Jay-Z's Favorite New Rapper: Free Music Is The Future

from the more-artists-getting-it dept

Haggis points us to an article about a guy who's been called "Jay-Z's favorite new rapper," who seems to be working with all the big names in the music business these days. But, Olubowale Victor Folarin, who goes by the name Wale (pronounced wah-lay) understands the importance of "free" within a business model. After all... it's how he got discovered:

Initially, he gained attention by making mix tapes available for free on the internet. Immediately they caught the eye and ear of musical magpie and producer Mark Ronson.

But, wait... wasn't the RIAA telling us that mixtape makers were criminals who needed to be thrown in jail while having their homes raided by SWAT teams? Looks like Wale understands the lessons of free music:

"Free music is the way for the future. To get your music off the ground you've got to give it away for free at first."

And apparently it's the way of big popular bands as well. So, who is free music bad for again? Oh, right. The folks who bet their entire business on selling plastic discs and refused to embrace what technology allows.

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Moby Shows (Again) That Free Music Doesn't Cannibalize Paid Music

from the *sigh* dept

To hear the recording industry tell it, you would think that free music means that musicians have nothing left to sell. That's obviously false, as we keep seeing over and over again that musicians who connect with fans (rather than suing them) and give them something worth buying (rather than forcing the same old thing on them) have no problem selling plenty, despite any "piracy." In fact, there's increasing evidence that free music isn't even a real substitute for paid music, anyway. Earlier this year, we wrote about Corey Smith, and the experiment he ran last summer. Smith offers up all his music for free on his website, but still sells tracks on iTunes. The experiment involved removing the free downloads -- and watching as the iTunes sales fell. This is the exact opposite of what the recording industry lawyers insist will happen.

It looks like something similar is happening with Moby, as well. In an email to Bob Lefsetz, he points out that the new song that he's giving out for free is turning into a chart topper in sales as well:

How's it going?
The album just came out and it would be #1 euro charts if not for michael jackson re-releases.
So that's good.
But here's something funny: the best selling itunes track is 'shot in the back of the head'.
Why is that funny?
Because its the track we've been giving away for free for the last 2 months and that we're still givng away for free.
Odd.
How are you?
Moby

Of course, it probably helps that Moby doesn't treat his fans like criminals.

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Details Released On The Radiohead Experiment Results: A Tremendous Success

from the good-for-them dept

While Trent Reznor has been very open in discussing the results of his various business model experiments, Radiohead has been notoriously quiet about it -- leading some to falsely assume that the experiment was a failure. CNN even called it one of the dumbest moments in business last year. That seemed ridiculous on its face, as it was quite clear that the experiment was a huge success for Radiohead, even if the band was quiet about the numbers. However, Radiohead's publisher has now come out and revealed some of the numbers and debunked the myth that the experiment was a failure (thanks to SteveD for sending this over). Instead, it turns out that Radiohead made much more money from this experiment than from their previous album. The band's music was spread much more widely than previous albums, with over 1.75 million physical albums sold (and that's not counting all of the paid downloads) -- as compared to its previous albums, which all sold in the hundreds of thousands. About the only downside to the experiment was that the band found itself talking about the experiment more than the music.

Now, of course, some will point out that this experiment isn't very representative, because Radiohead got a huge boost by being the first high profile band to do this. And that's absolutely true. But that doesn't mean the business model doesn't work at a more reasonable level. Obviously, Radiohead got a big boost from doing something unique and different, but that just gives other bands reasons to look at not just copying Radiohead, but adding more unique offerings themselves. That's how business models innovate, by trying out new stuff and trying to attract attention. Unfortunately, though, we still have big record labels who think business model innovation is having Congress protect your old business model.

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Trent Reznor Gives People A Reason To Buy Latest CD Even Though It's Free Online

from the keeps-showing-how-he-gets-it dept

It's getting rather repetitive to show what a good job Trent Reznor is doing in showing how Nine Inch Nails is embracing the new business models available to the music industry, but he's doing such a consistently good job of it, it's so useful as an example. The latest move is that he's now releasing his last album, The Slip, which was offered as a totally free download, as a special limited edition CD/DVD and deluxe vinyl. In other words, like he's done multiple times in the past, he's giving fans a reason to buy the physical media beyond just the music. In this case, it's to get a numbered copy, limited to 250,000 that includes a ton of extras.

Sure, there will be plenty of people who don't want it and are perfectly happy with just the music. And Reznor seems perfectly fine with that. However, other fans will want this unique package for themselves. Given how well Reznor has done with "limited edition" physical media, it seems quite likely that this will also be a huge success for Reznor. And, of course, we're not even touching on all the money he'll make from Nine Inch Nails concert gigs. So why do we have the music industry running around like crazy saying that if music is available for free no one can make any money?

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Trent Reznor Continues To Show How Free Music Works In A Business Model

from the smart-guy dept

After his Ghosts I-IV experiment that proved to be a huge success, Trent Reznor wasted little time in releasing the next Nine Inch Nails album as a completely free download. And, of course, he didn't just give it away and pray. At the same time as he released the album, he notified fans of his latest concert.

Now, in an attempt to make that concert (whose tickets are a scarce good people will pay for) even more valuable, he's giving away free tracks of all of the opening acts on the tour. In other words, he's giving people even more reasons to pay to go to the concert. He's giving away that infinite good (the music) to make those scarce goods (the tickets) more valuable. This fits with the model we were discussing just a few weeks ago, of bands giving free downloads to anyone who buys a concert ticket, to boost the value of that ticket. Thanks to everyone who sent this in.

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Bands Should Give Away Their Music With Every Concert Ticket Sold

from the get-them-hooked dept

Well-known music industry commentator Bob Lefsetz has wavered back and forth on the question of whether or not music should be free, but lately it seems that he's gone completely into the "free" camp -- which is nice to see. One of his latest posts explains why bands should figure out ways to give away their music with each concert ticket. As he points out, concert revenue is where most bands make their money these days, so you want to increase the value of those tickets as much as possible. And, generally speaking, many people go to concerts to hear the music they already know. So the more the band can make sure people actually know the band's songs, the happier the fans are going to be at concerts (and the more they'll be willing to pay).

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Don't Read Too Much Into Radiohead's Claim That It Won't Offer Music For Free Again

from the just-wait-and-see dept

Radiohead is making some noise again today, with lead singer Thom Yorke basically saying that the band won't do a promotion giving away free music again. Some are using this to suggest the model was a failure or that those of us who recognize the clear economic trends toward free music were somehow wrong. That's not the case at all. Early on Yorke had admitted that there was no large theory behind the decision to do the name your own price offering. One of the band's managers suggested it and the group went with it as a publicity stunt -- which worked. The fact that the band then pulled down the download offering prior to releasing the actual CD confirmed that the band merely viewed the free offering as a stunt, rather than part of a larger strategy. As such, it's not at all surprising that Yorke would say the band won't do it again. Since they only viewed it as a stunt, repeating the stunt doesn't make sense. They'll come up with some other stunt for the next release. That doesn't, however, mean that the idea was wrong or a failure. Just that the band wants its publicity stunts to be new and different each time. The fact that this most recent one tapped into an obvious trend seems to have been more of a lucky guess than the sign of a well-thought out strategy. The good news is that it's made plenty of others start to realize the power of free music -- even if that line of thought hasn't permeated back to Radiohead and Yorke.

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EMI Brings Newspaper Free Music Giveaway To The US

from the but-what-will-retailers-think... dept

You may recall last summer that Prince made some news by giving away his latest CD to every subscriber to a UK newspaper. The newspaper paid Prince for the promotion, suggesting interesting new business models that could help two industries at once: both the newspaper industry and the recording industry should benefit from such deals. The newspaper pays some money to the musician, but does so in order to get the promotional benefit -- making both sides better off. Of course, music retailers were upset, threatening to boycott Prince, but that seems like a fairly minor concern. The success of the promotion appears to have gotten the attention of at least one of the major record labels. EMI, who is under new management and seems to recognize how it needs to change, is doing a deal with the NY Daily News to give subscribers access to three free downloads. There will be an access code in the paper, and if you punch it in to the Daily News' website, you'll get to pick from a large list of songs (including at least one unreleased track). Again, this seems like a perfectly reasonable strategy, helping two separate industries in one shot -- though, again, it's likely that music retailers aren't going to be thrilled.

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Yet Another Report Of Free Label Music That Isn't

from the details,-details dept

Last week, we noted that the press couldn't stop talking about Last.fm's supposed effort to offer "free" music, when the details showed it was a lot less than the press made it out to be. You'd think that maybe they would be more careful the next time around. However, when you combine the words "free" and "music" it appears that some folks in the press just can't help themselves. Thus, when a company named Qtrax announced "free" file sharing, with the backing of all four major labels, plus iPod compatibility, the press ran with it. The Associated Press and Reuters both ran with it... though, at least the Associated Press has quickly started backtracking after the various record labels all started denying any kind of deal with Qtrax. They admit they're talking, but no deals have been signed -- meaning that Qtrax jumped the gun, as did the reporters who ran with the announcement. Even if the labels do come around on this one, it's a plan that will go nowhere fast. It involves crippling DRM and annoying advertising that won't even be close to effective. This is a non-story turned into a story by the use of two words: "free" and "music."

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Free Music Does Not Conflict With The Free Market

from the economic-principles dept

An associate editor at PC Mag emailed in a link to an opinion piece by PC Mag Editor-in-Chief Lance Ulanoff complaining that the ongoing demise of DRM is actually bad for the music industry -- and even claiming that it goes against basic economic principles. In this, he's flat out wrong. He starts out by trying to explain "basic principles of content, commerce, and our economy," but fails to recognize that the description he gives for economics fits for allocation of scarce goods, but things are different when you're dealing with infinite goods, where efficient allocation no longer is a question. He follows up this incorrect economics lesson by stating:

"Giving up control of content and giving it away free are not rational ideas in a market economy, yet everyone's cheering. Has the world gone mad?"

No, Lance, the world hasn't gone mad. The world (or, at least, much of it) has simply started to understand that basic economics still applies to infinite goods -- and if the marginal cost is zero, then a competitive marketplace will drive the cost to zero. It's not irrational. It's very, very rational. It's exactly as the core principles of economics predict. What's not rational is trying to set up artificial scarcity in a manner designed to shrink the pool of resources out there and to shrink the market itself.

Ulanoff also makes some bizarre statements suggesting that very few bands tour or make any money from touring -- when the facts suggest otherwise. 2007 was the best year ever in terms of concert revenue, up 8% over 2006, and continuing nine straight years of rising revenue. Not only that, but the numbers suggest more bands than ever before are performing live and making more money than ever before performing live. It's not just the top bands that are making money from concerts -- in fact, the percentage made by the top 20 acts and the top 100 acts were smaller in 2007, despite the total amount of concert revenue increasing. As we've seen, every single aspect of the music business has been improving, other than selling plastic discs.

Finally, Ulanoff concludes with this whopper of a prediction:

"giving away content free of charge... [flies] in the face of everything we know about a functioning economy. People will become dissatisfied. Artists will stop making content because they're not getting paid. When there is no content, people will stop buying gadgets to consume that content. In short order, one part of our digital economy will collapse, and it could be followed by countless others."

As we've already pointed out, giving away stuff for free doesn't even remotely fly in the fact of a functioning economy. In fact, historically, a functioning economy has often been improved by giving away things for free. It's usually called "promotions" or "advertising" however. In fact, Ulanoff's salary is most likely paid for because Ziff Davis "gives away his content for free" and sells ads on top of it. That system works quite well and has for years. As for his claim that "artists will stop making content because they're not getting paid," that myth has been put to rest way too many times before. The artists are getting paid. In fact, more people are making money from music today than at any time in history -- it's just that they're not all doing it through selling plastic discs, but by touring and embracing new business models that help the artist make money through different business models. Rather than collapsing, the digital economy is thriving, in large part due to the implicit (and increasingly explicit) recognition of how free isn't just a useful part of the economy, but it actually helps to grow the economy, by increasing the resource base, providing more efficient solutions and opening up new business models.

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Amazon/Pepsi DRM-Free Music Give Away Shows Yet Another Business Model For Free Music

from the for-everyone-but-Doug-Morris-of-course dept

Pepsi did a big promotion with Apple a few years back to give away iTunes songs, and the latest news is that Pepsi has crossed over to the other side and will be doing a similar promotion with Amazon.com offering free DRM-free downloads from all the big labels... except Universal Music. This story actually demonstrates two important points. First, the fact that the labels themselves apparently are pushing this as an alternative to doing the iTunes promotion, shows how some of the bizarre industry logic has twisted things around. The major labels were originally the ones who were totally adamant that iTunes needed to carry DRM, which actually is part of what made Apple so powerful in the first place -- creating tons of lock-in among customers who wouldn't switch to another provider. However, that is coming back to haunt Apple, as the labels are more reluctant to allow it to also offer DRM-free tracks. No doubt, Steve Jobs recognized this fact a year ago when he called for the labels to drop DRM.

A second, perhaps more important point, is that this once again shows that there clearly are business models surrounding "free" music. One of the points that we've tried to make when people claim that there's simply no incentive for anyone to create music if the customer is getting it free is that there's always going to be incentive for someone to pay for the music in some form or another. In this case, it's Amazon and Pepsi who are paying for the music itself ($0.40/track) recognizing that giving away that music for free helps both of them promote their own businesses. In other words, the music is acting as a resource to make their own business models more valuable. I think I've heard that idea mentioned before somewhere. Of course, that doesn't mean the record labels have figured this out. And, it's especially not surprising that Doug Morris has refused to let Universal Music go along with this, as he's already made clear that he doesn't believe in the concept of promotional goods, no matter how much damage it might actually be doing to musicians under the Universal Music umbrella.

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