Ad Supported Music Label A Step In The Right Direction
from the just-a-step dept
The NY Post is running a story that everyone seems to be submitting here. It’s about former Engadget (and Gizmodo) editor Pete Rojas teaming up with Downtown Records to launch a new music label that will offer the music of artists for free, while focusing on ad-driven business models. The details are exceptionally vague in the article, but it sounds like the plan will be to create some sort of destination site that will host ads, and try to attract people to listen to the music (similar to YouTube). We’re hoping that Pete is joking with the name on the plan, which only Ed Zander of Motorola could love: RCRD LBL. This is definitely a step in the right direction, though, as it recognizes that the music acts as the promotion — though, the rest of the business model opens up plenty of questions. Still, it shows that a new generation of entrepreneurs are willing to push these new types of business models, and those that insist on retaining the old business models may find themselves standing around holding buggy whips before long.
Comments on “Ad Supported Music Label A Step In The Right Direction”
Radio
If I wanted ads with my music I’d still be listening to AM radio…
Non-Ads
Mike,
I enjoy your work…keep it up. Take a look at our start up model – http://www.9thxchange.com. Let me know what you think.
Thanks,
Dino
9thX
Add value- stop the cliche
quote
“those that insist on retaining the old business models may find themselves standing around holding buggy whips before long.”
Let’s start counting how many times Mike uses this derogatory cliche.
Buddy whips became unneeded- music is vitally craved. They are not comparable.
You fail to show why both “free” models and the “old” model can’t co-exist perhaps indefinitly. One does not preclude the other.
Re: Add value- stop the cliche
TiredofLame is still confused.
Buddy whips became unneeded- music is vitally craved. They are not comparable.
I’m not saying *music* is the buggy whip. The business of *selling* music directly is the buggy whip. It, too, is becoming unneeded. That doesn’t mean music is obsolete. To the contrary. The *music* business is booming. As we pointed out, more music is being created today than ever before, and all sorts of businesses related to the music business are absolutely booming.
The only one struggling is the recording industry — which is based on the obsolete business model of selling music delivery.
You fail to show why both “free” models and the “old” model can’t co-exist perhaps indefinitly. One does not preclude the other.
It does eventually. I have shown this, but perhaps you missed it. Let me illustrate:
You are selling horse-drawn carriages. Ford comes along and starts selling Model Ts. Yes, the two could co-exist in theory, but the reality is that consumers will quickly move to the Model T because it provides them with something more.
So, yes, you can keep trying to sell music directly, but if everyone else is giving it away free *and* making more money on the complementary products, you’re not going to get much business. People are going to ask why they need to pay for your music when everyone else is giving it away free and succeeding.
This is just the sort of forward thinking that wil
people to pay for music/content.
AM radio, FM radio, TV; I am a channel hopper, jumping away from the commercials. Odd how you can know in moments if it is advertising or content? When are the content makers going to learn to do embedded commercials/advertisements?
The Movie industry has started; Coke, Pepsi, Ford all ‘buy’ exposure in movies. Some Rap musicians have even been paid to place McD Big Mac in songs.
i give it 5 days for an article about RIAA trying to stop this new venture
Not here too!!
You fail to show why both “free” models and the “old” model can’t co-exist perhaps indefinitly. One does not preclude the other.
Um… paying $18 for a CD and getting it for free do preclude each other.. who would pay for something that is being given away at the same quality? The only thing that is stopping *everyone* from downloading music at it’s value is outdated laws.
Buddy[sic] whips became unneeded- music is vitally craved. They are not comparable.
Vitally craved? Well, whatever, maybe it is, at that. :)The point, though, is that paying $18 for a CD and buggy whips are both things of the past. We, the general public, know how hard it is to put music on a CD (it isn’t), and refuse to pay $18 for something that costs the labels almost nothing. That is how they are comparable.
Are you really not getting this?
Response to the infamous Joe
Quote
“The only thing that is stopping *everyone* from downloading music at it’s value is outdated laws.”
Joe, some people will pay for music as an arms length transaction even if there were no laws relating to music transactions. I can pick corn for free from a field (even call it “gleaning”) with zero chance of getting caught (for all intents and purposes the legal system does not apply) but I choose to buy it in an arms length transaction. Hence, the most likely scenario is that the “free” music market and the paid music market will coexist.
Stealing corn and downloading Korn.
. I can pick corn for free from a field (even call it “gleaning”) with zero chance of getting caught (for all intents and purposes the legal system does not apply) but I choose to buy it in an arms length transaction.
Holy cow, TiredofLame, you’re getting dangerously close to the point… are you ready? 😛
1. Picking corn is stealing. I know, I know, you think copyright infringement is stealing– but to the *courts* there is a difference. If you take a farmer’s corn, he has 1 less ear of corn to sell. Sure, it’s negligible, but there it is, you have deprived him of 1 ear of corn. Now, if I were to download a Korn album (not that I would, yuck!) I have not taken anyone’s Korn album.. there is, if you count, 1 more corn album than there was before I copied it. If you could take a picture of an ear of corn, eat the picture and get the same *exact* nourishment from it, then we’d have a valid comparison.
So, to sum it all up: If a farmer has 100 ears of corn and you take one.. he has 99 now, and you have 1. If there are 100 Korn songs and I download one, there are now 101 Korn songs! Wait a second! I just made a song! For free!! If I can make it for free… why would I sell it for $18? Gosh, that seems pretty underhanded. To move it farther.. if I make a copy of my Korn song for my buddy, there’s now 102 Korn songs.. holy cow!! I’m like a digital media Jesus.. I can feed everyone all the Korn they want! (Maybe I should have used Phish instead of Korn) 😛
Even further (and this is as far as I’m going with it, I promise) My buddy can make a copy of *his* Korn song and give it to another friend and now there’s 103 Korn songs! All without Korn, or the record label, lifting a finger or paying a dime! (Some might venture to say by distributing Korn songs I’m doing the record labels’ job, even!)
See where it’s going? I hope so. Embrace the future- or become the past.
Re: Stealing corn and downloading Korn.
You are stealing from Korn…having downloaded their song illegally is the same as stealing the corn. The song whether it’s on a CD or just a bunch of 0’s and 1’s floating in digital space is still a commodity. Just like the farmer invested capital in growning his corn. Korn and their record label invested capital in producing that song. You are stealing, period. There’s no way around it…there’s no rationalizing…you are stealing.
Re: Re: Stealing corn and downloading Korn.
Actually it’s not stealing, as ruled by the Supreme Court.
Re: Re: Re: Stealing corn and downloading Korn.
Actually it’s not stealing, as ruled by the Supreme Court.
——————–
Tell that to the musicians that you’ve stolen from…
Re: Re: Stealing corn and downloading Korn.
You are stealing from Korn…having downloaded their song illegally is the same as stealing the corn. The song whether it’s on a CD or just a bunch of 0’s and 1’s floating in digital space is still a commodity. Just like the farmer invested capital in growning his corn. Korn and their record label invested capital in producing that song. You are stealing, period. There’s no way around it…there’s no rationalizing…you are stealing.
No. It’s infringement. It’s not stealing. It’s an important distinction. In stealing, something is taken away from the producer. Nothing is taken away here. The fact that capital was invested is meaningless. Copying is not stealing.
Dear children…yes, CD-Rs are very inexpensive and we know that you can use your crap computer to burn the bestest mix CD ever EVER for pennies. However, SOME-FREAKIN’-BODY had to pay to CREATE that music. When you buy a CD or download a digital track, you’re not paying for the replication, you’re paying for the creation. It’s like saying a pizza should be free because the box it’s in costs next to nothing. There’s a thing that normal businesses have called overhead. If Mike’s blessed theory of an “everything is free” economy was ever fully realized, we would all be in trouble (anybody out there work for a company that SELLS stuff? You might be out of a job) – and every song would have a 30 second ad right in the middle of it! I imagine Mike would change his tune if he actually had to create content rather than riding on the backs of other people’s articles while depositing checks from his advertisers. Whatever.
Re: Re:
However, SOME-FREAKIN’-BODY had to pay to CREATE that music.
Again, I’m not sure why this is so hard to understand. We absolutely agree that it costs money to create music. That doesn’t mean that it’s the best business model to sell the music. Somebody has to pay to create BMW commercials, but BMW doesn’t sell the commercials. In fact, they pay TV stations to give them away… because they know it helps sell complementary products: the BMWs.
Same thing with music. It helps sell all sorts of complementary products.
It’s like saying a pizza should be free because the box it’s in costs next to nothing.
Please learn the difference between scarce and infinite goods before making bad analogies.
If Mike’s blessed theory of an “everything is free” economy was ever fully realized, we would all be in trouble (anybody out there work for a company that SELLS stuff? You might be out of a job) – and every song would have a 30 second ad right in the middle of it!
Please go back and read what I wrote. I never said “everything is free.” I said exactly the opposite. I said some stuff is free and that makes all the other stuff much more valuable. The infinite components are free. The scarce components cost money. So your argument that I say everything is free is completely wrong.
I imagine Mike would change his tune if he actually had to create content rather than riding on the backs of other people’s articles while depositing checks from his advertisers. Whatever.
You do realize our business has almost nothing to do with advertising, and we make most of our money creating content? The thing is, we do so while understanding this business model. The creation of *new* content (as you say in the beginning of your post) costs money. So we get people who value that content to pay us to create it. But then we let them do what they want with it.
Eh. As you say, whatever.
Re: Re: Re:
You do realize our business has almost nothing to do with advertising, and we make most of our money creating content? The thing is, we do so while understanding this business model. The creation of *new* content (as you say in the beginning of your post) costs money. So we get people who value that content to pay us to create it. But then we let them do what they want with it.
————-
Mike I’m just going to start taking this content that you create and just copy it and give it away to people…I’m sure you wont mind…being a champion of this “Business Model” and all…so thanks dude…i’m a big fan…thanks for the free stuff…
Re: Re: Re: Re:
Mike I’m just going to start taking this content that you create and just copy it and give it away to people…I’m sure you wont mind…being a champion of this “Business Model” and all…so thanks dude…i’m a big fan…thanks for the free stuff…
Stu, go for it. I don’t understand why people raise this argument every time we have this discussion. We’ve discussed it before:
http://www.techdirt.com/article.php?sid=20070412/183135#c612
Please, go right ahead. As per what we say, it helps us. It doesn’t hurt us one bit.
Please go ahead and create a site and help promote us. That’s fantastic.
Re: Re: Re:2 Re:
Mike…you are getting your $ from somewhere right? That’s valid to say isn’t it? You say it’s from the creation of content…then someone is paying you for the content, correct?
What if they just said forget it Mike…we don’t want to pay you for your content anymore…we’re just going to take it for free. Thanks.
You’d be pretty upset right…and suddenly you’d probably have some pretty negitive things to say about the “taking your shit for free” business model…wouldn’t you?
Re: Re: Re:3 Re:
What if they just said forget it Mike…we don’t want to pay you for your content anymore…we’re just going to take it for free. Thanks.
They’re paying for the *creation* of the content. That is for *new* content, which is scarce. So if they say they’re not going to pay for it any more, the new content won’t exist. The companies value the creation of the content, and therefore they pay for it.
You’d be pretty upset right…and suddenly you’d probably have some pretty negitive things to say about the “taking your shit for free” business model…wouldn’t you?
Nope, because our business model is designed not to worry about that. For the companies that pay for our content, they’re free to do with it whatever they want. So there’s nothing to get pissed about.
How is this different??
How is this different from any of the current models, be it Pandora, AM, FM or anything else? When you have a story for us, call us back.
LOL
Apparently, most of you have not read all of Mike’s series on the economics of zero. Some of you have lightly skimmed it. A better business model does NOT involve giving away music for free and HOPING that users click on ads.
I will give you a living example: I have a sister who RARELY purchases music CDs. It has been YEARS since she bought one. Recently, she heard music from a particular artist through various sources. She heard her older brother (I’m her younger brother) playing it in his apartment. She heard the artist numerous times on the radio. She listened to his stuff on the Internet. She then persuaded her husband, her brother, and her brother’s wife all to pay $80 each to attend a big concert hosted by this particular artist. If she had not heard all that music FOR FREE, she would not have scored $320 in favor of the artist.
Wanting digital music to be free is not being cheap. Creating music takes work. We all understand that. However, the distribution cost is zero. As Mike teaches, people should not pay for zero-cost items. These things should be used to drive business elsewhere.
Rebuttal to the infamous Joe
point quote from me:
“Joe, some people will pay for music as an arms length transaction even if there were no laws relating to music transactions.”
While I very much enjoyed your corn/Korn, fish/phish repartee you were the one who initially said “everyone” would download for free if there were no laws relating to it. If one person (me) would still pay for music irregardless than your thesis would be disproven. Or better yet and more interesting in terms of me and you learning something new (that’s one reason I am here) is to hazard a percentage guess about pay vs non pay. I suspect we would not be all that radically different. Here, I’ll take a stab at it. With no laws I say 15 percent would pay and 85% not pay. Therefore, both types of markets would co-exist.
What is your guess?
Re: Rebuttal to the infamous Joe
Here, I’ll take a stab at it. With no laws I say 15 percent would pay and 85% not pay. Therefore, both types of markets would co-exist.
TiredofLame, you remain extremely confused about the business model we are pushing. We’re not saying “some percentage” will pay for the music.
What percentage of people who view BMW ads buy BMWs?
The whole point is that you are growing the overall size of your market by selling a different product.
Daddy's Money.
Here, I’ll take a stab at it. With no laws I say 15 percent would pay and 85% not pay.
I stand by my words. If it weren’t illegal, then it would rapidly be picked up my all sorts of web sites, who would just sell adds on the page that you go to to download the music.. hey! wait a minute! That’s *exactly* what the article is about!! 😛
No one would pay $18 for a CD if the songs were free online and CD-R’s cost next to nothing.. Now, collectors would still want oh, signed copies of CD or vinyl records of old stuff, etc.. but that’s not the the music they are buying, it’s something attached to the music…
Are you telling me that if you were browsing the web and stumbled upon a site that *legally* allowed downloads of your favorite music DRM free, you’d still go to itunes and pay a buck for the music? You and I both know the artist sees almost nothing of that $1, so don’t try the ‘support the artist’ mumbo jumbo.. I support the artist by going to the show and buying a T-shirt or buying them a drink (depending on the size of the show) and by telling other people “Hey, check out this guy, here’s a copy of the CD.. I’m gonna go see him in Boston next friday!”
@AC 8
When you buy a CD or download a digital track, you’re not paying for the replication, you’re paying for the creation.
I would agree, but I can go to a music store and find music that was popular in 2000 selling for $10.. are you trying to say that they still haven’t made back the overhead? Am I *still* paying for the creation, and $10 a CD after 7 years? Mind you, it started off at $18 a CD for the first year or three… I agree that there is an initial overhead for recording and such– and I admit I don’t know how much that comes out to be.. I’m sure it’s highly overpriced because record labels can front a huge bill because they’re raping the suckers that buy their CDs. (Some people might even say that the price is so outrageous to keep independent artists from being able to afford it.. some people.)
@Alex
How is this different from any of the current models, be it Pandora, AM, FM or anything else?
Because it’s not someone paying the label to give it away for free, it’s a label giving it away for free. Pandora, AM and FM have to pay fees to give that music away. Sure, selling adds isn’t new or inventive– but for some reason major labels can’t figure it out.
what you guys still don’t get (at least some of you don’t)…
i’m the creator/owner of the music. i get to decide/determine how my music is sold/distributed. if i choose to give it away for free, so be it.. if i choose to sell it, again, my right to do so.
you as a consumer, have a right to bitch about my choices if you choose. you as a consumer don’t have a right to copy/download my song and then give it to 50,000 of your closest friends…
if i create a song, and you hear it on the radio, by all means, copy it and listen to it for your own pleasure. however, don’t copy it, and then upload it for 10,000 friends to listen to….
if we all agree to this, then we really have no issue…
i suspect that you won’t agree to this. i suspect that because of your culture/growth, you view downloading as a non-crime event…
i laugh at some of the arguments saying that because you can copy a song, then you haven’t harmed the owner of the song, because you wouldn’t have purchased the song anyway.. if you wouldn’t have purchased the song, then why are you downloading it.. it obviously has some value to you, … so pay for it.
i also laugh, as none of you would say, hey.. why don’t we simply copy US currency.. I mean think about it, the same convoluted logic would apply. if you copy/create a fake $100 bill, you have ‘added’ to the number of US $100 nills in circulation.. you haven’t ‘hurt’ the US treasury, as you haven’t taken one of their bills…
but i doubt the US Treasury/Secret Service would agree with you on this one…
amazing how people can construct arguments to justify the actions that they want to pursue…
peace
sam
Re: Re:
Sam, I pointed most of this out yesterday. I’m not sure if you haven’t gone back and read the responses to your comment yesterday or if you’re just ignoring it and repeating the incorrect statements you made again.
i’m the creator/owner of the music. i get to decide/determine how my music is sold/distributed. if i choose to give it away for free, so be it.. if i choose to sell it, again, my right to do so.
I have never said otherwise. I have never said that you shouldn’t be allowed to try to sell your music. I’ve only said it’s a bad business model that will get worse and worse.
you as a consumer, have a right to bitch about my choices if you choose. you as a consumer don’t have a right to copy/download my song and then give it to 50,000 of your closest friends…
Indeed. Why do you think I’ve said otherwise. I’d ask you to apologize for making a statement that suggests I’ve said something different.
if we all agree to this, then we really have no issue…
But we do have an issue, because you keep insisting I’m saying stuff I haven’t.
i suspect that you won’t agree to this. i suspect that because of your culture/growth, you view downloading as a non-crime event…
No. I view it as copyright infringement. That’s why I don’t participate. However, I also view it as a dumb business model decision from the producer’s side.
if you wouldn’t have purchased the song, then why are you downloading it.. it obviously has some value to you, … so pay for it.
Price and value are not the same thing.
You value air. Do you pay for it?
i also laugh, as none of you would say, hey.. why don’t we simply copy US currency..
I explained this yesterday. Please learn the difference between scarce and infinite goods. Otherwise your arguments don’t make much sense.
Play it again, Sam.
i suspect that you won’t agree to this. i suspect that because of your culture/growth, you view downloading as a non-crime event…
You are correct.. and here’s the kicker.. those people today who don’t view downloading your song as a crime are the people in charge of making/changing the laws tomorrow. More and more people *are* speaking out– they are saying “We won’t pay for recorded music by itself.” Are you listening? Do you think every day there are less people downloading, or more? Adapt or die. (In an economic sense, of course.) 🙂
.. if you wouldn’t have purchased the song, then why are you downloading it
Have you ever seen a movie trailer and thought, “Meh, I’ll wait for video.” or, like me, “Meh, I’ll wait for the cable network premiere.”? It’s the same thing.. the music in question may not be worth $18, but sure, if it’s free I’ll take a listen. It has no value to me– I can go either way– but if it’s offered easily for free (and it is) then sure, I’ll check it out. For me, the the worst that happens is I have to delete the song because it’s crap. For you, the best that happens is you get a new fan where one wasn’t before. I seriously don’t understand how it’s not obvious.
i also laugh, as none of you would say, hey.. why don’t we simply copy US currency
Either you have no idea how paper money works, or you’re grasping at straws. I’m not going to go into it, read more here on how currency works.
amazing how people can construct arguments to justify the actions that they want to pursue…
I was just thinking that myself, Sam.
Re: Play it again, Sam.
hey Joe…why don’t you go pay some money and buy some music instruments and equipment..then why don’t you invest your time and write some songs…then go to a recording studio and pay to record those songs…pay a producer to supervise the recording…pay an engineer…pay someone to do mixing and pay someone to do mastering…then pay for CD replication, album artwork etc….then pay for advertising to promote the music…
pay your tens of thousands of dollars to produce your music…pay that money and time and hard work…
and then just give it away…
if you go ahead and do that then i’ll listen to your arguments…
otherwise you are just a f**king thief…that’s what you are…a thief…
Some would pay for music
Even if free ad-free downloas were available, those on bad connections would still buy music, especially if theri tastes were not mainstream enough to leach at LANs or from shered folders at libraries and so on.
When an artist with a Top 100 album signs with RCRD LBL, this will be news.
I am tired of hearing the phrase “adapt or die”. Just because a majority of kids think it’s okay to download music for free, does not justify it. And just because you don’t think it’s “fair” to charge $10 for a CD released in 2000, doesn’t mean you should steal it (take it, whatever).
What if they sold all CD’s for $5? You may start buying CD’s again, but there would be a significant percentage of people who don’t. What if they sold all CD’s for $1 (and the record companies/artists still made a profit)? There would still be a small percentage of people who are too lazy to make it to the store or too impatient to wait for a mail order. So, my question is: with so few people, is it not justified anymore? What percentage of people have to stop downloading for you to agree it’s not okay; or, what kind of profits would you like the record companies to make for it to be “okay” with you?
My point is, you have drawn an arbitrary line in the sand of profits, saying the amount of money they make is not okay; and, because everyone and their brother downloads songs, that justifies you stealing as well. Therefore, they need to change their business model.
Gas is expensive. Oil companies make a lot of money. Why not steal from the pumps? Because you’ll most likely get caught. If you were as likely to get caught downloading music, you wouldn’t. And, when the RIAA starts prosecuting people, everyone screams foul play.
And please stop saying stuff like: “i downloaded a cd and it was cool so i bought the band’s t-shirt for $20! i totally used that cd as advertisement for myself.” Great, that may work for you; and, as righteous as you may be, the majority of people do not use it as advertisements, samples, or anything other than music that they downloaded and listen to for free.
Re: Re:
I am tired of hearing the phrase “adapt or die”. Just because a majority of kids think it’s okay to download music for free, does not justify it. And just because you don’t think it’s “fair” to charge $10 for a CD released in 2000, doesn’t mean you should steal it (take it, whatever).
Again, nothing I have said says that it’s okay to infringe on copyrights. You are arguing against something I haven’t said.
...
Kyle is correct. Judges have explicitly stated that illegal downloads are a form of copyright infringement. “Stealing” implies the robber removed the original from the owner’s possession. When it comes to downloading, no such event takes place. You cannot compare the stealing of materialistic things to the copying of information.
Piracy is illegal. If it wasn’t, I don’t think it’d be called ‘piracy’. No one is arguing the legality of it. Mike’s articles do not condone piracy. He merely points out how the new market will continue to take advantage of the free publicity that comes from legally sharing music files (from artists who have allowed it) and make more money in the long run.
Re: ...
He merely points out how the new market will continue to take advantage of the free publicity that comes from legally sharing music files (from artists who have allowed it) and make more money in the long run. – Buzz
———————
I have yet to see any musician or record label that has found this Shangri-La of supposed profits “in the long run”. If this new business model was working so well wouldn’t record labels and artist be raking in the profits? Last time I checked less and less money is being made.
I think that this feel good atmosphere of giving away songs for free as a new business model is similar to the feel good give everything away for free business models of early web start-ups before the bubble burst. Obviously that business model didn’t work…you had all these start ups whose business models didn’t factor in actually making profit…they did factor in spending lots and lots of investors cash…but no idea how to make $. We all know where those fabulous web 1.0 companies ended up.
Re: Re: ...
I have yet to see any musician or record label that has found this Shangri-La of supposed profits “in the long run”. If this new business model was working so well wouldn’t record labels and artist be raking in the profits? Last time I checked less and less money is being made.
You need to get out more. We’ve pointed to many musicians who are doing quite well with this business model. You can ignore them, but it doesn’t mean they don’t exist.
Second, you’re wrong about “less and less money is being made.” Can you back that up? The reports we’ve shown is that more and more money is going into the music industry. It’s true that less and less money is being made in the *recording* industry — but that’s quite different than the music industry.
Re: Re: Re: ...
As an owner of a record label and a musician and I think I’m getting out there enough to be able to speak my mind on this topic…
but hey…you’ve converted me to the free model…so as I said in an earlier reply…
I’m just going to start taking this content that you create and just copy it and give it away to people…I’m sure you wont mind…being a champion of this “Business Model” and all…so thanks dude…i’m a big fan…thanks for the free stuff…
Here we go again
quote:
“a criminal who takes property belonging to someone else with the intention of keeping it or selling it
wordnet.princeton.edu/perl/webwn”
I see the taking, music is property under the current law, and I see the intention of keep it.
What part of the above doesn’t fit calling someone a thief or stealing? Thief and stealing are legitimate English language and are commonly understood. The Supremes are making a legal definition/distinction and StuCop is entitled to his English language usage. That is the purpose of a common language.
I would propose for the sake of cordiality, using infringment has less baggage attached to it but StuCop is well within his rights of description.
Re: Here we go again
If I take something from you that means that you, by definition, don’t have it anymore. Therefore, copying something (even illegally) is not “taking” it.
re: stu
i agree 100% with joe.
i am an artist and a musician.
i have done all the things you proposed joe do.
here’s what happened:
(don’t be too shocked now…)
it worked!
i have more fans and more shows and more openings than i did before i tried this.
all of those add up to more revenue for better equipment, more supplies, and more studio time.
that produces a larger body of work which in turn feeds the fans what they want: new material now.
and i get to enjoy doing it all without worries that people are “stealing” from me.
Re: re: stu
i agree 100% with joe.
i am an artist and a musician.
i have done all the things you proposed joe do.
here’s what happened:
(don’t be too shocked now…)
it worked!
i have more fans and more shows and more openings than i did before i tried this.
all of those add up to more revenue for better equipment, more supplies, and more studio time.
that produces a larger body of work which in turn feeds the fans what they want: new material now.
and i get to enjoy doing it all without worries that people are “stealing” from me.
——————-
Oh yeah…who are you?
Re: Re: re: stu
i’m a self-sustained, self-employed, non-starving artist/musician.
i do these full-time as my career, and i do quite well.
i think of it as a symbiate relationship between me and my fans.
we both get what we need and enjoy from each other.
if you can’t understand this simple concept, then i believe it hopeless that you ever will.
if you want to know my secret, here it is: quality.
Re: Re: Re: re: stu
again…oh yeah…who are you…c’mon…promote yourself…
Re: Re: Re: re: stu
also, as far as quality is concerned in music/art quality is not really a quantifiable property…quality in art is really determined on individual level…
beauty is in the eye of the beholder…
Re: Re: Re:2 re: stu
i view this forum as a place to discuss ideas.
i refuse to promote myself as an artist/musician here.
i will however share my experiences if i see a reason to do so.
don’t mistake what i said.
i do not equate beauty and quality.
this is my last response to you, as you have had nothing of worth to add to our discussion.
Re: Re: Re:3 re: stu
hah…
okay I’ll promote myself then…
http://www.myspace.com/skeandhu
is my record label
please feel free to listen to the music…but please don’t steal it…we’ve invested a lot of time and money in the label…and our artist have invested time and money as well…
but please feel free to purchase the music if you’d like…it’s great stuff and you’d be helping a small indie label and indie artist…
xoxoxoxox
Where is this rule engraved in stone
quote from Buzz:
“You cannot compare the stealing of materialistic things to the copying of information.”
That’s a rather big “thou shalt not” !
You can try to make this rule stick but good luck on it. This is the internet and we can argue about anything and everything.
Re: Where is this rule engraved in stone
TiredofLame, you misunderstood my statement just like you misunderstood just about everything Mike is talking about. My statement was not a “thou shalt not”. I was pointing out how misguided it is to state that piracy = stealing. If I jump into your car, hotwire it, and drive off, I am now +1 car while you are -1 car. I have taken something from you that only I can return. However, with digital content, an exact duplicate is made. The original is whole and untouched.
No one is supporting piracy here. Piracy is wrong. Piracy should be punished. We are not preaching that piracy is the way of the future. All we’re saying is that no matter how you slice it, piracy is not stealing; it is copyright infringement. That is unlawful, and we accept that. So, stop calling it stealing. 🙂
Happy for your success
Hi kossori hana.
Glad to hear this approach is working for you. My working theory is that your approach works at maximizing profits for a musician depending on factors like career stage (starting up versus established) and ability/desire to tour (some artists may be great in the studio and suck on stage). I would like these forum discussions to evolve over a period of time to flush out the relevant variables to find out what works best and when it works best. So I am extremely interested on your reports from the front lines.
I wonder if someone like Stevie Wonder would be lost to us if he was trying to break himself as an independent artist these days with its dependence on grueling touring?
Also if the toll from touring will limit the artist base up the road (I imagine that female performers would elect to not hit the road when starting/raising a family).
Re: Happy for your success
My working theory is that your approach works at maximizing profits for a musician depending on factors like career stage
—————–
1. This is just a theory…
2. are the only reports from the front lines that you consider the ones that support your theory?
that’s not very scientific.
Re: Happy for your success
I wonder if someone like Stevie Wonder would be lost to us if he was trying to break himself as an independent artist these days with its dependence on grueling touring?
That assumes (incorrectly) that touring is the only way to make money. It is one way, but certainly not the only way. We’ve listed out many other ways as well.
Re: Re: Happy for your success
Mike, with regards to the touring not being the only way to make money. this is correct – you CAN sit on your arse and watch the money fly in… if you are brian wilson or paul mccartney and have a back catalogue spanning a couple of decades.
touring is the only way for an independent act to make any kind of money, decent or not.
hell, my friends band are signed to a major label subsiduary, just back off the road from supporting bloc party for the past couple of months, and soon to head of to your side of the atlantic for a month or two to promote the new album – only now after the release of their 4th album are they making a “wage”.
they’ve toured constantly, for as long as i’ve known them scraping by on close to 200 quid a week each (off of sales), which is almost minumum wage in this country.
Re: Happy for your success
as a woman currently starting a family (2 months to go!), i take this time to create new works.
i can work on a commissioned piece or compose a new song whenever i get inspired to do so.
i plan on releasing my new works before the due date so my fans have something fresh before i take a long break.
i’m also sure this new beginning will be ripe with new concepts and ideas for me to explore upon my return.
the only lost opportunities will be the ones i don’t take.
Gloss over far too many details
Mike,
1. Buggy whip is still offensive to me- you are a good enuf writer to not rely on an inadequate, offensive cliche
2. The models will co-exist- how can you just gloss over the following:
a. I know you think that the sky will part and patent law and copyright law will be repealed but that is a relatively long shot
b. Some people just want the music as an end product (think of it as a premium) with no ads and no hassles. The bands that make that transaction easy and also utiltize the benefits of your described model will have the best of both worlds and will take more market share than the band that only uses one model
c. You conclude too early in the game that this is the end game for DRM (digital rights management) and it completely failed. That may or may not be the case 10 years from now.
d. As the RIAA fails, consumers are going to have a hard time generating the hatred for an independent band that they do for the current industry and there will be a pendulum swing the other way. They could easily feel a desire to contribute directly. Every action has another reaction
Re: Gloss over far too many details
I second that. As a buggy whip manufacturer*, I am highly offended by the comparison between buggy whips (a necessary item among a certain segment of the population (mostly the Amish)) and the outdated business model that is being pursued by the majority of the music industry.
*OK, not really.
Re: Gloss over far too many details
1. Buggy whip is still offensive to me- you are a good enuf writer to not rely on an inadequate, offensive cliche
Why is it offensive? I’m not being flip here. It’s a very good example of a business that became obsolete. If you explain why it’s offensive, I can point to other examples of obsolete business models instead.
2. The models will co-exist- how can you just gloss over the following:
If you have two companies, one of which sells a better product for less money, how long does the second company stay in business?
a. I know you think that the sky will part and patent law and copyright law will be repealed but that is a relatively long shot
No. That’s not what I think. If you could explain where I’ve said it, I’d appreciate it. I don’t think that at all. What I think is that companies and individuals will discover they’re better off ignoring copyright and patent law. That has nothing to do with repealing either.
b. Some people just want the music as an end product (think of it as a premium) with no ads and no hassles. The bands that make that transaction easy and also utiltize the benefits of your described model will have the best of both worlds and will take more market share than the band that only uses one model
There doesn’t need to be ads or hassles. Plenty of people can enjoy the music just fine… You still seem confused about the business model we’re proposing. It’s not about annoying users. As I said, I actually don’t think the advertising model is the best one… but it is one business model.
You are still too focused on the music as the end product. If everyone else recognizes it’s not the end product, but a component to make other things more valuable, you’ll have a lot of trouble still selling music.
You claim it’s the best of both worlds to sell the music, but you’re wrong. You miss out on all of the promotional benefits and the ability to grow your market if you keep the music locked up.
c. You conclude too early in the game that this is the end game for DRM (digital rights management) and it completely failed. That may or may not be the case 10 years from now.
No. It’s not too early in the game. We have plenty of history (especially if you include the software space) to understand that DRM fails. However, the more important factor is if you understand the economics, you recognize that DRM simply makes NO ECONOMIC SENSE. It destroys value, rather than enhancing it. You do not and cannot build larger markets by destroying value.
d. As the RIAA fails, consumers are going to have a hard time generating the hatred for an independent band that they do for the current industry and there will be a pendulum swing the other way. They could easily feel a desire to contribute directly. Every action has another reaction
I’m not sure what this has to do with anything. Nothing in what I’m saying has to do with “hatred.” It’s the opposite. It’s about creating transactions that make everyone happy.
All concerts are free
What’s the “give it away for free” crowd’s take on fans sneaking into a concert for free…
is that okay too?
or is that not okay…b/c now you feel someone is “stealing” from you…
c’mon you should just play free concerts for everyone right?
what if that’s the next “Business Model”
can you wrap your arms around that one…or is it only theft when it affects you personally?
Re: All concerts are free
Hey, it works for Ozzy.
Re: All concerts are free
okay, this is a new topic, so i’ll bite.
my personal response:
i don’t mind.
other musicians playing will have a guest list.
barkeeps have friends they let in.
venues have regulars who are exempt.
fairs and festivals don’t charge admission.
i don’t think of it as losing revenue.
i think of it as an opportunity to reach a new individual.
if it is an existing fan who snuck in, i’m not going to delve into his privacy and ask why he didn’t pay.
he wanted to see me badly enough to risk getting thrown out.
i just appreciate the devotion and move on.
i covered all the bases i can think of at the moment.
Re: Re: All concerts are free
no…i mean totally free for everyone…no one pays…there’s no getting thrown out…it’s just free…
concerts are free…cd’s are free…downloads are free…
so would it be an opportunity to reach a new individual who got into your concert for free to then give free music to via downloads…how are you making any money?
Re: Re: Re: All concerts are free
…and don’t you value your music enough to warrant charging for it?
Re: Re: Re:2 All concerts are free
…and don’t you value your music enough to warrant charging for it?
Stu, do you value the air you breathe? How come you don’t pay for it?
Value and price are quite separate.
Re: Re: Re:3 All concerts are free
you like that argument a little too much Mike…it doesn’t make sense…and is not applicable. No entity has invested capital to produce air…and if they did you bet your bottom dollar we’d be paying for it…
Re: Re: Re:4 All concerts are free
you like that argument a little too much Mike…it doesn’t make sense…and is not applicable. No entity has invested capital to produce air…and if they did you bet your bottom dollar we’d be paying for it…
Ah, but the entire point was to understand the difference between value and price.
Okay, how about TV shows. You didn’t pay to watch American Idol. Do you not value it?
Re: Re: Re:5 All concerts are free
no…i didn’t (but whoever watched it did) but that still doesn’t make your point…again someone paid for it to be on the air…the commercial sponsors…and i think that they’d be upset if i decided to strip out their commercials and re-broadcast it. And I think that Fox would be upset if I decided to take it and strip out the commercials…or just sell new ones and re-broadcast it.
anyway…why are we arguing value and price…
what’s your point?
Re: Re: Re:6 All concerts are f
no…i didn’t (but whoever watched it did) but that still doesn’t make your point…again someone paid for it to be on the air…the commercial sponsors..
Aha! Do you note realize that you just validated everything we’ve been saying. *SOMEONE* values it to create it. Why? Because they know there are OTHER BUSINESS MODELS that will make it worthwhile for them to pay for the creation. In this case, by creating a show like American Idol, they get to sell more stuff.
That’s all we’re saying for music. Someone will pay for the creation, because it will help them sell more of something else. Same thing as a TV show.
Then, the point we’re making is that music creators will increasingly realize they can make MORE by adopting this business model.
So, you really do understand the business model we’ve been pitching, even if you think you don’t.
anyway…why are we arguing value and price…
Because you said they were the same thing.
Re: Re: Re:7 All concerts a
I didn’t validate your point at all…if anything you validated mine…
it would be theft/copyright infringement/ whatever you want to call it if I copied Idol…stripped out the ads and re-broadcast it…or even just re-broadcast it…
if i took their content and removed the way they made profit from it that would be theft….
if i monetize my music by selling it and someone takes that profit from me by simply stealing it then that too is theft…
if you don’t want to buy my music…then don’t…but for gods sake don’t copy it and mass-distribute it for free…and then say you were doing me a favor…that’s insane…
you can’t force “business models” on people/companies whatever…especially if the model is take what they produce and give it away for free…
nothing is free…somewhere there is money being invested/spent/thrown down a well or whatever…
Re: Re: Re:8 All concer
it would be theft/copyright infringement/ whatever you want to call it if I copied Idol…stripped out the ads and re-broadcast it…or even just re-broadcast it…
Did I say it wouldn’t be copyright infringement? Don’t argue against what you think I said. Argue against what I said.
if i took their content and removed the way they made profit from it that would be theft….
Removing the way someone else profits is not theft. If I open up a pizza place next to your sandwich shop, and I offer better food for better deals and you go out of business, I have removed your way of profiting. That’s not theft. That’s competition. Learn the difference.
if you don’t want to buy my music…then don’t…but for gods sake don’t copy it and mass-distribute it for free…and then say you were doing me a favor…that’s insane…
Okay, Stu, how many times do I need to say this:
I NEVER SAID IT’S OK TO COPY AND MASS-DISTRIBUTE SOMEONE ELSE’S CONTENT FOR FREE.
Stop responding to what you *think* I said. I said that *from the producer’s standpoint* it makes sense to ignore those rules. Not the consumers.
you can’t force “business models” on people/companies whatever…especially if the model is take what they produce and give it away for free…
Ugh. Do you just not read what I write? I’m not forcing a business model. I’m saying that the old business model is disappearing and I’m highlighting a new one.
It’s as if you’re making buggy whips, and I am warning you that the automobile is coming and it’s going to change your ability to profit from buggy whips, and you just sit there saying that *I* can’t force this new business model on you. That’s right, I can’t. The market will, however, and you’ll be out of business.
nothing is free…somewhere there is money being invested/spent/thrown down a well or whatever…
Well, first, plenty of things are free. But, you’re right that money is always being spent related to that free good. That’s actually the key to my model. Why do you continue to insist I’m saying something I’m not.
I have never said give away everything free. I have said you need to learn what should be free and what should be charged for to *maximize* your ability to profit.
To take from that that I say people should infringe on copyrights and that everything should be free is just wrong.
Re: Re: Re:5 All concerts are free
I do not value it, which is why I did not watch it. 🙂
Re: Re: Re:3 All concerts are free
i believe air isn’t classed as a commodity
Re: Re: Re: All concerts are free
i play all the local festivals for free, and my cds are free.
(i don’t have downloads.)
i doubt i could convince a venue to not charge a cover.
i have worked for free before, almost all musicians have.
it’s not always about the money.
right now, this is part of my career.
i like that idea though.
maybe i will do it completely free later in life.
i chose these paths because i enjoy these things.
i didn’t expect to make these my career.
that’s just how events eventually played out.
Re: All concerts are free
What’s the “give it away for free” crowd’s take on fans sneaking into a concert for free…
is that okay too?
or is that not okay…b/c now you feel someone is “stealing” from you…
Stu, please understand the difference between scarce and infinite goods. Space at a concert is scarce.
You added to the dictionary
quote from Charles Griswold
“If I take something from you that means that you, by definition, don’t have it anymore. Therefore, copying something (even illegally) is not “taking” it.”
Charles you have added the “don’t have is anymore” to the dictionary definition. While that may be a valid point in an argument about loss it is not valid in discussing what the commonly accepted definition is. That is why we have language. You may be correct in your argument but you can’t just unilaterally redefine the meaning of a common word out of the blue. There can be no constuctive discourse if I and you do that. I looked up “take” in the dictionary and it means to gain possession of (once again you incorrectly add that means someone else loses possession of). Read the dictionary- then argue using the accepted language.
Re: You added to the dictionary
Either you’re not posting the entire definition or the definition is incomplete. Merely gaining possession of something does not mean that you have taken it. You might (for instance) have made it yourself.
I hope your right
I, for one, hop Mike is right. I hope all goods for which the marginal cost of duplication and distribution is zero are free. I’ll get my music for free, my DVDs for free, my software for free, basically anything digital will be free. And it will be really free to me. I’m a 38 year old father of 2. I don’t go to concerts any more. I have no use for your stupid looking t-shirts. You can make money selling your tunes to BMW for inclusion in their next ad, but I skip ads with my DVR. The music is the end product to me, so I’m happy if you subsidize my enjoyment.
Re: I hope your right
I, for one, hop Mike is right. I hope all goods for which the marginal cost of duplication and distribution is zero are free. I’ll get my music for free, my DVDs for free, my software for free, basically anything digital will be free. And it will be really free to me. I’m a 38 year old father of 2. I don’t go to concerts any more. I have no use for your stupid looking t-shirts.
And what’s wrong with that? Nothing.
I’ve been reading up about the history of the lighbulb recently (fascinating stuff, actually). And you realize how many people got the “free” benefit of the lightbulb, that allowed so many new businesses to exist.
Imagine if Thomas Edison had demanded that anyone who benefits from the lightbulb had to pay him money?
headache
I have a headache now…but it was a fun discussion
please buy some music from Skean Dhu Recordings…
http://www.myspace.com/skeandhu
techdirt…thanks for the free ad space…
xoxoxoxo
Price is only one part of equation
Mike quote:
“If you have two companies, one of which sells a better product for less money, how long does the second company stay in business?”
Mike, the above is nonsense and defies all logic. We have already determined that music is not a commodity. Many times (but not every time) better music costs more money to make. If you spend more to make it than the next band and in all your monetization policies net less than the next band than you will get a lower return on your band business investment.
Ever heard of that the customer gets to pick between price, quality, and service levels (things like rush delivery,etc). You get all three at once only rarely (extremely rarely). Usually you get to pick two of the above.
You cannot just argue price alone. Purchase decisions include the above matrix and many other brand/ feel good factors like “is this product green” or “was child labor used in this garment”.
All the time people select and pay for a product or music based on a myriad of factors which you conveniently deny because they seem like “irrational” behavior to you. But I can guarantee you that these factors can be huge in purchasing behavior and there are countless examples of businesses that command a higher price by managing those factors well- Starbucks comes to mind. By your price/quality alone theory Starbucks should have gone out of business but instead they continue to expand. How could that be?
Re: Price is only one part of equation
Many times (but not every time) better music costs more money to make. If you spend more to make it than the next band and in all your monetization policies net less than the next band than you will get a lower return on your band business investment.
Again you make the false assumption (why do you keep doing this???) that somehow with my business model you make less.
You cannot just argue price alone. Purchase decisions include the above matrix and many other brand/ feel good factors like “is this product green” or “was child labor used in this garment”.
Indeed. But, if the discrepancy is huge, your business model will suffer tremendously. And when people know that every other band is giving their music away, the *mental transaction costs* of having to pay for your music will make it just not worthwhile — no matter what the quality.
All the time people select and pay for a product or music based on a myriad of factors which you conveniently deny because they seem like “irrational” behavior to you. But I can guarantee you that these factors can be huge in purchasing behavior and there are countless examples of businesses that command a higher price by managing those factors well- Starbucks comes to mind. By your price/quality alone theory Starbucks should have gone out of business but instead they continue to expand. How could that be?
Again, you seem to totally misunderstand what I’ve said. It doesn’t seem like irrational behavior at all. People make all sorts of decisions based on overall utility, not just price. I said exactly that just a few days ago.
However, what I’m saying is that you still need to recognize that the market sets the price — and if they see everyone else giving the music away for free, your model isn’t sustainable unless you add a lot more value — and that value isn’t just the music alone.
Free Ad..
why’d you take my free ad down mike? free is good right?
Re: Free Ad..
…it’s just my business model to use your site for free advertising…get with the times man and drop that buggy whip…free is good
http://www.myspace.com/skeandhu
Re: Free Ad..
why’d you take my free ad down mike? free is good right?
I didn’t take your ad down. I’m not sure what you’re talking about. I haven’t removed any of your comments, if that’s what you’re saying.
But, no, “free is good” is not the argument. To take what we’ve said and boil it down to “free is good” is wrong. The point is recognizing what should be free and what should be charged for. That’s not “free is good” that’s just about recognizing basic economics.
Free Ad...
or does that only apply when it’s not your pocket that the “free” is coming out of?
You have not proven this
Mike quote:
“Again you make the false assumption (why do you keep doing this???) that somehow with my business model you make less.”
Mike, I have read your series and you have hypothesized this but it has not undergone any intellectual rigor. I doubt that any economics professor if you turned this in would say that you have proven you make more under your model.
If every band were to adopt your model then the pie would have to get larger to prove out your theory. I would contend that there are other limitations to your concert monetized plan. Things like, the time, the expense, the hearing loss issue. You might get a slight larger pie from someone playing slightly less video games but the overall effect would be minimal.
Secondly, by my (and I would hazard a guess some other musicians here would agree) back of the envelope calculations the profit from all the non direct sales you have mentioned is less than the profit from direct sales. See, musicians who have been in the industry don’t mistake the gross amounts the concert tickets bring as pure income. Really drill down and you will find the promoter gets his take (for insuring the deal). A hall or club is not going to rent to a batch of ragtag musicians traveling thru in a van. By the time you pay gas, vehicle, breakage of instruments, repairs, health insurance, interest on loans, theft of the tshirts stack, traveling stress, etc. People here have tried to alert you that your analysis is flawed regarding what indie musicians net from touring and you are so headstrong you ignore them. Not a good habit for an analyst.
Finally, businesses ultimately go out of business from cash flow issues. Even in your best case description of successful monetization by your model, an independent band will mightily struggle because many of the payoffs are heavily at the back end (months and years down the road). Just a small example, tshirts- you pay for a big batch of them up front (at the time of the order being placed). By the time you have sold the batch close to out you have an inventory carrying charge.
Re: You have not proven this
amen TiredOfLame…hypothesizing and theories don’t make a point without proof…
even techdirt who claims to make money by giving away content doesn’t…they charge a lot for what they do with their Corporate Intelligence product…which is odd in a way in that they basically link to other people’s content and write a paragraph of snarky commentary about how whoever wrote the article is entirely wrong…
so maybe techdirt should start giving away everything they do for free…that would be putting your money where your mouth is…
everything is free…hooray…
mike encouraged me to repost his content for free earlier…but i didn’t find where his money was coming from…ie the Corporate Intelligence product…so now i put the use of that on the web for free…why not…that’s the way to go…free Corporate Intelligence software for everyone…c’mon Mike…that’d be super cool…give that away for free and you’ve won me over…
Re: Re: You have not proven this
amen TiredOfLame…hypothesizing and theories don’t make a point without proof…
I’ve pointed out plenty of research that backs up the points I’ve made.
even techdirt who claims to make money by giving away content doesn’t…they charge a lot for what they do with their Corporate Intelligence product…which is odd in a way in that they basically link to other people’s content and write a paragraph of snarky commentary about how whoever wrote the article is entirely wrong…
Stu, you really should take the time to understand what we do before you make claims that show your ignorance. We give away a ton of content right here, which gets people to come see what we have to say, and we make money by connecting companies to experts who can provide them valuable analysis that they couldn’t get otherwise.
so maybe techdirt should start giving away everything they do for free…that would be putting your money where your mouth is…everything is free…hooray…
Stu, I said this above, so I’m not sure why I need to repeat it. I have NEVER said that “everything is free.” I have simply said that you recognize what should be free and what should be charged for in order to maximize your profits. Your insistence on pretending I’ve said something I haven’t doesn’t help you prove your point.
mike encouraged me to repost his content for free earlier…but i didn’t find where his money was coming from…ie the Corporate Intelligence product..
Stu, you seem really confused. I never said that everything needs to be free. I never said that whatever you do to make money should be free. I said to simply recognize the economics, and you’d know what things it makes sense to charge for and what it makes sense to use for promotion. You can pretend I said something else all you want. It doesn’t, however, add much to your argument. It just makes you look stubborn and unwilling to admit you were wrong.
Re: Re: Re: You have not proven this
Stu, you seem really confused. I never said that everything needs to be free. I never said that whatever you do to make money should be free. I said to simply recognize the economics, and you’d know what things it makes sense to charge for and what it makes sense to use for promotion. You can pretend I said something else all you want. It doesn’t, however, add much to your argument. It just makes you look stubborn and unwilling to admit you were wrong.
———
I produce music…that’s my product…I can’t simply not charge for it. If that’s stubborn then you’re stubborn too by arguing that I should not charge money for it…that I should give it away for free.
to loop back to the topic of this blog “the give it away for free label” . I bet you it wont work…I’m sure they’ve got their investors and that a lot of money has already been spent for the “Free” content…and I bet that most of those investors will not see a penny profit.
and my point is there is no “Free” music. Somewhere someone has paid for that music…the musicians have…the labels have. It’s not free. It’s an investment that somehow you hope to recoup and make some profit on…at least enough to EAT..right…some food and shelter…that’d be nice….some money to gas up the van if you’re touring and to buy some strings…upgrade an amp…you know…just a little bread to keep things going.
Re: Re: Re:2 You have not proven this
Stu, I’m giving up:
and my point is there is no “Free” music. Somewhere someone has paid for that music…the musicians have…the labels have. It’s not free.
I have said it OVER and OVER and OVER again, that giving away the music for free DOES NOT MEAN that no one gets paid. You just charge for the complementary scarce goods and you can make much more money. So, yes, you get paid. Everyone gets paid. STOP insisting that I’m saying you don’t get paid.
Seriously. It’s not worth responding to you if you can’t grasp this one simple concept.
Re: You have not proven this
Mike, I have read your series and you have hypothesized this but it has not undergone any intellectual rigor. I doubt that any economics professor if you turned this in would say that you have proven you make more under your model.
To say that you’ve read it when you keep making statements that show you haven’t doesn’t make sense to me.
Anyway, despite your claims, there are plenty of economic studies that support this with actual data… If you want to do some research take a look at the work of David Levine and Michele Boldrin. Then Eric Schiff’s research. Next up: Lerner and Jaffee. And Samson Vermont. Then look at the research by Michael Heller and Rebecca Eisenberg. Then look at the research by Petra Moser. Then the research by Mariko Sakakibara and Lee Branstetter. Then there’s the research of Robert Hunt. And Fritz Machlup. There are a lot more as well…
But you’ll start to notice a pattern. And as you read the research each of them brings up, it will point you to more and more research with data to back it up.
And, to prove that you still haven’t understood what I wrote, you go back to insisting the model I’ve described is solely about concerts. Concerts are only one component — and not even a necessary one.
Re: Re: You have not proven this
you’re the pony-tailed know-it-all guy from the bar scene in Good Will Hunting aren’t you?
Will: Do you like apples?
Clark: Yeah.
Will: Well, I got her number. How do you like them apples?
Re: Re: Re: You have not proven this
Stu: There’s no data.
Mike: Here’s the data.
Stu: *phbbbbbt* Now I’ll call you names.
That’s a convincing argument there, Stu.
Don’t tell me there’s no data, then mock me when I provide the data. Either admit you were wrong or show me how all those studies are wrong.
Re: Re: Re:2 You have not proven this
I’m not calling names…and I’m sorry if you took it that way. I’m just saying that theory and hypothesis don’t equate to real world applications. I’m sure they’re are a few examples of labels and musicians that have made money buy giving away their songs for free. But I’ll guarantee the somewhere in the line there was some money to pay for that “Free”…whether it be investors or reletives or something. There’s a lot of struggling musicians and record labels out there that aren’t making it and a lot of that is due to piracy. In fact the vast vast vast majority of musicians and labels aren’t making it.
Musicians deserved to be paid for their work…whether that’s on a CD or a live concert. Labels deserve to make money too for being business partners…especially the indie labels.
I’d love for you to prove that your theories work…I asked you offline if you’d be interested…let me know.
Re: Re: Re:3 You have not proven this
But I’ll guarantee the somewhere in the line there was some money to pay for that “Free”..
Stu, I’m getting repetitive here: Why do you insist on saying that we said there’s no money to pay for the free.
OF COURSE there is money! That’s the whole point. We’re just saying that the money comes from somewhere else.
There’s a lot of struggling musicians and record labels out there that aren’t making it and a lot of that is due to piracy. In fact the vast vast vast majority of musicians and labels aren’t making it.
No. It’s not due to piracy. That’s like the newspapers blaming Craigslist for their inability to adopt. If musicians are struggling it’s because (a) they suck or (b) they haven’t figured out how to properly market something they can sell. That’s all.
Musicians deserved to be paid for their work…whether that’s on a CD or a live concert. Labels deserve to make money too for being business partners…especially the indie labels.
No one ever denied this. I’m not sure why you keep ignoring the main point: this is about creating business models that allow for more profit.
To add to my post 81 above
To state my bias- I am an older gray haired musician who has promoted and moved 300,000 CDs in the last 4 years. I am no stranger to giving after free stuff- have given out 20,000 CDs for free to help obtain those direct sales.
Believe me that I avidly welcome and pursue worthy ideas that will help me make more profit (including your theories). However, I have to invest my money in things that have a plausible chance of success. So don’t mistake my crustiness for lack of interest in your theories.
I have played zero live performances thru this period of moving product.
Also the thought occurs to me that I have considerable hiring experience and for the life of me I cannot think of 5 musicians working as a group that can cover the range of tasks and capabilities needed to pull off your plan. In addition to being a world class musician you have to cover within the group (or pay outsiders at considerable expense) a range of tasks that is almost Herculean in range and depth. Needed is considerable experience in (only a partial list) 1. merchandise marketing (degree and experience preferred) 2. superb musicianship 3. superb logistics/mapping/inventory control systems/ computer experience and don’t forget you have to take out and remit local sales taxes- so accounting background or degree desirable. Oh and by the way, many cities have traveling entertainer taxes you are required to pay and they will get you 4. superb PR specialist within the group/ spokesperson to local media/ track upcoming gigs and preship PR kits advance 5. a couple of really strong backs in the group to schlepp in and setup and breakdown and pack. 6. a stong social connector MYSpace /facebook networking online specialist
OK I am wearing myself out- even before I get 1/3 of the way into the list of requirements for the tasks involved. No wonder there are precious few success stories for this model. So once again, even a model that works on paper can quickly fall flat when you go to source out fellow bandmembers or hired gun bandmembers.
Re: To add to my post 81 above
To state my bias- I am an older gray haired musician who has promoted and moved 300,000 CDs in the last 4 years. I am no stranger to giving after free stuff- have given out 20,000 CDs for free to help obtain those direct sales.
That’s great, but imagine if you could give away more stuff at less cost that would generate more sales? Wouldn’t that be a plan that makes a lot of sense?
Also the thought occurs to me that I have considerable hiring experience and for the life of me I cannot think of 5 musicians working as a group that can cover the range of tasks and capabilities needed to pull off your plan.
Who said the musicians have to do it alone? This is exactly the role that a record label should be providing for musicians. It’s the *failure* of record labels to do this today that’s the problem.
Will these people provide a reference for you?
Mike quote:
“Anyway, despite your claims, there are plenty of economic studies that support this with actual data… If you want to do some research take a look at the work of David Levine and Michele Boldrin. Then Eric Schiff’s research. Next up: Lerner and Jaffee. And Samson Vermont. Then look at the research by Michael Heller and Rebecca Eisenberg. Then look at the research by Petra Moser. Then the research by Mariko Sakakibara and Lee Branstetter. Then there’s the research of Robert Hunt. And Fritz Machlup. There are a lot more as well…”
Mike, nice name dropping but will these people vouch for your theory? It seems a very wide stretch to cite these sources for what we are arguing about. You’re telling me that there is no practical application considerations to “blue sky” type economics (which is an important dicipline) that you cite here. Sorry, I am skeptical.
Armies and bands and plans work because of theory and good execution. Mike, you know from trying to get venture capital that a venture capitalist will almost always take a mediocre business plan that has a great executive team lined up over a brilliant plan with no cred on the execution side.
In another post above I have given some serious consideration to the practical execution side and you can choose to ignore it or you can do some of the work to combine theory with application.
Re: Will these people provide a reference for you?
Here’s Mikes unified Economics of Free post
http://www.techdirt.com/articles/20070503/012939.shtml
I think you’ll find it interesting and look forward to your take on it.
My take is that Mike has it wrong in regards to music being the free non-scarce product…
I think the music IS the product. And I think what’s devalued music is the glut of pirated music out there or the glut of bands/musicians giving away their music for free…
he’s got things reversed…usually live concerts are a means to sell the CD’s and other merchandise not the other way around…
musicians are struggling, especially the indie ones, and i think the majority of them would agree that the give it away for free model is doing more harm than good…
Re: Re: Will these people provide a reference for
My take is that Mike has it wrong in regards to music being the free non-scarce product…
Er. That’s not an opinion, it’s fact. Music is non-scarce. You can’t argue that, because it’s factual. A song, once produced, can be recreated at zero marginal cost.
I think the music IS the product. And I think what’s devalued music is the glut of pirated music out there or the glut of bands/musicians giving away their music for free…
You think that, but you’re wrong. The data shows that you’re wrong. In fact, I find this comment to be the most hilarious of all, because you’re basically admitting that many bands are starting to move towards this business model, and then whining that’s why you can’t make any money the old way. In other words: exactly what I said (and what TiredofLame insists isn’t true). That if you don’t adopt this as other bands do, you’ll be in trouble.
he’s got things reversed…usually live concerts are a means to sell the CD’s and other merchandise not the other way around…
Yes, they used to be. But it simply doesn’t make economic sense to keep doing it that way.
musicians are struggling, especially the indie ones, and i think the majority of them would agree that the give it away for free model is doing more harm than good…
Well, there’s a broad statement. Actually, many indie musicians are doing quite well — but mainly they’re the ones who are adopting the *complete* business model, not just the giving away for free part. As I’ve said from the beginning (and which you still stubbornly refuse to acknowledge) the business model isn’t just about giving away stuff for free, but recognizing what’s free and what you charge for.
You’re blaming the wrong thing for what causes musicians to struggle, and in doing so, you’re only going to make life worse for yourself and your musicians.
Re: Re: Re: Will these people provide a reference
Er. That’s not an opinion, it’s fact. Music is non-scarce. You can’t argue that, because it’s factual. A song, once produced, can be recreated at zero marginal cost.
———–
it’s not a zero marginal cost…it’s cost is being paid for by the artist and the label in lost profits…
there’s no such thing a zero cost…there’s no such thing as FREE…it’s costing someone…
and as far as the many indie bands that are doing well…what’s the % doing well v. struggling…and those that you claim are doing well…I bet anything they have $ behind them from someone somewhere…
you paint this picture of and indie music shangri-la where those that are giving away their music for free are being lavished with cash and success…but that’s not the case…again the vast, vast, vast majority of indie musicians are struggling…and if you told them the answer to their woes is to give their music away for free they’d laugh in your face…
and again I bet those success stories are backed with someones cash…
Re: Re: Re:2 Will these people provide a refere
it’s not a zero marginal cost…it’s cost is being paid for by the artist and the label in lost profits…
You don’t understand marginal cost. You are talking about opportunity costs, not marginal costs.
there’s no such thing a zero cost…there’s no such thing as FREE…it’s costing someone…
You seem confused about what free means as well.
you paint this picture of and indie music shangri-la where those that are giving away their music for free are being lavished with cash and success…
No, only if they adopt the entire business model, which means knowing what to charge for.
if you told them the answer to their woes is to give their music away for free they’d laugh in your face…
But I wouldn’t tell them that. I’d tell them to give away their music IN COMBINATION with charging for a variety of things (what they charge for may depend on the musicians in question).
I’m not sure why you can’t understand this and keep focusing only on one half of the equation. My guess is you don’t want to understand this so you’re purposely blocking out the other half of the equation.
Re: Will these people provide a reference for you?
TiredofLame: There’s no data!
Mike: Here’s the data!
TiredofLame: That’s name dropping.
Ok. I give up.
You don’t have to adopt the business model. Never said you did. But, you’re going to find it tough to stay in business if you don’t. If you don’t want to bother to understand this business model, that’s your decision.
And How will this happen?
Mike quote:
“What I think is that companies and individuals will discover they’re better off ignoring copyright and patent law.”
No Mike- some companies will discover that this makes sense and some companies will make controlled experiments and find out that it is not true for their particular circumstance.
Your job as a analyst is to tease out the nuances and variables that can reliably predict outcomes of success or failure. That is called wisdom and you are on the path but not there yet.
Your source of money trying to peddle a universal theory will dry up very quickly. You need more than just that to have ongoing success. The big consulting firms routinely blow up their theories and reformulate. You will not stay competitive based on the above.
Again, ignore the advice at your own peril. I have the battle scars from my own learning curve. When I guess wrong in business it can get nasty (for me) very fast.
Maybe now the learning begins
Mike quote:
“Ok. I give up.
You don’t have to adopt the business model. Never said you did. But, you’re going to find it tough to stay in business if you don’t. If you don’t want to bother to understand this business model, that’s your decision.”
I have survived in business (6 different companies) since 1976. I appreciate your concern and am trying to reciprocate.
Mike- I have noticed that you don’t respond to the key argument points. In the post you responded to above was geared clearly towards the difference between theory and application. Have you gotten venture capital funding yet? I told you the true scoop about what I and others look for in investments. Once again, you can’t clear waivers on this until you do the hard application side learning or you will be called out when you face the hard questions.
Re: Maybe now the learning begins
I have noticed that you don’t respond to the key argument points. In the post you responded to above was geared clearly towards the difference between theory and application. Have you gotten venture capital funding yet? I told you the true scoop about what I and others look for in investments. Once again, you can’t clear waivers on this until you do the hard application side learning or you will be called out when you face the hard questions.
I’m not sure what you’re referring to here.
Mike’s quote:
“No. It’s not too early in the game. We have plenty of history (especially if you include the software space) to understand that DRM fails. However, the more important factor is if you understand the economics, you recognize that DRM simply makes NO ECONOMIC SENSE. It destroys value, rather than enhancing it. You do not and cannot build larger markets by destroying value.”
I don’t even know where to start with this. I postulated that 10 years out DRM might look like a different equation to us than it does now. I don’t know how you can make these above assertions. The game is not over, it has just barely begun. You are telling me that with all the ingenuity and inventiveness and greed involved in this equation that someone won’t invent a DRM system that is convenient, harmless and works? I mean, 10 years is a long time- look at where the internet was a decade ago.
Also, I have personal experience with some DRM systems that are tolerable for medium size music software companies that allow a reasonable balance between user rights and the companies ability to fund the next upgrade. Most of the high end music sampler systems protect their samples that way. These are niche products that have no abilty to grow a larger market share. The problem with your analysis is the assumption that all markets can be signifigantly enlarged. Niche markets of all software (which in aggregate can be a noticable blip on the GDP) may be fully expanded to their market already.
Re: Re:
You are telling me that with all the ingenuity and inventiveness and greed involved in this equation that someone won’t invent a DRM system that is convenient, harmless and works? I mean, 10 years is a long time- look at where the internet was a decade ago.
You seem to be misunderstanding the point. DRM cannot add value. A business model designed around taking away value shrinks a market and simply opens up opportunities for competitors to offer something better. It’s not about whether or not DRM works (and I disagree that it will ever work, but that’s totally separate), it’s about the fact that DRM does the opposite of what any business does. It limits your market by taking away value.
That’s not smart. It’s bad for business.
The problem with your analysis is the assumption that all markets can be signifigantly enlarged.
If you’re in a market that you think can’t be enlarged, you’re about to be overrun by a competitor who enlarges it for you. It’s that simple.
Just say it without an analogy
1. Buggy whip is still offensive to me- you are a good enuf writer to not rely on an inadequate, offensive cliche
Mike reponse:
“Why is it offensive? I’m not being flip here. It’s a very good example of a business that became obsolete. If you explain why it’s offensive, I can point to other examples of obsolete business models instead.”
Firstly, the music and movie businesses are evolving. You cannot view the current state of affairs and conclude that action and change are not happening. There is a current “frothiness” in this overall business space and deals are getting done. The buggy whip industry analogy does a huge dis-service to this changing environment. Score= offensive
Secondly, I know you are trying to sell to this industry. Why you would be so dismissive of it? Also you indicate you are trying to change independent musicians thinking/planning also. Then you must think through who your market is and not insult them. Score= offensive
Thirdly, All analogies are partially flawed but this one is majorly flawed. A closer analogy would be the railroad industry that got knocked off its perch by cars, then trucks, then planes in quick succession. The railroad industry struggled for a while then figured out finally the concept of “intermodal transportation” where they handle the logistics of a truck top container from a truck in China, to a huge boat, to a train to somewhere in the midwest and back to a truck for delivery to a store. The container stays packed the whole time. Now railroads are thriving again. Music/movies like the railroads will go through a series of quick assaults from different things but there is never a question that music and movies will survive and have an ongoing part in our culture and have a range of practicioners and businesses from small to large. Hardly comparable to a small buggy whip industry that the need went away. As an analyst and a leader you need to get your signals straight or you look like a rookie. Score= offensive
Finally, rather than create arguments about analogies that are only partial hints at the truth- just say what you mean in your own words and don’t rely on the cliche.
Re: Just say it without an analogy
Firstly, the music and movie businesses are evolving. You cannot view the current state of affairs and conclude that action and change are not happening. There is a current “frothiness” in this overall business space and deals are getting done. The buggy whip industry analogy does a huge dis-service to this changing environment. Score= offensive
Again, I think you’re reading too much into this. It’s a valid analogy since we’re talking about business models that are obsolete. The fact that the market is changing isn’t the point. The buggy whip makers could have (and should have) changed with the times. They chose not to, and went out of business. Actually, if you look at the history books, you learn that there is one smart entrepreneur who made the leap — but he was one of only a very small group… and he went on to create one of the largest automobile companies ever.
I’m not saying you can’t evolve. I’m saying you have to. You’re saying you want to keep the old business model, even as you admit to the frothiness.
Secondly, I know you are trying to sell to this industry. Why you would be so dismissive of it? Also you indicate you are trying to change independent musicians thinking/planning also. Then you must think through who your market is and not insult them. Score= offensive
You’re confused. I’m not at all “dismissive” of the industry. I’m dismissive of the business model.
Also, I’m actually offended that you think I’m somehow offending independent musicians. Not at all. I’m trying to help them. How is that possibly offensive?
I think you’re taking offense at someone pointing you down a better path and I don’t understand how you could find that offensive.
Thirdly, All analogies are partially flawed but this one is majorly flawed. A closer analogy would be the railroad industry that got knocked off its perch by cars, then trucks, then planes in quick succession.
I’ve used a variety of analogies to explain this, including the railroad business. Each time I do, someone like you pops up to complain.
Finally, rather than create arguments about analogies that are only partial hints at the truth- just say what you mean in your own words and don’t rely on the cliche.
I have. Yet, when I do, folks like you complain and show that they haven’t understood. So I try to explain it in another way, using an analogy. Now you’re complaining that you don’t understand that either. I’m not sure how many ways you need me to explain it.
Giving Away Content for Profit
There are those who believe that you can’t make profit by giving stuff away for free. Here are quotes from some who believe otherwise:
— Cory Doctorow in the Forbes artcle “Giving It Away“
— Eric Flint, First Librarian of the Baen Free Library
— Harvey Danger
Please visit the websites that I’ve linked to and enjoy the free content.
Some people cannot read.
Man, that was a lot of comments to read through. Stucop and TiredofLame, it’s painful to see how many points you miss when someone explains something to you. Someone offers you an apple, and all you can think to do is question why he has an orange in the other hand. JUST TAKE THE DANG APPLE!
Re: Some people cannot read.
Man, that was a lot of comments to read through. Stucop and TiredofLame, it’s painful to see how many points you miss when someone explains something to you. Someone offers you an apple, and all you can think to do is question why he has an orange in the other hand. JUST TAKE THE DANG APPLE!
—————————
Buzz…Mike is not offering an apple at all…Mike is saying that we should abandon our core product and a revenue stream simply because dishonest people have figured out how to steal it and duplicate it.
His notion is that b/c our music can be stolen we should just give it away and hope to make money on concerts and other merch sales.
I’m sorry…but I want to be able to make money of my music sales, My concerts and My other merch sales…I don’t want to have to give up my music sales just because it can be stolen and duplicated.
Mike’s plan is not a plan at all…it’s an abandonment of a product with hopes to make up the lost revenue elsewhere…
sorry that doesn’t work…and it’s not very smart business…
Regardless whether the goods are scarce or non-scarce, digital or non-digital, seemingly identical products may be priced differently – while pricing is a factor of their cost, it is also driven by the perception of value of the products by the consumers – which is more a marketing issue than economics.
For instance, organic banana and regular banana will be priced differently – this is a fact. It’s going to be same with music or any other digital goods.
Mike’s contention that all music should be free (because of the non-scarce goods theory) can’t be applied across the board because of the point above – I am sure he is going to react against this statement but in the long run, I am convinced that quality commands premium pricing – it’s been proven time and time again.
There are people who will run to a free Roxanne song by a nobody but there will be a segment who is willing to pay for the original Roxanne song by the Police, which begs these questions (a) how large is the segment that’s willing to pay? Answer: we don’t know until we have more data/statistics; and (b) if the Police decides to not charge for their songs, would it increase their overall revenue from merchandise, concert etc? Mike will definitely say yes. But I would argue that until we have the data and statistics to prove it specifically in the case of the Police, we can’t have a definite answer.
For musicians out there, I suggest you ask yourself objectively whether (a) you are a premium quality musician, and (b) you have a high demand for your songs. If the answers to both questions are negative, then consider the free online distribution of your music as part of a promotional tool, which hopefully will pay out in the future. As you become well-known and have generated higher demand/interest, you should be able to charge for your musics – online or otherwise. This is the same case in the real world – some musicians play for free on the streets until they get a break. Nothing new about this…
Peace!
Re: Re:
Regardless whether the goods are scarce or non-scarce, digital or non-digital, seemingly identical products may be priced differently – while pricing is a factor of their cost, it is also driven by the perception of value of the products by the consumers – which is more a marketing issue than economics.
Actually, it is an economics issue. Certainly perceived value plays into the economics, but I think you’re confused again.
The question is why would you possibly want to charge for music when it shrinks your market?
Mike’s contention that all music should be free (because of the non-scarce goods theory) can’t be applied across the board because of the point above – I am sure he is going to react against this statement but in the long run, I am convinced that quality commands premium pricing – it’s been proven time and time again.
You are confused about what qualifies as “premium.” The horse carriage offered a premium experience to the automobile (less noise, more comfortable, etc.).
Sure, some musicians will be able to get people to pay for their music. The point is that they will make less money doing so.
Mike will definitely say yes. But I would argue that until we have the data and statistics to prove it specifically in the case of the Police, we can’t have a definite answer.
There’s a ton of data showing how freeing the infinite components increases the market for complementary products. I can’t find a single piece of data that supports the opposite conclusion.
For musicians out there, I suggest you ask yourself objectively whether (a) you are a premium quality musician, and (b) you have a high demand for your songs. If the answers to both questions are negative, then consider the free online distribution of your music as part of a promotional tool, which hopefully will pay out in the future. As you become well-known and have generated higher demand/interest, you should be able to charge for your musics – online or otherwise. This is the same case in the real world – some musicians play for free on the streets until they get a break. Nothing new about this…
That’s a really dangerous recommendation. You’re recommending that the more popular you are, the less well you treat your fans. That’s not a strategy for success. It’s one for failure.
Re: Re: Re:
You’re recommending that the more popular you are, the less well you treat your fans
—–
It depends how you treat them right? You don’t suddenly tell them that they can’t get all songs without paying. For instance, you continue to allow free download of old songs but you start to charge small amounts for newer and better quality (for instance better compression) songs.
——-
There’s a ton of data showing how freeing the infinite components increases the market for complementary products
————-
Yeah the market for complementary products may increase. But I am more interested in the impact on TOTAL revenue. Does the increase in complementary revenue offset the decrease in the core revenue?
One additional example
Concerts: if we follow Mike’s point about free distribution cost equals free access, then concerts should be free as playing a concert to an audience of 1 is the same as playing a concert of an audience of 100 – the distribution cost to the additional 99 is close to zero. But this is not the case. Of course, in case of outdoor concert, one could sit outside the stadium and listen for free. But this again highlights my point that quality matters, and there are people who are willing to pay to get better quality of music. If Mike’s contention is true, then most would sit outside the stadium.
Re: One additional example
Concerts: if we follow Mike’s point about free distribution cost equals free access, then concerts should be free as playing a concert to an audience of 1 is the same as playing a concert of an audience of 100 – the distribution cost to the additional 99 is close to zero
No, you are confused here — and I’m surprised because I’ve discussed this in great deal both above and earlier. Seats at a concert are scarce, not infinite. You are confusing what’s scarce and what’s infinite.
Re: Re: One additional example
Ok. Concert was a confusing example. My point was that if the market was considering whether or not to pay for goods based on the distribution cost, then most people would prefer to stand outside an outdoor stadium and listen for free because they figure that it doesn’t cost any more to the musicians if they listen for free.
Re: Re: One additional example
Ok. Concert was a confusing example. My point was that if the market was considering whether or not to pay for goods based on the distribution cost, then most people would prefer to stand outside an outdoor stadium and listen for free because they figure that it doesn’t cost any more to the musicians if they listen for free.
Giving it away for free
Mike…really I think your whole Business Model for the music industry is –
———–
Hey…dishonest people have figured out how to steal your product…so too bad for you now you’ll have to change your business and give your product away for free and charge for the stuff they haven’t figured out how to steal yet…
———
That is so, so wrong Mike. My argument is that just because people have figured out how to steal your product you don’t just give up and start giving it away. You make your product harder to steal. You’re saying just because something is easy to take and reproduce it should be free. Should all software be free? Should everything that dwells in the digital domain of 0’s and 1’s be free? I don’t think so and I don’t think just because someone has figured out how to pirate a product that manufacturers should just give up.
you’re saying the manufacturer is responsible for making a product that can’t be pirated and that once someone figures out how to steal it then it’s the manufacturers fault and time to move on to the next thing that hopefully wont be so easy to steal…and if and when someone figures out how to steal that too…then too bad for you…time to abandoned that business model and move on…
And you really don’t give real world examples…you cite a lot of studies and theories…and you say hey there’s a ton of bands and labels that are doing it and making money but unlike the list of studies and theories you don’t provide a list of bands and labels that are raking in the $ by applying your theory.
Re: Giving it away for free
Oh my goodness – I cannot believe I’m contributing to this already bloated and painful discussion. I’m only replying to this because I just couldn’t let this go but frankly none of the rest of your post is worth replying to as the arguments you’re making here are the same ones which have been answered over and over in this discussion.
For the last time, Mike is not trying to force anyone to do anything, and he is not advocating piracy in any way. He is merely pointing out the reality of the market, and suggesting a way of approaching the changing market that has more potential for success.
And you really don’t give real world examples…you cite a lot of studies and theories…and you say hey there’s a ton of bands and labels that are doing it and making money but unlike the list of studies and theories you don’t provide a list of bands and labels that are raking in the $ by applying your theory.
Excuse me? Did you really just say that Mike is not giving real world examples??? Are you kidding me? Mike is continually posting REAL WORLD examples of musicians and other content creators benefiting by doing exactly what he’s advocating here: recognizing the infinite components of their product and recognizing the scarce components of their product and using the infinite components to enhance and promote the scarce components. All you have to do is go back in the TD archives and look.
Phew – I’m done.
Music is not infinite
your arguments are wrong…from the very outset they are wrong…
music is not infinite…it is not a non-scarce product…and it is not a zero-cost product…
the only thing that makes music anything approaching non-scarce is pirated copies…
mike is advocating giving up to piracy…he is saying that since dishonest people have figured out how to steal your product you should just give it away…
he is saying to abandon a legitimate revenue stream to piracy…and just hope that you can recoup the loss of revenue through live performances or other merchandise…why would anyone advocate that…when you can generate revenue through music sales, performances and merchandise…
he is propagating the myth that pirating music is not harmful to musicians and labels…
that argument is insane…
cars are easy to steal too…should car manufacturers just give up and hope to make money selling accessories? (and i know mike will say that cars are not a non-scarce item blah blah blah…excuse excuse…blah blah)
no as a manufacturer you work to make your product more theft resistant…you don’t throw your hands in the air and say…well the crooks have figured out how to steal our product so we might as well just give it to them…and maybe we can hope to sell them something else…
bands that give away their music are not helping their fellow musicians and are not helping the industry…
music is not AIR as mike likes to try to argue…music is not a zero cost product that you give away…
music takes heart and soul and creative energy to create…not to mention time…then money and resources to record…that is not zero cost…
my art/music is valuable and i deserve to be paid for it…and REAL fans that appreciate and support the artist understand that and don’t steal and pirate music…
you are taking money from our pockets and bread from our tables when you do that…you are making it harder and harder to record new music…
it’s insane that mike and his kind really think that musicians should just give up an entire souce of income b/c it is easily stolen…insane…
real music fans don’t steal…
real business people don’t recommend you give up a revenue stream simply because criminals have figured out how to infringe upon it.
Re: Music is not infinite
This really is like beating a head against the wall. I’m not sure why you keep going back to the same points and insisting I’ve said things I haven’t said. It’s amazing. It really is amazing.
music is not infinite…it is not a non-scarce product…and it is not a zero-cost product…
zero MARGINAL cost product. zero MARGINAL cost product. Learn the difference between marginal costs and other costs. There’s no debate here. Music *is* a zero marginal cost product. It’s a non-scarce good. This isn’t up for debate, because it’s a fact. It’s not some theory. It’s not an opinion. It’s not something I’m making up. It’s simply a fact.
mike is advocating giving up to piracy…he is saying that since dishonest people have figured out how to steal your product you should just give it away…
Stu, I don’t understand how many times I need to say this, because I’ve said it at least 15 times above, and you don’t seem to want to actually respond to the points. I am NOT saying give in to piracy. THIS HAS NOTHING TO DO WITH PIRACY. I’m saying you can do better as the seller of music by using the free promotional aspects of infinite goods to your advantage.
Why you keep thinking I’m saying piracy is okay is beyond me. I have never said that. You keep insisting I’ve said it.
Please point out to me where I’ve said piracy is okay or that you should give in to piracy and I’ll admit I’m wrong. Otherwise, it’s time for you to admit that you are wrong.
he is propagating the myth that pirating music is not harmful to musicians and labels…
Repeat after me: THIS HAS NOTHING TO DO WITH PIRACY.
This has to do with marketing strategy.
he is saying to abandon a legitimate revenue stream to piracy…and just hope that you can recoup the loss of revenue through live performances or other merchandise…why would anyone advocate that…when you can generate revenue through music sales, performances and merchandise…
THIS HAS NOTHING TO DO WITH PIRACY.
What I’m saying is that you can expand your market and make a lot more money by understanding the promotional benefits of infinite goods. Why would I advocate that? Because it’s GOOD FOR BUSINESS.
You say “why would anyone advocate” giving away a product to sell more of something else? Why? Because it’s how marketing has always worked. Buy one, get one free. Buy a sandwich, get a free soda. Here’s a free sample. It’s called a promotion and you do it because it enlarges the market for other products.
Even better, when you understand how complementary products work, it works out even better. Why are Gillette razors so cheap? Because they make so much money selling the blades. According to you, they’re throwing away money by “abandoning the legitimate revenue stream” of selling the razors. That’s incorrect. Why? Because Gillette understands how complementary products INCREASE the value of their complements and allow them to make MORE money.
What I’m trying to explain is that music is the product that makes many other products MUCH MORE VALUABLE so you can make MUCH MORE MONEY by using it as the promotion.
Why is it so good for promotions? Because once you’ve created it, there’s NO COST to using it for promotions. You are essentially getting FREE promotional ability. That’s fantastic. Most promotions cost a lot of money. But here’s one that’s free, and the more of it that’s used, the more money you get to make off the complementary products.
cars are easy to steal too…should car manufacturers just give up and hope to make money selling accessories?
Stu. Seriously. Learn the difference between scarce and non-scarce goods. You say “blah blah blah” but what you are brushing off is the key reason why what you’re saying doesn’t make sense. If someone steals a car, it’s GONE. That’s a huge difference from someone listening to a song.
no as a manufacturer you work to make your product more theft resistant…you don’t throw your hands in the air and say…well the crooks have figured out how to steal our product so we might as well just give it to them…and maybe we can hope to sell them something else…
Stu, repeat after me: What I’m saying has NOTHING TO DO WITH PIRACY.
However, I will say that if making your product more “theft resistant” leads to a worse consumer experience, while all your competitors are offering a better consumer experience, you’re going to be in a world of hurt as a business man.
bands that give away their music are not helping their fellow musicians and are not helping the industry…
Ah, the crux of the argument. The bands that actually understand this model and are making a damn fine living off of it are hurting you who refuse to recognize the model. You’re basically admitting that you’re unhappy that other bands have figured this out.
music takes heart and soul and creative energy to create…not to mention time…then money and resources to record…that is not zero cost…
Stu. How many times must I repeat it. I have NEVER said that it doesn’t cost time and money and resources to *create* music. In fact, that’s a KEY point. You absolutely *can* charge for the *creation* of music, because that’s a scarce good.
You keep arguing against what you think I’m saying and not what I’m saying.
It doesn’t help your argument.
you are taking money from our pockets and bread from our tables when you do that…you are making it harder and harder to record new music…
This is absolutely false. I am showing you how to make MORE money. I’m not forcing anyone to do anything. And, I’m not making it harder to record new music. In fact, more new music is being recorded today than ever before — and much of it because of the model I’m advocating.
it’s insane that mike and his kind really think that musicians should just give up an entire souce of income b/c it is easily stolen…insane…
Stu. IT HAS NOTHING TO DO WITH PIRACY. I’m saying you make more money this way even in the total absence of piracy.
real business people don’t recommend you give up a revenue stream simply because criminals have figured out how to infringe upon it.
It’s not because people are infringing. It’s because you can make more money.
I’ve said it 1,000 times. I’ve said it above and you ignored it. I don’t know how many more times or ways I can say it and how many more times and ways you can ignore it and miss the point.
insane
your arguments are wrong…from the very outset they are wrong…
music is not infinite…it is not a non-scarce product…and it is not a zero-cost product…
the only thing that makes music anything approaching non-scarce is pirated copies…
mike is advocating giving up to piracy…he is saying that since dishonest people have figured out how to steal your product you should just give it away…
he is saying to abandon a legitimate revenue stream to piracy…and just hope that you can recoup the loss of revenue through live performances or other merchandise…why would anyone advocate that…when you can generate revenue through music sales, performances and merchandise…
he is propagating the myth that pirating music is not harmful to musicians and labels…
that argument is insane…
cars are easy to steal too…should car manufacturers just give up and hope to make money selling accessories? (and i know mike will make the excuse that cars are different than music blah blah)
no as a manufacturer you work to make your product more theft resistant…you don’t throw your hands in the air and say…well the crooks have figured out how to steal our product so we might as well just give it to them…and maybe we can hope to sell them something else…
bands that give away their music are not helping their fellow musicians and are not helping the industry…
music is not AIR as mike likes to try to argue…music is not a zero cost product that you give away…
music takes heart and soul and creative energy to create…not to mention time…then money and resources to record…that is not zero cost…
my art/music is valuable and i deserve to be paid for it…and REAL fans that appreciate and support the artist understand that and don’t steal and pirate music…
you are taking money from our pockets and bread from our tables when you do that…you are making it harder and harder to record new music…
it’s insane that mike and his kind really think that musicians should just give up an entire souce of income b/c it is easily stolen…insane…
real music fans don’t steal…
real business people don’t recommend you give up a revenue stream simply because criminals have figured out how to infringe upon it.
Not a correct statement
Mike quote:
“In fact, more new music is being recorded today than ever before — and much of it because of the model I’m advocating.”
Not even close Mike – more is being recorded because of the drop in prices for computer based recording putting it in reach of more people. Musicians tend to create the music then realize they have to figure out a way to distribute it.
Please correct yourself.
Re: Not a correct statement
more is being recorded
Wait, wait, wait… TiredofLame, your entire argument was based on the fact that all of this piracy was destroying the music business… and yet you even admit that more music is being recorded than ever before.
What happened to all the complaints that I was killing off the industry?
because of the drop in prices for computer based recording putting it in reach of more people.
That *is* the model. I’m not sure why you think that’s against my model… other than the fact that you keep making it clear you haven’t actually understood the model.
It’s funny, you deny that making music cheaper will grow a market, but then admit that making computer recording equipment cheaper has grown a market. Making stuff cheaper can grow a market. It can and it does. It always has.
This whole argument is rather stupid
After reading through much of this commentary, it’s pretty clear that the business majors have little or no appreciation for art in life. Everything is $ and profit, and you’d rather make a buck than do anything that wasn’t financially beneficial but helped further the cause of art.
The fact is, you can use whatever business model you want to maximize profits and work around the problem, but the record industry will always find a way to use it to their advantage to push generic, manufactured music into our lives. In the process you’re just royally screwing the independent artist, who is now *expected* to give his music away for free.
Unfortunately we live in a society where money is valued over art, and I believe if this ordering of values continues in the future, we’re going to see a large collapse in the type of music being created.
It’s probably difficult for many of you to understand, but there is a difference between “ethics” and “business ethics.” Most notably, the former actually existing…
Re: This whole argument is rather stupid
After reading through much of this commentary, it’s pretty clear that the business majors have little or no appreciation for art in life. Everything is $ and profit, and you’d rather make a buck than do anything that wasn’t financially beneficial but helped further the cause of art.
You seem confused. Under this model *more* music gets produced and *more* music is available for everyone. It’s *better* for artists.
In the process you’re just royally screwing the independent artist, who is now *expected* to give his music away for free.
You left out the part where that independent artist can now actually make a living out of their art. HOw is that a bad thing?
Unfortunately we live in a society where money is valued over art, and I believe if this ordering of values continues in the future, we’re going to see a large collapse in the type of music being created.
Because many more independent artists can make a living making their music?
As has been pointed out, MORE music than ever before is being recorded these days because there are MORE opportunities than ever before to get that music heard and to make a living.
i am riding the fence here, in a way
Firstly: StuCop is in the right here. Nearly everything he has said so far is correct. legally correct, technically correct, just plain correct, etc etc. As the head of a record label, he knows first-hand how piracy can hurt business, and thats really all that any of you need to know to realise that he knows the subject, and absolutely knows what he is talking about.
Secondly: i am guilty of piracy. that should save anyone from having to accuse me of it. i am guilty of piracy, and i will probably continue to be guilty of it for 2 or 3 years more. i am also guilty of buying massive amounts of records (albeit from certain labels, but that is beside the point, at this point… cheap grammatical thrills here?). i am obviously in the minority here (i think this was touched on much farther up the page), and most casual pirates dont buy any of the music they steal.
piracy affords me the opportunity to pick and choose, to spend my money more wisely than i otherwise could. BUT!….
that absolutely does not make it right. i AM hurting any musicians whose albums i do not choose to purchase. arguments against this are usually structured as follows: “well i am not hurting them because i wouldnt have bought their album anyway”, but you downloaded it, decided it was shit, and probably told your friends it was shit too. so you may have hampered sales a bit there. quite possibly more than a bit, but for argument’s sake, lets assume that you didnt hurt that much, because you and your friends are a bunch of pretentious assholes and dont talk to anyone you deem musically unfit (shit… that sounds just like me… er….).
this brings me to my Third point: artists of little substance have the most ground to lose in this battle. (and possibly artists with shitty album art and boring packaging?). bands on labels like TRL or Touch & Go or Southern Lord or Kranky or Constellation arent going to lose (as) much ground. many (read: the majority) of their loyal fans are going to buy their newest releases solely based on the band’s prior work, and the packaging the music comes in/with. limited edition vinyl, box sets, preorder deals, etc etc. the reason that labels like TRL and Southern Lord keep doing this is because they know that their mainstays are incredible musicians who have loyal fans.
labels with bad music (NOT pointing any fingers here, StuCop, i am actually unfamiliar with your label and any musicians on it), are the ones that stand to lose the most ground. (if i was creed’s label i would be shitting my pants right now). these bands will be downloaded, and of course, some people will buy the album (i think “popular” is a key word here), but the intelligent consumer will recognise the lack of substance in the artist’s work, and will refuse to purchase it.
the answer here, i think, is for labels to choose who they sign based on talent, not on general marketability. (of course this wont happen, but that is one answer to the problem) i predict (and i truly hope that i am right) that labels who have been doing this since day one will see little change in their volume of sales.
and in the long run, i think that is the only feasible solution. that or going back to analogue…. but people can rip analogue to digital with no trouble, so thats not really an answer either. people will continue to be pirates, even if serious prosecution and penalties occur. everyone thinks “well i am just one person doing this, nobody will pay attention to me”. i myself am guilty of this, although my university’s network affords me slightly more protection that the average pirate. the tautology: digital is digital. the format itself was designed to be copied (not music obviously, but digital data in general), and so fighting piracy is comparable to trying to create data on a computer which cannot perform the task it was originally designed to do. i dont particularly like that analogy, but i cant think of a better one at the moment.
soooooooooo, i predict the winner(s) in the piracy battle going on will be artists/bands/labels that create/carry/produce/distribute music with the most merit (technically, artistically, overall quality, etc).
This is fun
I can just see Mike banging his head against the desk as he types his replies to Stu and TiredofLame…
I am just happy that I got his concession that some musicians may be able to charge for his songs. Certainly this might reduce his market size – but if it’s the right market segment (and willing to pay), then why not? I just want to point out that this concept can’t be applied across the board.
You better repair the desk Mike…
obvious solution
i say just add .01-tax/gig of all data downloaded collected by your isp who will then give it to the copyright boards to divide as they see fit. folks don’t use the likes of aol, yahoo, verizon or comcast for the technolgy but for the content. purchased online media stuff would have the tax rebated. you can’t create an army of millions of investigators to go after every downloader nor can you go back to the days of how it used to be.
Not even close
Mike quote
“Because many more independent artists can make a living making their music?”
Not even close. I am a member of a large music community – the Sonar forum. It demographically represents a huge statistically valid section of all the different elements of todays musician and music engineering and production community. People all the time start polls with questions like “What percent here are making money from music?” and also anonymous questions like income ranges from music.
Guess what?
1. even though the number of musicians recording is going up fewer are making any money at all from it- they do it as a hobby. And it is a great hobby at that.
2. The pro level people are reporting lower income this year and the raw number of pro people is in actual decline from last year and the stress levels are off the chart
Mike- you can’t just keep making this stuff up because you are so enamored with your theory. What do you think the implications are for the above two factors?
And don’t try to come back with “my theory just needs more time to show it works in real life” because for all intents and purposes “everything is free on P2P” has existed long enuf that the above set of conditions I have detailed to you should be different if your theory is correct.
Re: Not even close
Mike- you can’t just keep making this stuff up because you are so enamored with your theory. What do you think the implications are for the above two factors? And don’t try to come back with “my theory just needs more time to show it works in real life”
No. It doesn’t need more time and I’d never say that. What it needs are people who actually understand the model. While you mistakenly (and I really can’t understand why) claim my theory is “everything must be free” that’s not it at all. It’s just that *the music* is free and you need to charge for other stuff. Musicians who don’t understand this and don’t know what to charge for and don’t know how to use free to their advantage will be worse off. That’s what you’re seeing.
How many of the people that you’re discussing are actually using the model? How many are purposely giving away their content for free and then selling the complementary scarce products?
Circular Argument Coming On
Below are not actual Mike quotes (for illustration only):
Mike: More musicians are making more money because they recognize the value of “free”
me: More musicians are making less money
Mike: It’s because the ones who stay in are using the old model and the sun is setting fast. The ones that dropped out obviously didn’t fully implement my model.
Me: So how can the same theory describe two totally different outcomes?
Mike: It’s because the ones who stay in are using the old model and the sun is setting fast. The ones that dropped out obviously didn’t fully implement my model.
Your question about how many people are actually using the new model is a fair one that I doubt at this point you or I can conclusively answer.
The complementary scare products net profit that you mention is way overstated and at some point you or I need to shout out some calculations on a simple spreadsheet to hash that out. I simply cannot duplicate your theory on this.
I think one of the errors in your calculations versus mine is that the old model for a band they already monetize the things you think are unmonetized. I just don’t think under the old model that people are leaving that much money on the table (I know that I am not). So you have to show all profits from all monetization activities and then allocate whether they are available under the old model and if they are already claimed then you cannot double claim them in your new model (after all you are the one making the claim that there will be all these new ways to monetize). I seriously think this is the main problem with your calculations for an individual band or player in this space.
The other major hurdle you will have to cross that you are currently glossing over is proving on a whole industry pie level that the music pie will actually get bigger. Since income levels in the US (and I think you have to discount or ignore global sales under your model because a scarce personal appearance schedule cannot possible be full time in the US and simultaneously worldwide) are relatively static in this period and energy costs are up you have to able to show that that you model would convince people to spend more in this sector and less for games, cable, eating out, video, movies, DVDs and all the other choices. You theorize on this but you need more.
Re: Circular Argument Coming On
I think one of the errors in your calculations versus mine is that the old model for a band they already monetize the things you think are unmonetized
They are monetizing some things… but not enough. That’s because they’re way too focused on monetizing the music.
I just don’t think under the old model that people are leaving that much money on the table (I know that I am not).
But if you use the new model properly, you enlarge your fanbase quite a bit and open up all sorts of new opportunities to make money from a lot more people. It’s not doublecounting, it’s recognizing how you grow a market, rather than trying to squeeze more money out of a smaller group of people.
As for showing the numbers, I’m going through a variety of historical data to show the equivalencies here. The thing that’s amazing to me is the sheer magnitude of the results. Industries are revolutionized when they open up, and the opportunities for profit are so ridiculously different than before that it’s shocking. But you have to get out of the mindset of thinking that you’re just selling to make up the difference. You need to realize that you have a huge new market opportunity.
Mike, your patience astounds me….