous Coward, May 22nd, 2009 @ 2:06pm

    The best is always free. I'll deal with ads to get the best. google, FileZilla, twitter, OOo, skype, Hulu, podcasts, pandora, superduper, (o hell, http://www.ramsinks.com/software/ ) ... where do I have time to go "buy" things? Anderson (just as this post shows) is popular regardless of what you think. He got you over here to hear about his book. ;)

     

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    The Digitalists, May 22nd, 2009 @ 2:14pm

    The problem with FREE

    I completely agree with Anonymous Coward, who says that free is a tool, not a business model. My issue with Anderson (based on his Wired cover story previewing the book) is that he seems unaware of the dangers of free. In the dot-com era, companies gave away far too much for free without figuring out a good way to monetize the traffic/attention. And we're currently seeing the ad model that newspapers and magazines have relied on for decades experience an existential crisis. You'd think that as a) a magazine editor who b) covers the tech industry, Anderson would be cognizant of both of those trends. Yet his article never even addressed them. His WSJ follow up piece from earlier this year did acknowledge that free was experiencing some speed bumps, but presented them as being caused by the financial crisis, even though the dangers were obvious long before that.

    Here's my critique of Anderson and some thoughts on how businesses can avoid the perils of free

     

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  38.  
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    Anonymous Coward, May 22nd, 2009 @ 2:23pm

    Re: Re:

    loss leader, free, infinite goods, it all comes to the same basic thing:

    People will pay for music, but the free people want it given away to promote something else, usually something they can get a part of.

    Trading dollars for dimes. It's an easy business model to explain, just check out youtube's bottom line.

     

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  39.  
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    Anonymous Coward, May 22nd, 2009 @ 3:06pm

    Re: Re: Re:

    your value and $4 get you a so-so coffee at starbucks.

    a song writer shouldn't have to do anything more than write songs to make a living. Isn't writing songs enough? Isn't that something that, by itself, should have enough value that a price can be put on it?

    Value without cost works only when you are promoting on from there. But what if they guy just wants to write songs and record albums and stay home with his family? Does he not have the right to make a living? Why should a horde of file sharers choose his business model for him?

    You say it's worth a ton - but it isn't worth any money.

    Isn't writing a good song a scarcity that should be rewarded handsomely? Is that not unique or scarce enough?

    you say that people fail to understand the difference between price and value. I think you are failing to see that the value implied here isn't for the guy who deserves it (the song writer) but for someone else who will use the song to sell something else that doesn't pay the writer a penny.

     

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  40.  
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    Mike (profile), May 22nd, 2009 @ 3:24pm

    Re: Re: Re: Re:

    a song writer shouldn't have to do anything more than write songs to make a living. Isn't writing songs enough? Isn't that something that, by itself, should have enough value that a price can be put on it?


    You're still using "should". That's a moral argument, not an economic one. Shouldn't a buggy whip maker get money for making buggy whips? Isn't that enough? Shouldn't the thinker just make money for thinking up ideas?

    Those arguments are meaningless.

    We're saying that the musician CAN and DOES make money for making music IF YOU PUT IN PLACE THE RIGHT BUSINESS MODEL. It's just that the business model isn't in selling the music.

    Value without cost works only when you are promoting on from there. But what if they guy just wants to write songs and record albums and stay home with his family?

    What if I just want to think all day and stay home with my family? Based on your logic, people should just throw money at me. That's not a business model.

    Does he not have the right to make a living?

    No one has a "right" to a living. They have a right to adopt a business model and TRY to make a living. But the market determines whether or not it works.

    Why should a horde of file sharers choose his business model for him?

    Welcome to capitalism. The market determines your business model.

    You say it's worth a ton - but it isn't worth any money.

    You're wrong. It's worth a ton of money. Trent Reznor made $1.6 million in ONE WEEK off music he gave away totally free. How? He put in place a smart business model.

    Isn't writing a good song a scarcity that should be rewarded handsomely? Is that not unique or scarce enough?

    Yes, *writing* a song is a scarcity. Making a copy is not. Understand that difference and you understand everything.


    you say that people fail to understand the difference between price and value. I think you are failing to see that the value implied here isn't for the guy who deserves it (the song writer) but for someone else who will use the song to sell something else that doesn't pay the writer a penny.


    No, I understand the difference between value and price, and that it's up to the people involved to come up with a business model that properly aligns them.

    You seem to be under the impression that when someone chooses a bad business model, the world owes him money. Good luck with that.

     

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    Tim Maly, May 22nd, 2009 @ 10:05pm

    Re:

    Oh they've done all these things. They just didn't think through what that might mean.

     

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    Anonymous Coward, May 23rd, 2009 @ 5:01am

    Re: Re: Re: Re: Re:

    sorry, but a buggy whip maker shouldn't make money if nobody uses buggy whips anymore. Your argument is full of holes because people still use the songs every day, and in fact, if no new songs were written the music industry would slowly grind to a halt (and turn into one massive classic rock system, so ugly!).

    Reading you go on about all of this is funny, because you don't see your own massive blindspot: It isn't about the market determining a business model, it's about the a small minority of people wandering around burning down other people's business models so they can get stuff for free. It is very difficult to compete against people who willfully violate copyright.

    As for Trent Reznor, that is the ultimate crap argument. Trent is there because Trent is massively well known, a product of the huge music machine you loath. Trent could take pictures of his bowel movements and sell them for 1.5 million. Does that mean that bowel movements are a valid business model? Nope. It just means he is famous and could get $200,000-$300,000 just to show up for 30 minutes at a night club party (a la Paris Hilton). It doesn't mean the rest of us can do it.

    You are using exceptions and trying to prove rules. It's a fool paradise when you do that.

     

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    Mike (profile), May 24th, 2009 @ 3:35pm

    Re: Re: Re: Re: Re: Re:

    sorry, but a buggy whip maker shouldn't make money if nobody uses buggy whips anymore.

    And no one wants to buy songs any more. So you agree with me.

    Thanks.

    Your argument is full of holes because people still use the songs every day,

    Yes, and people still used TRANSPORTATION, they just DIDN'T BUY BUGGY WHIPS. Same thing here. People still listen to music, they just DON'T BUY SONGS any more.

    It isn't about the market determining a business model, it's about the a small minority of people wandering around burning down other people's business models so they can get stuff for free. It is very difficult to compete against people who willfully violate copyright.

    Bullshit. It's the easiest thing in the world to compete with people who willfully violate copyright, if you put in place a smart business model. If you're dumb, I can see why you'd have trouble.

    As for Trent Reznor, that is the ultimate crap argument. Trent is there because Trent is massively well known

    Ok. Then how about Jill Sobule. Or Motoboy. Or Corey Smith. Or Jonthan Coulton. Or any of the other artists we've discussed who weren't "massively well known." All of whom are making a lot more money today than they would have under the old system.

    You are using exceptions and trying to prove rules. It's a fool paradise when you do that.

    How many "exceptions" do you need to see before you realize it is the rule?

     

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    cram, May 24th, 2009 @ 5:33pm

    "And no one wants to buy songs any more. So you agree with me."

    Perhaps you should inform the likes of Apple and Amazon.

    "People still listen to music, they just DON'T BUY SONGS any more."

    Yeah, please INFORM the likes of Apple and Amazon.

    "How many "exceptions" do you need to see before you realize it is the rule?"

    I don't think we are anywhere close to a situation where this is the rule rather than the exception. How many artists are actually giving away music? A handful. Besides, all the models discussed are different from each other. What worked for Trent was not what worked for Jill...etc. It's still early days, there's still a lot experimentation going on.

     

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  45.  
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    Anonymous Coward, May 24th, 2009 @ 6:32pm

    Re: Re: Re: Re: Re: Re: Re:

    Mike, you are a master of selectively "listening".

    "sorry, but a buggy whip maker shouldn't make money if nobody uses buggy whips anymore.

    And no one wants to buy songs any more. So you agree with me.

    Thanks."


    Nope, you didn't read very well. Nobody uses buggy whips, so there is no market. People listen to music every day, and want more. Writing music isn't a buggy whip business.

    People are more than willing to pay for music, as they always have. There is also a group of people who won't pay for anything. Adjusting a business to satisfy the leeches is pretty foolish.

    "Yes, and people still used TRANSPORTATION, they just DIDN'T BUY BUGGY WHIPS. Same thing here. People still listen to music, they just DON'T BUY SONGS any more."

    Again, a foolish comparison. Quite simply, they aren't just using transportation, they are still using buggies. There is just a number of people who don't feel they should be obliged to pay for buggy whips anymore, but they sure as heck still want to ride the buggy. Why should the buggy whip makers give their product away just to make them happy? It would be foolish.


    "Ok. Then how about Jill Sobule. Or Motoboy. Or Corey Smith. Or Jonthan Coulton. Or any of the other artists we've discussed who weren't "massively well known." All of whom are making a lot more money today than they would have under the old system."

    Jill Sobule is well known, just not very popular (different). The other 3? Well, your version of success and mine don't match. Regional players with little or no hope of making the big times, and all appear to be playing into a niche of music you like. Which would show another weakness of the argument, that perhaps this free stuff only has some success for artists playing music that most people wouldn't normally just steal.

    "How many "exceptions" do you need to see before you realize it is the rule?"

    How about 1 real one. Not someone or some band that was "made" by the existing record label / music industry methods, and not someone sitting in a corner playing marginally unpopular music on their guitar and claiming to be an "artiste". Rock, pop, R&B: Name me a single artist with a top 40 song, widespread (national and international) airplay, selling out arenas, etc. You know, all the normal measurements of success.

    Answer: NONE.

    sucks, don't it?

     

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    Mike (profile), May 24th, 2009 @ 6:55pm

    Re:

    Perhaps you should inform the likes of Apple and Amazon.

    Ok, saying "no one" was an exaggeration, but clearly the issue is that FEWER people want to buy songs, and that trend is heading in one direction only.

    I don't think we are anywhere close to a situation where this is the rule rather than the exception. How many artists are actually giving away music? A handful. Besides, all the models discussed are different from each other. What worked for Trent was not what worked for Jill...etc. It's still early days, there's still a lot experimentation going on.

    I'd argue that the same model worked for both Trent and Jill. The model was: connect with fans, give them a reason to buy. It's that simple.

     

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  47.  
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    Mike (profile), May 24th, 2009 @ 7:03pm

    Re: Re: Re: Re: Re: Re: Re: Re:

    Nope, you didn't read very well. Nobody uses buggy whips, so there is no market. People listen to music every day, and want more. Writing music isn't a buggy whip business.


    I read perfectly well. Let me make this clear:

    Buggy whips is to transportation as selling songs is to listening to music.

    Okay? Get it? Good.

    People are more than willing to pay for music, as they always have.

    So then what's there to complain about? If people have always been willing to pay for music (and, history suggests that isn't even remotely close to true, but ok...), then why is the industry so upset?

    There is also a group of people who won't pay for anything. Adjusting a business to satisfy the leeches is pretty foolish.

    Ok. So if they'll never pay for anything, again, there's no problem.

    As you've defined it, there's no problem whatsoever with the industry. Some people pay, others will never pay.

    But, of course, you know that's not true. What is actually happening is that rather than "leeches", bands are figuring out that people helping them promote and distribute the music are an amazingly useful tool -- taking on a process that used to be quite expensive and doing it for free.

    Amazing!

    Why should the buggy whip makers give their product away just to make them happy? It would be foolish.

    I'm not saying the buggy whip makers should give away their product. I'm saying they should be making steering wheels.

    Jill Sobule is well known, just not very popular (different). The other 3? Well, your version of success and mine don't match. Regional players with little or no hope of making the big times, and all appear to be playing into a niche of music you like. Which would show another weakness of the argument, that perhaps this free stuff only has some success for artists playing music that most people wouldn't normally just steal.


    Wait, making $4 million in a year isn't big time?

    Not someone or some band that was "made" by the existing record label / music industry methods, and not someone sitting in a corner playing marginally unpopular music on their guitar and claiming to be an "artiste". Rock, pop, R&B: Name me a single artist with a top 40 song, widespread (national and international) airplay, selling out arenas, etc. You know, all the normal measurements of success.

    You have the wrong measurement for success. That's fine, but it makes you look foolish. My measure for success is someone making a living playing music.

    Your model is disingenuous because the "terms" you've set are like saying "name me one major league baseball player who didn't get drafted by a major league team!" I'm saying you need to look beyond your narrow definition of success to what's REAL success.

    sucks, don't it?

    Not at all. Because I see more and more successful musicians every day who don't need that model.

    That's amazing and wonderful and doesn't come even remotely close to sucking.

     

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  48.  
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    Anonymous Coward, May 24th, 2009 @ 7:50pm

    Re: Re: Re: Re: Re: Re: Re: Re: Re:

    You are a master, that is for sure.

    "
    Buggy whips is to transportation as selling songs is to listening to music.

    Okay? Get it? Good."

    You are bending the discussion. This is your mastery.

    The original question is about songwriters. They are providing a very, very scarce good. Yet you are saying they should have no direct way to make money from their scarce good. Listening to this scarce product is key - without the scarce product, nothing to listen to.

    You are mistaking the transport mechanism (shiny discs or MP3s) with the product (scarce new songs). Without economic support, there will be fewer song writers, and thus fewer new songs (of any quality). You are attempting to ignore all the moving parts of how music is made, and concentrating on only one part, the retailing of the music.

    Music sales are how much last year? How much did Itunes sell last year? If you are saying nobody pays for music, you are wrong.

    "Wait, making $4 million in a year isn't big time?"

    Who is making NET $4 million a year giving away their music (that isn't a name artist?). Heck, Jill Sobule was doing dinner parties and the shaking hands and kissing babies route just to get enough money to record.

    "You have the wrong measurement for success. That's fine, but it makes you look foolish. My measure for success is someone making a living playing music.

    Your model is disingenuous because the "terms" you've set are like saying "name me one major league baseball player who didn't get drafted by a major league team!" I'm saying you need to look beyond your narrow definition of success to what's REAL success."

    This is where you are truly scary, because what you are suggesting is to rip down the entire current music industry (and every other entertainment industry) and replace them with, well, nothing. your marginal success people making a living sounds nice, but it isn't very realistic, for all sorts of reasons.

    The most obvious is the lack of critical mass. While in a few select areas there may be enough places for an artist to play to make a living (if they take home net $200 a night, they need to play 3 - 4 nights a week, 50 weeks a year to make a "living"). If there are 5 people in the band, they need to take home net $1000 a night, 3 - 4 nights a week. To avoid overlapping themselves, they might need to play in 50 or 100 venues a year to avoid overlapping themselves. Outside of the major centers, most areas don't have that level of support for a music scene. I would suspect for R&B acts (example) there might only by 50 viable live music locations in New York, let alone in Pheonix Arizona.

    Without the critical mass to be able to take the show on the road and hit 200 venues over a fairly wide area, there is little chance for a band to make a real living at it. How do they do it? Well, mostly you develop your fan base by radio airplay, following an album release, which is distributed and promote by a label. But since there are no labels, there is no easy way for individual stations or station groups to find popular new music. So you end up with a fragmented music business with hundreds of thousands of artists getting spotty airplay, making it very difficult for those bands to gain traction. They could do it by playing a bunch of shows all over as an opening act, but that likely wouldn't pay very much and they wouldn't be making the living.

    Plus honestly, opening act for who? All the other bands are in the same boat, getting spotty airplay and having little clusters of fans and not a full fanbase.

    So yeah, if you can slogging it out for not much more than McWages as "success" then I guess more power to you. Too bad that in order to make that success happen, you had to put tens of thousands of people involved in the record labels, the sales of "shiny discs", marketing, A&R, and all those other things out of work. It's okay, they can all grab a guitar and become the next no-name playing in coffee house for beer money.

    It isn't amazing and wonderful - it's just re-arranging the deck chairs, destroyng most of them in the process. The biggest flaw is assuming that all that is sold in music today will not be lost, but will get larger as higher ticket and "whatever" sales happen to support the music business. That has been shown so far not to be the case, with money leaving music and going to video games, and other forms of entertainment. Just sort of like DVDs,you are suggesting that we should all step over the dollar to pick up the shiny dime.

    I have to assume you are a big fan of coffe house "guy with a guitar" music, because almost every example you have comes from that field (outside of Saint Trent). Perhaps you would like to shine the light on some actual mainstream rock acts doing this stuff and having enough success to get past playing the 2 clubs in town?

    It's still sucking, even if a few of your friends can now afford to stop drinking thunderbird and can actually order a beer.

     

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    Anonymous Coward, May 24th, 2009 @ 7:52pm

    Re: Re:

    "I'd argue that the same model worked for both Trent and Jill. The model was: connect with fans, give them a reason to buy. It's that simple."

    Trent and Jill both have existing fan bases to tap. That is the head start that new acts wouldn't have. Your model fails at that point.

     

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    Anonymous Coward, May 24th, 2009 @ 8:05pm

    Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:

    I have to add this, it makes me laugh. I read Corey Smith's bio very closely, and it seems that he has the actual record business to thank for his success, his winning of a song writing contest is what got his first album made. His being in Athens, GA, in the middle of the college radio distribution system pretty much assured him of covereage from there.

    Gee, so I guess we can strike Corey Smith off the success list, because the internet didn't make him!

     

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    cram, May 24th, 2009 @ 11:30pm

    "...but clearly the issue is that FEWER people want to buy songs, and that trend is heading in one direction only."

    I don't think so. I think we are well into the phase of viable, reliable models for the selling and buying of digital music.

    Of course, the spread of the Net will mean more freeloaders, but we're also likely to see more members of the paying public, the guys who used to buy tapes and CDs in the pre-Net era, line up to buy MP3s. Which means artists won't be under pressure from the Mike Masnicks of the world to give away their music.

    "I'd argue that the same model worked for both Trent and Jill. The model was: connect with fans, give them a reason to buy. It's that simple."

    And why can't that model include pay a few dollars for the digital music? I mean...which is better: a handful of fans buying overpriced concert tickets and box sets, or a huge number of fans pitching in a few dollars each, knowing well that every dime they send in is going directly to their favorite band, and not to the RIAA?

     

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    Anonymous Coward, May 25th, 2009 @ 3:19am

    Re:

    Another important point cram is that even in Canada, where downloading is pretty much tolerate and not prosecuted, less tha 20% of internet users are regular downloaders (had downloaded in the last 30 days)

    This points out another fallacy of whole "world according to masnick", because there is no indication that there is any trend that has everyone as a free downloader, unless those free downloads are made legal, super easy, and fast. That isn't something that is going to happen any time soon.

    What Mike also forgets to express is that in the end, the current record labels will be replaced by other setups that will look remarkably like record labels, because the artists themselves just don't have time to self promote, self distribute, self whatever and still create and play music to make a living. Opportunity costs some into play, every unit of promotion costs a few units of music. It is clear that an artist can't be in two places at the same time, so they can't be doing promotion today in New York and also be setting the groundwork and booking the appointments for promotion in LA next week, not to mention the 6 other smaller places they are playing this week. So they end up with people, the people have people, and we end up with the same structures.

    Mike Masnick sort of revealed himself here. His version of success appears to be a guy with a guitar being able to make $30,000 a year. At that level, yeah, I suspect the artist could do it all themselves, because they wouldn't have a very extensive promotional schedule to work out.

     

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    Mike (profile), May 25th, 2009 @ 9:06am

    Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:

    The original question is about songwriters. They are providing a very, very scarce good. Yet you are saying they should have no direct way to make money from their scarce good. Listening to this scarce product is key - without the scarce product, nothing to listen to.

    No, I am absolutely saying they should make as much money as possible from the scarce good. Scarce products are how you make money. Copies of songs, however, are not scarce goods.

    Creating new songs is very much a scarce good, and a great way for songwriters to make money. So perhaps we agree?

    You are mistaking the transport mechanism (shiny discs or MP3s) with the product (scarce new songs). Without economic support, there will be fewer song writers, and thus fewer new songs (of any quality). You are attempting to ignore all the moving parts of how music is made, and concentrating on only one part, the retailing of the music.

    You are making a mistake here, assuming I'm saying there's no economic support. Instead, I'm showing songwriters how to make more money. It's the opposite of what you say, and because of it, there should be more songwriters.

    Who is making NET $4 million a year giving away their music (that isn't a name artist?). Heck, Jill Sobule was doing dinner parties and the shaking hands and kissing babies route just to get enough money to record.

    Again, you're judging things by the wrong standard. If your standard of success is making $4 million net, then you have a really warped sense of success.

    This is where you are truly scary, because what you are suggesting is to rip down the entire current music industry (and every other entertainment industry) and replace them with, well, nothing. your marginal success people making a living sounds nice, but it isn't very realistic, for all sorts of reasons.

    No, I'm not saying rip down the entire industry. I'm saying it's already being dismantled, and if that's happening, why not embrace these models over here that GET RID of the inefficiencies and let the MUSICIANS make MORE MONEY. And it's incredibly realistic. In fact we see more and more people proving it's realistic every single day. These days I'm getting between 15 and 20 emails a DAY from musicians who are showing how this can work, and they're thrilled.

    Reality is wonderful. You should join us in it.

    The most obvious is the lack of critical mass. While in a few select areas there may be enough places for an artist to play to make a living (if they take home net $200 a night, they need to play 3 - 4 nights a week, 50 weeks a year to make a "living"). If there are 5 people in the band, they need to take home net $1000 a night, 3 - 4 nights a week. To avoid overlapping themselves, they might need to play in 50 or 100 venues a year to avoid overlapping themselves. Outside of the major centers, most areas don't have that level of support for a music scene. I would suspect for R&B acts (example) there might only by 50 viable live music locations in New York, let alone in Pheonix Arizona.


    You assume, incorrectly, that the model is based on touring. It's not. And we've said this before. I'm not sure why you seem unable to recognize the larger model.

    But I've actually been talking with a band that has 8 (yes, 8) members. They've never been signed to a major label, but they tour constantly, and bring in a good living between that and merchandise sales. According to you, they're not living in reality?

    Well, mostly you develop your fan base by radio airplay, following an album release, which is distributed and promote by a label

    Mistake #1. The new fanbase is created online, not via the radio.

    But since there are no labels, there is no easy way for individual stations or station groups to find popular new music.

    Who said there are no labels?!? Not me.

    So you end up with a fragmented music business with hundreds of thousands of artists getting spotty airplay, making it very difficult for those bands to gain traction.

    Again, you're stuck in the last decade. Radio play isn't the hit maker it used to be.

    So yeah, if you can slogging it out for not much more than McWages as "success" then I guess more power to you. Too bad that in order to make that success happen, you had to put tens of thousands of people involved in the record labels, the sales of "shiny discs", marketing, A&R, and all those other things out of work. It's okay, they can all grab a guitar and become the next no-name playing in coffee house for beer money.

    You must have moaned and complained when telephone operators went out of work and were replaced by computers. And when auto workers were replaced by robots, that was the end of the world too, right?

     

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    Mike (profile), May 25th, 2009 @ 9:07am

    Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:

    I have to add this, it makes me laugh. I read Corey Smith's bio very closely, and it seems that he has the actual record business to thank for his success, his winning of a song writing contest is what got his first album made. His being in Athens, GA, in the middle of the college radio distribution system pretty much assured him of covereage from there.

    Gee, so I guess we can strike Corey Smith off the success list, because the internet didn't make him!


    Huh? Who said that the success stories we talked about couldn't include winning a contest? That doesn't disqualify anyone. He's giving away his music for free, connecting with fans and giving them a reason to buy.

     

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    Mike (profile), May 25th, 2009 @ 9:12am

    Re:

    I don't think so. I think we are well into the phase of viable, reliable models for the selling and buying of digital music.

    Ok. Good luck with that.

    Of course, the spread of the Net will mean more freeloaders,

    You may call them freeloaders, but smart folks are calling them the biggest fans who help do your promotions and distribution for free.

    Calling them freeloaders doesn't help you figure out how to use them to your advantage. It just screws you up.

    but we're also likely to see more members of the paying public, the guys who used to buy tapes and CDs in the pre-Net era, line up to buy MP3s. Which means artists won't be under pressure from the Mike Masnicks of the world to give away their music.

    It's not pressure from me. It's pressure from the market. When smart artists are giving away their music, and making a lot more money off of everything else, the other musicians who followed bad advice from folks like yourself will start wondering why no one's buying their music. Then they'll realize that rather than buying their music they're getting others' music FOR FREE and spending the money SUPPORTING THOSE BANDS for treating them right.

    And why can't that model include pay a few dollars for the digital music?

    It could. But it won't. That's just basic economics. Hell, I'd love it if the model for blogging was everyone would pay me a dollar. But it doesn't. So why bitch about it? Just recognize the basic economics and embrace it.

    I mean...which is better: a handful of fans buying overpriced concert tickets and box sets, or a huge number of fans pitching in a few dollars each, knowing well that every dime they send in is going directly to their favorite band, and not to the RIAA?

    Because that just opens up the opportunity for a band that treats its fans right to give away their music for free, and leverage that to make more money. It's economics.

     

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  56.  
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    Mike (profile), May 25th, 2009 @ 9:13am

    Re: Re: Re:

    Trent and Jill both have existing fan bases to tap. That is the head start that new acts wouldn't have. Your model fails at that point.

    Corey Smith did not. Jonathon Coulton did not. Both used various means to build up a big fan base, and can now put in place nearly identical models to what Trent and Jill did.

    There are strategies for building a fan base and there are strategies for making money off of that fanbase. I'm not sure why this is so difficult for someone to figure out.

     

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  57.  
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    Mike (profile), May 25th, 2009 @ 9:18am

    Re: Re:

    Another important point cram is that even in Canada, where downloading is pretty much tolerate and not prosecuted, less tha 20% of internet users are regular downloaders (had downloaded in the last 30 days)

    What does that have to do with anything? The number of downloaders is meaningless.

    This points out another fallacy of whole "world according to masnick", because there is no indication that there is any trend that has everyone as a free downloader, unless those free downloads are made legal, super easy, and fast. That isn't something that is going to happen any time soon.

    I'm not saying because of the free downloaders. I'm talking about because of artists recognizing the benefits of offering their music for free.

    What Mike also forgets to express is that in the end, the current record labels will be replaced by other setups that will look remarkably like record labels

    Actually, I've written exactly that. I think that this is exactly what modern record labels SHOULD be doing. Helping the bands to embrace these sorts of models. The difference, however, is that because there will be more options, the bands won't get as screwed over by the labels.

    Mike Masnick sort of revealed himself here. His version of success appears to be a guy with a guitar being able to make $30,000 a year. At that level, yeah, I suspect the artist could do it all themselves, because they wouldn't have a very extensive promotional schedule to work out.

    Heh. I understand. Since you can't refute the actual economics or what I *actually* say, you now have to lie. You clearly are not here to discuss. You are here to lie. I'm done responding to you.

     

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  58.  
    identicon
    Anonymous Coward, May 25th, 2009 @ 9:37am

    Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:

    Geez. You like to NOT answer, don't you?

    "Creating new songs is very much a scarce good, and a great way for songwriters to make money. So perhaps we agree?"

    Nope, we don't agree, because nothing you are posting here tells a songwriter how to make a living, unless they go out on the road and play gigs to make income. By removing the income from sales of music, and by your total hatred of all royalty and copyright systems, you are saying that the scarce good of new music is in and of itself worthless. Unless you are willing to go play it in public over and over again, songwriters cannot make money.

    "Again, you're stuck in the last decade. Radio play isn't the hit maker it used to be."

    Again, sorry, but radio is still the primary way for music to get mass, wide exposure to the public in a meaningful way. Radio is a passive medium, turn it on and enjoy. The radio is on all day in almost every office, every warehouse, every car, every taxi, etc, every day. Yes, people are discovering music by the internet, by TV, by whatever... but in the end, they are more often getting exposed to new music (over and over again) by radio.

    What it comes down to is this: You can WISH that something was the way you see it, but reality isn't there yet, except maybe amongst your immediate friends. The real world isn't living with ya yet.

    "You must have moaned and complained when telephone operators went out of work and were replaced by computers. And when auto workers were replaced by robots, that was the end of the world too, right?"

    Nope, not in the slightest. The difference is that the jobs I listed aren't going to be replaced by computers, they are going to be replaced by other people. So yeah, I object when jobs are downsized, people fired, and replaced by low cost wage slaves (possibly even offshore / underpaid workers). Some jobs are people jobs, and can't be turned into computer job.

    Although I will admit, most of what is in this blog could be written by a bot.

     

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  59.  
    identicon
    cram, May 25th, 2009 @ 5:50pm

    "I don't think so. I think we are well into the phase of viable, reliable models for the selling and buying of digital music.

    Ok. Good luck with that."

    See, you are unable to digest the reality that more and more people are actually willing to pay for digital music. The numbers are big enough for a sustainable model. And that is scary for you, because if enough people are willing to buy digital music, all this talk of new business models becomes meaningless.

    "It's not pressure from me. It's pressure from the market. When smart artists are giving away their music, and making a lot more money off of everything else, the other musicians who followed bad advice from folks like yourself will start wondering why no one's buying their music."

    You keep taking refuge in the "market." iTunes and Amazon are part of the market, and they are seeing sales of digital music rise. Where is the pressure you are talking about? If you are talking about CDs, yes. Sales are falling, but they are still in the billions. What incentive is there to give it all away right now?

    "Then they'll realize that rather than buying their music they're getting others' music FOR FREE and spending the money SUPPORTING THOSE BANDS for treating them right."

    What??? Others' music is not the same, is it? If my favorite band isn't giving away its music, why the hell would I go to some other band that's giving away their music for free? Is that what you do, Mike? Music is not news...if I can't get rock, there's no way I'll take pop. Your assertion is an insult to fans.

    "And why can't that model include pay a few dollars for the digital music?

    It could. But it won't. That's just basic economics."

    Oh, please. How do you know it won't? If Apple had told you they were planning to sell digital music you would have laughed at them, but now they are laughing at you, pissing all over your infinite/scarce theories. Because winning or losing in the market goes far beyond "basic economics."

    And what would happen if Apple launched its own label? Heck, they have everything - the entire structure is there in place.

    "Hell, I'd love it if the model for blogging was everyone would pay me a dollar. But it doesn't. So why bitch about it? Just recognize the basic economics and embrace it."

    There you go again! Blogging is not quite like playing music, is it? People won't pay to read your blog, but they may well pay to download a song they can play over and over again. You're simply to unable to come to terms with it, which is pitiful.

     

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  60.  
    identicon
    Anonymous Coward, May 25th, 2009 @ 7:12pm

    Re:

    "There you go again! Blogging is not quite like playing music, is it? People won't pay to read your blog,"

    Actually, if the blog was unique, special, and "scarce" people might pay for it, the same way they pay to access WSJ online. Then again, that is a bad buggy whip business model, so I guess Mike should just keep doing this for free.

     

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  61.  
    identicon
    cram, May 25th, 2009 @ 10:00pm

    "Actually, if the blog was unique, special, and "scarce" people might pay for it, the same way they pay to access WSJ online. Then again, that is a bad buggy whip business model, so I guess Mike should just keep doing this for free."

    Well, Mike has other "scarcities" to sell, but the WSJ hasn't yet figured out what its "scarcities" are and how to make money out of it. Until then, I suppose they will continue to remain ignorant of basic economics and persist with their bad model of charging close to a million subscribers for stuff they ought to be giving away for free.

     

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  62.  
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    Mike (profile), May 26th, 2009 @ 12:29am

    Re:

    See, you are unable to digest the reality that more and more people are actually willing to pay for digital music.

    Not unable to digest it. I agree it's happening, but it won't last. Anyone who thinks it will is playing a fools' game.

    Besides, it's a tiny part of the market. Tiny. Miniscule. Try looking at the numbers. Look at how many songs people have on their computers, and find out how many were purchased via iTunes/Amazon. Our computers can hold hundreds of thousands of songs easily. It's an incredibly economically inefficient system to charge a $1 per song. It won't last because economic inefficiencies don't last.

    In the short term it works, and if you can make money off of it, great. But to pretend it will last is a fool's game. Don't play it.

    In the meantime, your attempts at insulting me are misguided. I'm happy for Apple, but they're not laughing at me because of iTunes sales. You do realize that iTunes is a loss leader for them. Steve Jobs has admitted that they basically break even or make a tiny amount on iTunes. The money's in the hardware (scare good). If music went entirely free, Apple would be fine with it. Amazon may have a bit more trouble.

    There you go again! Blogging is not quite like playing music, is it? People won't pay to read your blog, but they may well pay to download a song they can play over and over again. You're simply to unable to come to terms with it, which is pitiful.

    I'm not sure why you need to resort to insults and calling me pitiful. I said, quite clearly, that people are buying digital files today. I just explained why it's a bad business model to buy into. You don't have to agree, but calling me pitiful? That says a lot more about you than me.

    You may believe that iTunes is a fantastic model, but ignoring the trend lines is a really dangerous game. I've discussed this stuff in the past with you, and I think you're an intelligent, thoughtful guy. Don't get run over by an economic bulldozer.

     

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  63.  
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    Mike (profile), May 26th, 2009 @ 12:34am

    Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:

    Geez. You like to NOT answer, don't you?

    I answered your questions directly and forthrightly. Your inability to understand is not the same as me not answering.

    Nope, we don't agree, because nothing you are posting here tells a songwriter how to make a living, unless they go out on the road and play gigs to make income. By removing the income from sales of music, and by your total hatred of all royalty and copyright systems, you are saying that the scarce good of new music is in and of itself worthless. Unless you are willing to go play it in public over and over again, songwriters cannot make money.

    A songwriter can make a living writing songs. They can sell that ability. We've discussed that in great detail. Who said anything about songwriters needing to go on tour? Not I.

    Do you always argue by making up what your opponent is saying and pretending they say stuff totally the opposite of what they said? That must make you a real hit at parties.

    Again, sorry, but radio is still the primary way for music to get mass, wide exposure to the public in a meaningful way.

    No. It's not. But if you believe that, good luck.

    Nope, not in the slightest. The difference is that the jobs I listed aren't going to be replaced by computers, they are going to be replaced by other people.

    Wait, so it's okay for jobs to be replaced by computers (i.e., net fewer jobs) but not okay when jobs are replaced by other human beings? What an odd economic world you live in.

    Although I will admit, most of what is in this blog could be written by a bot.

    Indeed. Must explain all the traffic we get.

     

    reply to this | link to this | view in thread ]

  64.  
    identicon
    cram, May 26th, 2009 @ 1:06am

    "In the meantime, your attempts at insulting me are misguided."

    "You don't have to agree, but calling me pitiful? That says a lot more about you than me."

    Apologies if you think I crossed the line.

    Anyways, when I said "pitiful" I didn't mean you were pitiful but your perceived inability to accept a reality that was not in accordance with your theories (aka iTunes).

    Peace!

     

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  65.  
    identicon
    Anonymous Coward, May 26th, 2009 @ 3:56am

    Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:

    "Indeed. Must explain all the traffic we get."

    Start from the bottom. Actually, the traffic you get mostly appears to be from your campaign to self link your site over and over. Don't get to proud of your traffic, you know it has crashed before.

    Anyway, back to the story:

    "I answered your questions directly and forthrightly. Your inability to understand is not the same as me not answering."

    Actually no, you are really, really good at answering with obtuse references to nothing in particular. Example:

    "A songwriter can make a living writing songs. They can sell that ability. We've discussed that in great detail. Who said anything about songwriters needing to go on tour? Not I."

    Discussed in great detail where? After reading this site for more than a year, the only suggestions I have seen made for song writers is to basically become jingle writers, or to do the sobule thing and hope people will pre-pay you for a product. I am guessing that you don't get the basic idea that if you remove the income from selling songs, that there is no longer a way to pay the people who make them? Basically, your answer every time is give the music away for free, and get a bigger fan base that will pay you more for XXXXXX - where XXXXXX is mostly performing concerts, selling t-shirts, or playing miniputt.

    Again, for all your self-linking in posts, can't you are least point to things rather than making vague references?

    "Do you always argue by making up what your opponent is saying and pretending they say stuff totally the opposite of what they said? That must make you a real hit at parties"

    Nope. All I am doing Mike is taking your comments over various threads, and putting them together in one place, which appears to be something you don't like. I am still trying to figure out why you deride the music business for pushing "shiny discs" and then get all up in the movie makers face and tell them to sell DVDs at theaters (more shiny discs). Your message tends to come across as confused.

    Example, when we discuss success in the music business, you just keep moving the target and you don't answer the question. Just as bad, you dismiss points without support for your point of view, example:

    "gain, sorry, but radio is still the primary way for music to get mass, wide exposure to the public in a meaningful way.

    No. It's not. But if you believe that, good luck."

    Yet, the numbers say otherwise: http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=104388

    "Bill Rose, senior vice president of marketing, Arbitron Inc., says "The sharp growth in weekly usage of Online radio... provides compelling evidence that radio's digital platforms may be reaching critical mass. We are... seeing encoded streams of AM/FM broadcasts with significant audience in local markets."

    A huge percentage of the population still listening to radio - just receiving it in a different manner.

    As for pretending people are saying stuff, this is classic:

    "Wait, so it's okay for jobs to be replaced by computers (i.e., net fewer jobs) but not okay when jobs are replaced by other human beings? What an odd economic world you live in."

    Not what I said at all. I object when well paying jobs are killed off and replaced by lower paying jobs, doing the same work. I object when jobs are shifted offshore. I object when the whole "disassemble the music business" as you call it movement is just going to end up with a similar number of people doing similar jobs (perhaps with different titles) for significantly less money.

    Income is being removed from the music business, but not the demand for the music. You have an MBA, you should be able to figure out what happens when there is unfilled demand. Removing the money from the music business creates a lack of desire to product content. The song writer at the start of this isn't going to work for food, and the performers you consider a success making beer money aren't going to get national / international coverage. So you end up with unfilled demand. Please explain to the class what happens where there is unfilled demand.

     

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  66.  
    icon
    Mike (profile), May 26th, 2009 @ 10:55am

    Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:

    The song writer at the start of this isn't going to work for food, and the performers you consider a success making beer money aren't going to get national / international coverage. So you end up with unfilled demand. Please explain to the class what happens where there is unfilled demand.

    Funny, how come every example we find is of songwriters making MORE MONEY than before? Funny, how come we're seeing MORE MUSIC being produced than ever before? Funny, how come we're seeing MORE MUSIC being listened to than ever before.

    Damn those details. Sucks when they prove you wrong, doesn't it?

     

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  67.  
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    herodotus (profile), May 26th, 2009 @ 1:07pm

    Re:?

    The music industry is a fluke. In all of recorded history, it is only recently that people have been able to make money off of selling copies of songs.

    Most of the great art of our civilization was made without anything of the sort. Some of the greatest composers in history: Mahler, Schoenberg, Bartok, Bach; all of them had to do all sorts of things other than 'follow their muse'. They had to teach, or write incidental music, or conduct, or make playing editions of other peoples music. Rare was the composer who did nothing other than compose what they felt like composing all day long. Strangely, their lists of works were much larger than those of most songwriters living today.

    If the 'anti-free' crowd were correct, most of the great music of western history would never have been written. Certainly nothing like Bach's 'Art of Fugue' could possibly come to be, as it was never even published.

    Talentless musical celebrities are losing money. Oh the humanity!

     

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  68.  
    identicon
    James Ledbetter, May 26th, 2009 @ 9:57pm

    Your fictional misquote

    Hi, Mike. You say in your post that my critique calls Chris Anderson a "hypocrite." It absolutely does not. "Hypocrite" is your word, your misinterpretation.

    I argue (you could find this in the headline) that Anderson is being ignored, because the supposed business model doesn't work, either for Anderson's own magazine or for the vast majority of businesses.

    I know people will read what they want to read, but I once thought you were actually accurate. Won't make that mistake again!

     

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  69.  
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    Mike (profile), May 26th, 2009 @ 11:02pm

    Re: Your fictional misquote

    Hi James,

    Hi, Mike. You say in your post that my critique calls Chris Anderson a "hypocrite." It absolutely does not. "Hypocrite" is your word, your misinterpretation.

    Thanks for stopping by. I'm sorry if you feel I misquoted you, but your article's subhead says:

    Why doesn’t Wired magazine practice what its editor preaches?

    Not practicing what you preach is the definition of being a hypocrite. I don't see how I misquoted you at all.

    I know people will read what they want to read, but I once thought you were actually accurate. Won't make that mistake again!

    You do write this as well in the article:

    But what about the one business over which Anderson presumably has the most influence—Wired magazine? Why should I have to pay $4.95 for a copy of Wired since, if Anderson's thesis is correct, the magazine would be better off giving itself to me for free? Indeed, if I subscribe for free, the magazine should be, at least according to Anderson, better off still!

    I think any reasonable person would interpret that as you saying "oh look, Anderson is a hypocrite because he's not giving away the magazine for free." If you didn't intend it that way, it's not at all clear.

    I don't believe I misquoted you at all.

    I argue (you could find this in the headline) that Anderson is being ignored, because the supposed business model doesn't work, either for Anderson's own magazine or for the vast majority of businesses.

    But that's wrong. I mean flat out completely wrong. I find it amusing that you accuse me of misquoting you when the entire premise of your article is based on totally misunderstanding Chris' argument.

    Have you read the book? Because you're claiming he's saying stuff that he never said. Meanwhile, I'm paraphrasing you, but just because you didn't use the word "hypocrite" doesn't mean you didn't very clearly imply it.

     

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  70.  
    identicon
    MIGHTYBIGMEDIA, Jun 2nd, 2009 @ 11:20pm

    ... the jury is still out ...

    Has "Free" worked? Yes, in certain instances. A free food sample at Costco might make you purchase a larger quantity to take home. A free MP3 might make you more interested in buying a ticket to a band's concert.

    I'm not, however, as convinced as some here that "Free" is ultimately beneficial for all of the creative arts. Time may prove that it is, but at this point I don't see the empirical evidence. Yes, there is much more music out there, but the quality across that mass isn't anything to praise. True, there is more video available on YouTube than all of the footage network television produced since its inception, but again... quality?

    The expanding access that is part and parcel of today's internet is a wonderful thing, and no doubt will allow artists who never had a shot before to gain some level of notoriety. The question is, will they have to drive a cab their entire lives to pay for it. I think the jury is still out on that one.

     

    reply to this | link to this | view in thread ]


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