"As someone else mentioned, perhaps it's time to get back to actually selling music."
By that, you mean selling digital downloads or CDs -- copies of recordings. That's such a small subsection of "the music." I'm not suggesting that anyone stop selling music, or that anyone has stopped selling music. I'm just pointing out that selling the music can be a lot more than just selling copies of recordings.
"Music is the only non-artificial scarcity in the deal. Everything else (even to some extend concert tickets) is an artificial scarcity. Even concerts? ... If you could sell maybe 2000 tickets, you will typically be booked into a 1000 seat soft seater and that is that. The shortage of concert tickets is artificial at that point."
Space in a physical venue is a real scarcity. We're dealing with atoms, not bits. You couldn't offer more seats without getting a bigger room, which requires money and effort because you need the space and the capacity. The marginal cost of adding seats isn't zero ad infinitum. That's a real, natural scarcity, that you can choose to alleviate to a certain extent, depending on the effort and costs you'll willing to deal with. To pretend that the same constraints apply to digital files, which can be copied indefinitely, is what's artificial.
"Heck, think of it this way: If you sold enough recordings in Fairbanks, you might have the money to afford to go there and have a scarce concert."
Why would anyone in Fairbanks want to buy music they've never heard? The reason you don't treat fans who are sharing your music as "little thieves hard at work" is because they're bringing your music to a wider audience of people who might want to buy something.
"So why not sell music, instead of giving it away for free?"
You give away digital recordings for free if you don't want to squander one of your most valuable resources. If you recognize that it costs essentially nothing to distribute digital audio files indefinitely, the smart thing to do would be to use that to your advantage to get people interested in your music, rather than pretending the files are scarce and that people won't get them from other sources, or assuming that people will want to pay for digital recordings they've never heard. Then, you "sell the music" in other ways.
You seem to think that the only way to sell music is to sell plastic discs that have copies of the recordings on them, or to sell access to recordings encoded as 0s and 1s. That's a pretty limited view of what music is. I think there are lots of other ways to sell the music without relying solely on the sales of copies of recordings.
"You think music is valuable; why do you assume MP3 files or music in containers won't be valuable to fans..."
I don't think I said otherwise. Of course digital audio files or other containers are valuable. It's just that value and price aren't the same thing. They may be valuable, but not able to command much of a price, and thus not be a great basis for a business model.
"Does price exist only because of scarcity? That seems to be the general philosophy out here. Price also exists because there is a demand, even if said product is available in abundance -- iTunes is proof you can put a price on a digital file. So, price need not disappear in the face of abundance."
Well, the price pressures on iTunes are still pushes towards zero. Do you know anyone whose iPod contains mostly music from iTunes? $1/song is pretty expensive when you're talking tens of thousands of songs. People use iTunes, but they still get music from other sources.
And I'd argue that there are some scarcities you're paying for with an iTunes purchase, like the convenience of a simple, single, legitimate source for a wide variety of music. By all means, artists should list songs in an iTunes store. But have you heard of any artists living solely off iTunes revenue? You can sell digital audio files if people are willing to pay for the convenience of accessing them a certain way, or if people want to support you with their money, but I don't think it'd be wise to go the iTunes route in place of making digital audio files available, capitalizing on the abundance and offering some other real scarcities. iTunes, sure, but I wouldn't lock audio files up and bet the farm on it.
"Are T-shirts real scarcities? Except for concerts, since no two concerts are identical, I don't see any "scarcity" of musicians that isn't artificial. All "limited edition whatever" are artifical scarcities."
Limited edition goods aren't artificially scarce. Physical goods are scarce because they're made of atoms, not bits. The marginal cost of reproduction is not zero. Sure, you could continue making t-shirts indefinitely, but that requires an ongoing effort. Digital goods are "infinite goods" because no real effort is require on your part for their continued reproduction.
I don't see anything wrong with only choosing to produce a certain quantity of a product, with only putting a certain effort in. That's not artificial scarcity, it's recognizing scarcity and only choosing to alleviate it to a certain extent. The scarcity is natural.
You're right, I don't get it. You keep going on about t-shirts and mini-putt games, but I'm trying to stay focused on the music. You're asserting the value of music... and that's exactly what I'm doing too.
Of course it's the music that's valuable. That's the whole point of my post: free doesn't mean devalued. Music is valuable, even if the digital audio files are free.
I'm not inventing a focus on scarcity. Price exists because of scarcity, it's a mechanism for allocating scarce resources. That it disappears in the face of abundance shouldn't be a surprise. But a price of zero doesn't mean no value.
"Scarcities" are about the music. That's why they're valuable!
I have no idea what you're trying to say. You're setting up a strawman, suggesting that I think artists should just sell t-shirts or posters, and then reasserting the value of "the music" -- which is exactly what I set out to do.
"In the end, the artificial scarcities aren't anywhere near as attractive as the real product, music. Stop selling sizzle, and get back to selling steak."
Okay. What do you think artists should sell? What do you think the "real product" is? What do you mean by selling "the music?"
(And a correction: artificial scarcities are what you don't want to sell -- sell real scarcities)
"The ability to reproduce doesn't change value or cost to produce the work, only at best the end delivery costs. Essentially, if it takes a year to produce an album (write, record, produce, package, etc), that year is a cost to the artist. Those marginal costs are only a small part of the overall costs of music, and for that matter the value of it as well."
Yeah, of course. But those are fixed costs. Sunk costs. Basic economics explains that, in a competitive market, price gets pushed towards marginal cost -- not the fixed cost.
So, of course you want to recoup your expenses, but to think that the price will float way up above the marginal cost of reproduction because of high fixed costs is to ignore some economic fundamentals. It's disconnected from reality.
"To tell an artist that they can no longer make a living only by writing and producing new material because the world has learned how to steal it seems a bit odd."
That would be odd... which is why I never said that. Writing a producing new material is a scarce offering -- that takes time and talent. But artists haven't made money that way over the past few decades anyways. They've made money from selling copies of what they write and produce, by distributing in containers to fans.
I'm suggesting that relying on income from the distribution of containers doesn't make sense when those containers are now digital and have a marginal cost of essentially zero. That's a shaky foundation for a business model. Distribution is no longer a scarcity in most cases. So, look to other scarcities around writing and producing an album, like the artists who've solicited funding from their fans in advance of the creation process.
"What we get is a sea of material that has less value (the Reznor example)... It appears to have the potential of a vicious cycle, where less time and effort can be put into new music because more time and effort has to be put into touring, making appearances, and selling the proverbial t-shirts."
I don't agree with you on the Reznor example. You can say his latest stuff isn't as good, but that's subjective. Certainly, a lot of fans have been supportive. I do agree with you though that there wasn't anything outstanding, imho, on The Slip (but I still like it). But it's a huge leap to say it's quality is because of the new business model. Correlation doesn't imply causation. Artists are often inconsistent with their art. You can't just automatically attribute any weakness in the album to its business model.
About focusing on art versus worrying about the business side of things, that's always been and always will be a problem for artists. This doesn't change much. It's more time that needs to be spent connecting with fans, instead of sucking up to labels and schmoozing with industry execs. Though, I'd argue that connecting with fans around the music is in much closer to proximity to the art than schmoozing with the industry power brokers... but no one's claiming a utopia where artists can make money without trying.
"Some of what I react to on TechDirt is what appears at least to me to be this black and white notion of smartness versus stupidity (as Mike likes to say). "Paywalls are bad." "Free is good." "It's smart to do xxx." "It's dumb to do yyy" "
I agree with almost everything Mike writes on Techdirt. I can see how you might react to some of those comments as black and white, but, imho, Mike does understand the nuances. Like, check out this article from his 2007 series on the economics of free: Recognizing That Just About Any Product Is A Bundle of Scarce And Non-Scarce Goods. That level of detail might not make it into every short Techdirt writeup, but when I read "give the music away for free," I read it against that backdrop. He means the digital audio files. I think the detail is there over time, or if you dig through the backlinks in each article.
"I think there is a lot of gray area, and many valid and valuable hybrids yet to be tried or even invented."
I don't think a hybrid model that depends on artificial scarcity will be all that reliable, but, sure, there are lots of scarcities you can find, lots of different ways to set up a model.
"The problem is that in itself, the "other scarcities" are not a business model mostly because they don't match the value consumers truly look for."
"Other scarcities" doesn't necessarily mean non-music good, but non-MP3 goods. Helping an artist fund a new album, for example, is paying for the scarcity of content creation. That's paying for music without paying for a digital audio file.
"The music is the value, it's the common thread. It's the key item."
Absolutely. Look for the scarcities most directly related to the music -- or better yet, within the music (i.e. creation of new content, an encounter or experience, relationships based on the music, etc..).
"Take away the music, and you are just some guy selling t-shirts. I may not like your t-shirts, but like your music. So I get it online for free and enjoy it, and you don't get a cent."
I'm not suggesting you sell t-shirts instead of selling scarce goods more directly connected to the music. I'm just pointing out that it's a bad idea to rely on selling abundant digital audio files (and that that observation doesn't mean that music has no value, just that digital audio files won't command much of a price). I'm not suggesting that artists only sells t-shirt -- that's a strawman.
"Oh, live shows? Well, let's say I live in Fairbanks, Alaska. Remind me again how many major acts have hit Fairbanks this year?"
Live shows can make sense for some artists. Selling digital audio files or not doesn't make Fairbanks any less remote. But, take advantage of the fact that you can get your music to Fairbanks through the web without having to travel there? Hell, post video from your concert to YouTube or stream it live or something. Connect with fans in Fairbanks, and they'll be more likely to buy other scarce offerings that aren't so location dependent -- membership in a fan club with immediate access to certain things, deluxe edition physical containers for the music, merchandise, a chance to help fund a new album... Come on, there are lots of scarcities that aren't as location-dependent as live shows and aren't as distant from the music as t-shirts.
And why do they want to own it? They want it to illustrate to others their taste and identify who they are as a person. I also believe they want to be part of something bigger than themselves, they want to belong... Ownership then becomes a way of them supporting your community through investing in that community
The tip jar thing helps, but owning the t-shirt here serves as a sign of the connection, like a badge of membership in the community, something that's visible to others.
Yeah, I'll agree that Techdirt may often say "don't rely on selling music" (slightly different than "don't sell music"), but I think that, if you understand the economics of abundance thing, you realize that what's meant by "music" is often "digital audio files" -- that's the main abundant good. But, agreed, the wording is often ambiguous. It's common in conversation to speak of "music" when we specifically mean "digital audio files," so the same thing often happens when writing about it.
"Remove that price, and suddenly the allure of piracy goes out the window. It's no longer cool, and what you are getting has no real value. You are no longer sticking it to the man, because the man stuck it to himself already."
By the way, I'm not really taking about "piracy." Unauthorized distribution factors in, in the sense that if you don't make something available for free, someone else will, but it's pure myth to think that demand will disappear when something's available for free.
I don't buy software, but I don't "pirate" it either. I use free software, open source software that you couldn't "pirate" if you tried because it's legally available for you to use and distribute. It's still pretty "cool" in software circles. If anything, that kind of freedom adds to the "allure." Just ask IBM or Google.
I don't buy it for a second that "what you are getting has no real value" if it's available for free.
And this isn't about "sticking it to the man." I don't feel compelled to "stick it to the man" when he's shooting himself in the foot. If anything, I feel pity. But I sure as hell don't want to be near the gun that's firing.
I think this is the discrepancy that SomeGuy is trying to highlight.
You say that, if music is offered to free for too long, it becomes devalued. Music is only valuable if it costs money. ("The only value in music... is because the store has a $15 price on the CD.")
But then you contradict yourself: "If you want me to pay money for something of value, SELL ME MUSIC. It's the thing I value the most..."
How could you still value music the most and ask someone to sell it to you (implying that they aren't) if music loses its value when it's available for free?
By the way, I'm not suggesting people shouldn't sell music, even copies of it. If someone wants to pay for a digital audio file, why turn them down? A pay-what-you-want thing or selling through iTunes could still allow fans who really want to buy your digital audio files to do so, whether or not they're available for free elsewhere. And, by all means, sell CDs. The physical container is still pretty convenient at a live show. Most of the artists I play with still sell lots of plastic from the side of the stage.
But don't depend on selling abundant goods, or selling physical copies of the albums when the recordings are available online for free. That's asking for trouble. And don't try to stop the recordings from being available -- it's futile and counter-productive. Instead, look at all the other scarcities associated with music to build a more sustainable and complete business model.
"When you talk about the actual music being free and making money off of other things, if you ignore copyright and patents, what are the other things?"
We're not talking about the music being free, but the digital audio files (which can be reproduced ad infinitum). Charging for the scarcities associated with the music doesn't have to mean charging for "other things." Charging for the creation of new music is a perfect example, and artists who've done it charge a premium.
I get what you're saying about the price influencing the perception of value, but you can't divorce that from scarcity. Charging $10 for an MP3 isn't going to make people value it more. But, by all means, if the demand is there, charge a premium for the scarce components of music.
Suzanne, SomeGuy, really enjoyed your conversation! A few things to add.
"What I anticipate is that as millions of musicians begin offering all of the above, none of the offerings will stay scarce."
SomeGuy offered some useful comments already, but I'd also point out that there's no functional equivalence in art. No matter how many female, folk/pop singer/songwriters there are in the world, no one will replace Robyn Dell'Unto in my heart and in my mind; nothing will substitute for the connection I've made with her music.
But, Suzanne, I do think you have a point. The whole democratization of the tools of production and distribution thing also means that musicians are competing with each other more and more.
"The fantasy DIY model has replaced the fantasy get-signed-to-a-label, but both are difficult to achieve successfully."
I like that line, and I'll tentatively agree with you too. Anyone looking for a get rich quick scheme or seeking to be a megastar is going to be just as disappointed.
But I do think there are some ways in which the Internet really does offer some hope (modest hope though -- not necessarily for the wannabe megastars). A band in Seattle can be heard worldwide, but that doesn't mean the world will hear them. But it does mean that it's much more likely for a handful of people to hear them and connect with the music.
I haven't put out any polished recordings of my own music yet, but I've received a handful of totally random emails of support: one from Israel, one recently from a girl who found a Christmas carol recording a did through beemp3.com (a site I've never even heard of). The hope, at least from my perspective, is not that you'll be known worldwide, but that you can build a modest contingent of fans across the globe.
Like, take a look at open source software development. I've been working on the Creative Commons Drupal module. The Internet hasn't made me famous or provided the project with thousands of developers (i.e. open source doesn't mean the Linux kernel), but I've got a grad student at CMU and someone from Denver hacking on it, and users from Spain, Denmark and the States installing it and trying it out. *shrugs*
"Now I am starting to get so many event notices on Facebook, I rarely look at those now either."
I can relate. I've always got 15-20 events in the queue. But I'm increasingly convinced that connecting with fans needs to be more personal... not that the artist needs to be personally involved with every connection, but that you need to connect with individuals, not masses. You need your music to resonate with an individual so that they become a fan. I'm interested in the parallels between "connecting with fans" and evangelization, but that may just be the aspiring theologian in me...
Hey Adam, thanks for the link! I've been an associate member of the FSF for the past two years, big supporter of free software and free culture. I focused on free as in price here, but I intentionally left the title and conclusion ambiguous. I think a free-as-in-freedom approach to art is one of the best ways to add value... trying to put that into practice with my own music, but I'm still in the early stages.
"In the case of music, I pay $0 for the song, which I value (the song which I "connect" with and "embrace") because it is not scarce as a result of easy means of distribution and reproduction. Yet in order to support the artist, I pay $10 for a tote bag, autograph or T-shirt, which I value not nearly as much as the song, because they are scarce?"
Well, no one's saying you can't pay for the song, but it's that (a) the digital audio files are going to be available for free, or (b) you're going to pay for associated scarcities involved with getting the songs/files.
So, you might first encounter the music through a free download or streaming service, or by getting it off a friend. Then, you might end up paying for a CD (a physical container and distribution mechanism for the songs), or paying to be part of a fan club that gives you immediate access to a ton of digital audio files. Or all of the examples that SomeGuy mentioned of paying for the music. And, sure, you might not buy the album you've just downloaded, but you might buy the next one (or the other ones). Or you might not join a fan club right away, but after you've downloaded the music, enjoyed it, attended a concert, etc...
Merchandise (e.g. tote bags, t-shirts) is just one category of scarce goods. "Scarce goods" also refers to all of the other scarcities you could give people a reason to buy into that may be much more directly connected with the music. (Again, see SomeGuy's examples.)
No one's saying "don't sell music." I'm just explaining why you don't need to rely on selling digital audio files (since that's risky business).
"The intrinsic element of music is the idea that it is a form of shared communication. Music is another form of language that speaks in notes rather than letters...
It's not so much the music that has value but the message contained. Just like I can add value to my language by turning the words I use into a book, I can add value to music by collecting the musical ideas into a song..."
Well, I'd say that languages, like English or music, are valuable because you can use them to express an idea or emotion. But yeah, I agree that the real value from a music fan perspective comes from some other connection with the music.
And the music-as-language element is yet another ambiguity with the word music: language, composition, performance, recording, digital audio file... so many different scarcities and abundances in each of the layers.
"You have to stand back and think for it for a second. If something has no price, over time, people will have less sense of value on the product. It is "infinitely replacable", free, and thus not specifically valuable in itself. Losing it would cause you no pain, because you would be able to replace it for nothing. Even if you are a true fan of the music, being able to get it at any time for nothing would diminish your mental value for the object."
Your viewing such a narrow slice of "music." That digital audio files are "infinitely replaceable" doesn't mean that no one is paying money for music, they're just paying for scarce offerings associated with music rather than the abundant ones. Your argument about price dragging the value down only seems remotely plausible if you disconnect digital audio files from the rest of the music ecosystem.
"That to me is the common Techdirt mistake. Replication in and of itself doesn't change the rarity of the song, only of copies. All the duplication in the world won't create a single extra Frank Zappa song (RIP Frankie!). His songs are rare because there won't be any more of them ever. You an duplicate them until you are blue in the face, but you haven't made the music any less rare."
Please, point me to an example of that mistake. I went through extra pains here to make a distinction between the recordings and the music. Having an "infinite good" is precisely about replication -- not creation. It's marginal cost we're talking about. Reproduction. Copying. Not creating new stuff -- that's a huge scarcity because composition takes time and talent -- and we've highlighted examples of artists monetizing it.
Saying that you can distribute and reproduce a musical recording ad infinitum (or "until you are blue in the face") doesn't mean that anyone is saying that the musical composition isn't rare.
"While his fans enjoy the stuff, for the most part NIN / Reznor music isn't scoring all that well, not charting, not getting anywhere near the radio airplay, and generally isn't as "rare" and valuable."
This comment is a bit of a sidenote, but... why is radio airplay is the metric of success for an artist who's turned to the Internet as his primary medium?
"Oh Blaise, the boss will be so glad that you had the extra cup of koolaid."
I suppose that's your way of making the careful and astute observation that I happen to agree with Mike about this.
"Value and price are not directly related, but they are connected in an elastic sort of a way. If price goes way up, it naturally will pull value up with it (trailing indicator). In the same manner, if value is lost, price is dragged down as a result. With the price at zero, the elastic is taut, pulling very hard at the value of music in people's minds.
You cannot maintain both high value and no price for very long. They are almost entirely mutually exclusive."
Correct me if I'm wrong, but I think you're suggesting that without a price associated to music, the corresponding value of music will be pulled down towards nothing as well. Thing is, it's only the digital audio files and infinite goods that have a price pressure of zero. There's lots of price tags on other things. So, to say it's a case of high value and no price is taking a very narrow view of the landscape. Music is more than digital audio files.
1. Even if there was no way to make money, artists never have a desire to share what they create, right? Do you really believe creation is something inward-looking, reclusive, and private? I suspect you're not actually an artist, or you're not actually hording and hiding all of your creations.
2. Read the last paragraph again. No one is suggesting artists should work for free or rely on a tip jar. There are plenty of business models that use zero to an artists advantage, that help them to make more money by giving away abundant goods for free. See a sister post: Free Doesn't Mean Unpaid.
3. Everything on Techdirt is essentially in the public domain, available at no cost. How much more free do you want it to be? Techdirt practices what it preaches.
"While Techdirt will argue this point across all forms of content and I agree with most of it, I'm significantly less convinced that this ideology works quite as well with other forms besides music."
I'd suggest that we have a better idea of how the theory applies to music than it does to videogames, because digital recordings hit that infinite good status at least a decade ago. As noted on the Music Club page: "We regularly use the music industry as a great example of a "leading indicator" industry that is dealing with the issues we talk about way before many other industries will do so."
I believe there scarcities in every space, but it'll take some time to figure out which ones people will pay for, and how to structure a successful business model. The music industry is a great example because its ahead of the curve in terms of being forced to deal with these issues.
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Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: (as Blaise Alleyne)
By that, you mean selling digital downloads or CDs -- copies of recordings. That's such a small subsection of "the music." I'm not suggesting that anyone stop selling music, or that anyone has stopped selling music. I'm just pointing out that selling the music can be a lot more than just selling copies of recordings.
Space in a physical venue is a real scarcity. We're dealing with atoms, not bits. You couldn't offer more seats without getting a bigger room, which requires money and effort because you need the space and the capacity. The marginal cost of adding seats isn't zero ad infinitum. That's a real, natural scarcity, that you can choose to alleviate to a certain extent, depending on the effort and costs you'll willing to deal with. To pretend that the same constraints apply to digital files, which can be copied indefinitely, is what's artificial.
Why would anyone in Fairbanks want to buy music they've never heard? The reason you don't treat fans who are sharing your music as "little thieves hard at work" is because they're bringing your music to a wider audience of people who might want to buy something.
You give away digital recordings for free if you don't want to squander one of your most valuable resources. If you recognize that it costs essentially nothing to distribute digital audio files indefinitely, the smart thing to do would be to use that to your advantage to get people interested in your music, rather than pretending the files are scarce and that people won't get them from other sources, or assuming that people will want to pay for digital recordings they've never heard. Then, you "sell the music" in other ways.
You seem to think that the only way to sell music is to sell plastic discs that have copies of the recordings on them, or to sell access to recordings encoded as 0s and 1s. That's a pretty limited view of what music is. I think there are lots of other ways to sell the music without relying solely on the sales of copies of recordings.
Re: (as Blaise Alleyne)
Hi cram
I don't think I said otherwise. Of course digital audio files or other containers are valuable. It's just that value and price aren't the same thing. They may be valuable, but not able to command much of a price, and thus not be a great basis for a business model.
Well, the price pressures on iTunes are still pushes towards zero. Do you know anyone whose iPod contains mostly music from iTunes? $1/song is pretty expensive when you're talking tens of thousands of songs. People use iTunes, but they still get music from other sources.
And I'd argue that there are some scarcities you're paying for with an iTunes purchase, like the convenience of a simple, single, legitimate source for a wide variety of music. By all means, artists should list songs in an iTunes store. But have you heard of any artists living solely off iTunes revenue? You can sell digital audio files if people are willing to pay for the convenience of accessing them a certain way, or if people want to support you with their money, but I don't think it'd be wise to go the iTunes route in place of making digital audio files available, capitalizing on the abundance and offering some other real scarcities. iTunes, sure, but I wouldn't lock audio files up and bet the farm on it.
Limited edition goods aren't artificially scarce. Physical goods are scarce because they're made of atoms, not bits. The marginal cost of reproduction is not zero. Sure, you could continue making t-shirts indefinitely, but that requires an ongoing effort. Digital goods are "infinite goods" because no real effort is require on your part for their continued reproduction.
I don't see anything wrong with only choosing to produce a certain quantity of a product, with only putting a certain effort in. That's not artificial scarcity, it's recognizing scarcity and only choosing to alleviate it to a certain extent. The scarcity is natural.
Re: Re: Re: Re: Re: Re: Re: Re: Re: (as Blaise Alleyne)
You're right, I don't get it. You keep going on about t-shirts and mini-putt games, but I'm trying to stay focused on the music. You're asserting the value of music... and that's exactly what I'm doing too.
Of course it's the music that's valuable. That's the whole point of my post: free doesn't mean devalued. Music is valuable, even if the digital audio files are free.
I'm not inventing a focus on scarcity. Price exists because of scarcity, it's a mechanism for allocating scarce resources. That it disappears in the face of abundance shouldn't be a surprise. But a price of zero doesn't mean no value.
"Scarcities" are about the music. That's why they're valuable!
I have no idea what you're trying to say. You're setting up a strawman, suggesting that I think artists should just sell t-shirts or posters, and then reasserting the value of "the music" -- which is exactly what I set out to do.
Okay. What do you think artists should sell? What do you think the "real product" is? What do you mean by selling "the music?"
(And a correction: artificial scarcities are what you don't want to sell -- sell real scarcities)
Re: Re: Re: Re: Re: Re: Re: (as Blaise Alleyne)
Yeah, of course. But those are fixed costs. Sunk costs. Basic economics explains that, in a competitive market, price gets pushed towards marginal cost -- not the fixed cost.
So, of course you want to recoup your expenses, but to think that the price will float way up above the marginal cost of reproduction because of high fixed costs is to ignore some economic fundamentals. It's disconnected from reality.
That would be odd... which is why I never said that. Writing a producing new material is a scarce offering -- that takes time and talent. But artists haven't made money that way over the past few decades anyways. They've made money from selling copies of what they write and produce, by distributing in containers to fans.
I'm suggesting that relying on income from the distribution of containers doesn't make sense when those containers are now digital and have a marginal cost of essentially zero. That's a shaky foundation for a business model. Distribution is no longer a scarcity in most cases. So, look to other scarcities around writing and producing an album, like the artists who've solicited funding from their fans in advance of the creation process.
I don't agree with you on the Reznor example. You can say his latest stuff isn't as good, but that's subjective. Certainly, a lot of fans have been supportive. I do agree with you though that there wasn't anything outstanding, imho, on The Slip (but I still like it). But it's a huge leap to say it's quality is because of the new business model. Correlation doesn't imply causation. Artists are often inconsistent with their art. You can't just automatically attribute any weakness in the album to its business model.
About focusing on art versus worrying about the business side of things, that's always been and always will be a problem for artists. This doesn't change much. It's more time that needs to be spent connecting with fans, instead of sucking up to labels and schmoozing with industry execs. Though, I'd argue that connecting with fans around the music is in much closer to proximity to the art than schmoozing with the industry power brokers... but no one's claiming a utopia where artists can make money without trying.
Re: Re: Re: Re: Re: To simplify (as Blaise Alleyne)
I agree with almost everything Mike writes on Techdirt. I can see how you might react to some of those comments as black and white, but, imho, Mike does understand the nuances. Like, check out this article from his 2007 series on the economics of free: Recognizing That Just About Any Product Is A Bundle of Scarce And Non-Scarce Goods. That level of detail might not make it into every short Techdirt writeup, but when I read "give the music away for free," I read it against that backdrop. He means the digital audio files. I think the detail is there over time, or if you dig through the backlinks in each article.
I don't think a hybrid model that depends on artificial scarcity will be all that reliable, but, sure, there are lots of scarcities you can find, lots of different ways to set up a model.
Re: Re: Re: Re: Re: Re: Re: (as Blaise Alleyne)
"Other scarcities" doesn't necessarily mean non-music good, but non-MP3 goods. Helping an artist fund a new album, for example, is paying for the scarcity of content creation. That's paying for music without paying for a digital audio file.
Absolutely. Look for the scarcities most directly related to the music -- or better yet, within the music (i.e. creation of new content, an encounter or experience, relationships based on the music, etc..).
I'm not suggesting you sell t-shirts instead of selling scarce goods more directly connected to the music. I'm just pointing out that it's a bad idea to rely on selling abundant digital audio files (and that that observation doesn't mean that music has no value, just that digital audio files won't command much of a price). I'm not suggesting that artists only sells t-shirt -- that's a strawman.
Live shows can make sense for some artists. Selling digital audio files or not doesn't make Fairbanks any less remote. But, take advantage of the fact that you can get your music to Fairbanks through the web without having to travel there? Hell, post video from your concert to YouTube or stream it live or something. Connect with fans in Fairbanks, and they'll be more likely to buy other scarce offerings that aren't so location dependent -- membership in a fan club with immediate access to certain things, deluxe edition physical containers for the music, merchandise, a chance to help fund a new album... Come on, there are lots of scarcities that aren't as location-dependent as live shows and aren't as distant from the music as t-shirts.
Re: Re: Re: Re: Re: Re: Re: Re: They won't continue to be scarce (as Blaise Alleyne)
But the t-shirt often serves as a tangible sign of the connection.
Reminds me of Asthmatic Kitty:
The tip jar thing helps, but owning the t-shirt here serves as a sign of the connection, like a badge of membership in the community, something that's visible to others.
Re: Re: Re: To simplify (as Blaise Alleyne)
Hey Bob,
Yeah, I'll agree that Techdirt may often say "don't rely on selling music" (slightly different than "don't sell music"), but I think that, if you understand the economics of abundance thing, you realize that what's meant by "music" is often "digital audio files" -- that's the main abundant good. But, agreed, the wording is often ambiguous. It's common in conversation to speak of "music" when we specifically mean "digital audio files," so the same thing often happens when writing about it.
Re: (as Blaise Alleyne)
By the way, I'm not really taking about "piracy." Unauthorized distribution factors in, in the sense that if you don't make something available for free, someone else will, but it's pure myth to think that demand will disappear when something's available for free.
I don't buy software, but I don't "pirate" it either. I use free software, open source software that you couldn't "pirate" if you tried because it's legally available for you to use and distribute. It's still pretty "cool" in software circles. If anything, that kind of freedom adds to the "allure." Just ask IBM or Google.
I don't buy it for a second that "what you are getting has no real value" if it's available for free.
And this isn't about "sticking it to the man." I don't feel compelled to "stick it to the man" when he's shooting himself in the foot. If anything, I feel pity. But I sure as hell don't want to be near the gun that's firing.
Re: Re: Re: Re: Re: (as Blaise Alleyne)
I think this is the discrepancy that SomeGuy is trying to highlight.
How could you still value music the most and ask someone to sell it to you (implying that they aren't) if music loses its value when it's available for free?
By the way, I'm not suggesting people shouldn't sell music, even copies of it. If someone wants to pay for a digital audio file, why turn them down? A pay-what-you-want thing or selling through iTunes could still allow fans who really want to buy your digital audio files to do so, whether or not they're available for free elsewhere. And, by all means, sell CDs. The physical container is still pretty convenient at a live show. Most of the artists I play with still sell lots of plastic from the side of the stage.
But don't depend on selling abundant goods, or selling physical copies of the albums when the recordings are available online for free. That's asking for trouble. And don't try to stop the recordings from being available -- it's futile and counter-productive. Instead, look at all the other scarcities associated with music to build a more sustainable and complete business model.
Re: (as Blaise Alleyne)
We're not talking about the music being free, but the digital audio files (which can be reproduced ad infinitum). Charging for the scarcities associated with the music doesn't have to mean charging for "other things." Charging for the creation of new music is a perfect example, and artists who've done it charge a premium.
I get what you're saying about the price influencing the perception of value, but you can't divorce that from scarcity. Charging $10 for an MP3 isn't going to make people value it more. But, by all means, if the demand is there, charge a premium for the scarce components of music.
Re: Re: Re: Re: They won't continue to be scarce (as Blaise Alleyne)
Suzanne, SomeGuy, really enjoyed your conversation! A few things to add.
SomeGuy offered some useful comments already, but I'd also point out that there's no functional equivalence in art. No matter how many female, folk/pop singer/songwriters there are in the world, no one will replace Robyn Dell'Unto in my heart and in my mind; nothing will substitute for the connection I've made with her music.
But, Suzanne, I do think you have a point. The whole democratization of the tools of production and distribution thing also means that musicians are competing with each other more and more.
I like that line, and I'll tentatively agree with you too. Anyone looking for a get rich quick scheme or seeking to be a megastar is going to be just as disappointed.
But I do think there are some ways in which the Internet really does offer some hope (modest hope though -- not necessarily for the wannabe megastars). A band in Seattle can be heard worldwide, but that doesn't mean the world will hear them. But it does mean that it's much more likely for a handful of people to hear them and connect with the music.
I haven't put out any polished recordings of my own music yet, but I've received a handful of totally random emails of support: one from Israel, one recently from a girl who found a Christmas carol recording a did through beemp3.com (a site I've never even heard of). The hope, at least from my perspective, is not that you'll be known worldwide, but that you can build a modest contingent of fans across the globe.
Like, take a look at open source software development. I've been working on the Creative Commons Drupal module. The Internet hasn't made me famous or provided the project with thousands of developers (i.e. open source doesn't mean the Linux kernel), but I've got a grad student at CMU and someone from Denver hacking on it, and users from Spain, Denmark and the States installing it and trying it out. *shrugs*
I can relate. I've always got 15-20 events in the queue. But I'm increasingly convinced that connecting with fans needs to be more personal... not that the artist needs to be personally involved with every connection, but that you need to connect with individuals, not masses. You need your music to resonate with an individual so that they become a fan. I'm interested in the parallels between "connecting with fans" and evangelization, but that may just be the aspiring theologian in me...
Re: Great work! (as Blaise Alleyne)
Hey Adam, thanks for the link! I've been an associate member of the FSF for the past two years, big supporter of free software and free culture. I focused on free as in price here, but I intentionally left the title and conclusion ambiguous. I think a free-as-in-freedom approach to art is one of the best ways to add value... trying to put that into practice with my own music, but I'm still in the early stages.
Re: To simplify (as Blaise Alleyne)
Well, no one's saying you can't pay for the song, but it's that (a) the digital audio files are going to be available for free, or (b) you're going to pay for associated scarcities involved with getting the songs/files.
So, you might first encounter the music through a free download or streaming service, or by getting it off a friend. Then, you might end up paying for a CD (a physical container and distribution mechanism for the songs), or paying to be part of a fan club that gives you immediate access to a ton of digital audio files. Or all of the examples that SomeGuy mentioned of paying for the music. And, sure, you might not buy the album you've just downloaded, but you might buy the next one (or the other ones). Or you might not join a fan club right away, but after you've downloaded the music, enjoyed it, attended a concert, etc...
Merchandise (e.g. tote bags, t-shirts) is just one category of scarce goods. "Scarce goods" also refers to all of the other scarcities you could give people a reason to buy into that may be much more directly connected with the music. (Again, see SomeGuy's examples.)
No one's saying "don't sell music." I'm just explaining why you don't need to rely on selling digital audio files (since that's risky business).
Re: Music is a Shared Language (as Blaise Alleyne)
Well, I'd say that languages, like English or music, are valuable because you can use them to express an idea or emotion. But yeah, I agree that the real value from a music fan perspective comes from some other connection with the music.
And the music-as-language element is yet another ambiguity with the word music: language, composition, performance, recording, digital audio file... so many different scarcities and abundances in each of the layers.
Re: Re: Re: (as Blaise Alleyne)
Your viewing such a narrow slice of "music." That digital audio files are "infinitely replaceable" doesn't mean that no one is paying money for music, they're just paying for scarce offerings associated with music rather than the abundant ones. Your argument about price dragging the value down only seems remotely plausible if you disconnect digital audio files from the rest of the music ecosystem.
Re: Re: Re: Re: Re: (as Blaise Alleyne)
Please, point me to an example of that mistake. I went through extra pains here to make a distinction between the recordings and the music. Having an "infinite good" is precisely about replication -- not creation. It's marginal cost we're talking about. Reproduction. Copying. Not creating new stuff -- that's a huge scarcity because composition takes time and talent -- and we've highlighted examples of artists monetizing it.
Saying that you can distribute and reproduce a musical recording ad infinitum (or "until you are blue in the face") doesn't mean that anyone is saying that the musical composition isn't rare.
This comment is a bit of a sidenote, but... why is radio airplay is the metric of success for an artist who's turned to the Internet as his primary medium?
Re: (as Blaise Alleyne)
I suppose that's your way of making the careful and astute observation that I happen to agree with Mike about this.
Correct me if I'm wrong, but I think you're suggesting that without a price associated to music, the corresponding value of music will be pulled down towards nothing as well. Thing is, it's only the digital audio files and infinite goods that have a price pressure of zero. There's lots of price tags on other things. So, to say it's a case of high value and no price is taking a very narrow view of the landscape. Music is more than digital audio files.
Re: You kwow what? you're right. (as Blaise Alleyne)
1. Even if there was no way to make money, artists never have a desire to share what they create, right? Do you really believe creation is something inward-looking, reclusive, and private? I suspect you're not actually an artist, or you're not actually hording and hiding all of your creations.
2. Read the last paragraph again. No one is suggesting artists should work for free or rely on a tip jar. There are plenty of business models that use zero to an artists advantage, that help them to make more money by giving away abundant goods for free. See a sister post: Free Doesn't Mean Unpaid.
3. Everything on Techdirt is essentially in the public domain, available at no cost. How much more free do you want it to be? Techdirt practices what it preaches.
Re: Re: Re: Re: *Applause* (as Blaise Alleyne)
I'd suggest that we have a better idea of how the theory applies to music than it does to videogames, because digital recordings hit that infinite good status at least a decade ago. As noted on the Music Club page: "We regularly use the music industry as a great example of a "leading indicator" industry that is dealing with the issues we talk about way before many other industries will do so."
I believe there scarcities in every space, but it'll take some time to figure out which ones people will pay for, and how to structure a successful business model. The music industry is a great example because its ahead of the curve in terms of being forced to deal with these issues.