Free Doesn't Mean Devalued

from the more-to-life-than-money dept

The concept of zero took ages for societies to recognize, let alone understand. Mike has explained before how it's been a stumbling block in economics for some libertarian and "free market" types more recently. People who think about economics in terms of scarcity get upset when abundance pushes price down towards zero, as if the economic equation were broken. But if you flip the equation and think of it as a cost of zero, you realize that the trick is to use as much of those abundant goods as possible, adding value to complementary scarcities for which you can charge. Zero doesn't break economics, it just requires a different approach.

But artists and other creators hit a different stumbling block than libertarians (libertarian artists aside...). Zero is a problem because they feel like their art is worthless; they aren't hung up on scarcity, they're hung up on "devaluation." We've heard it from journalists. I hear it most often from fellow songwriters. The economic theory makes them feel as though their work is just viewed as some sort of cheap commodity. The thing is, value and price are not the same. Price is monetary value, but value is so much more than money. Price is what gets driven down to marginal cost, but value factors into the demand side of the equation. Expensive things aren't necessarily valuable, and valuable things aren't necessarily expensive. I value oxygen a lot, but it seems silly to pay for the air I breathe each minute, given the abundant supply.

More importantly, songwriters who get hung up on "devaluation" confuse recordings with music. They equate the two. A recording is not the song, it's just an instance of it, and a digital audio file is just an instance of the recording. Equating these reduces music to recordings to files. As important as recordings are, there's so much more to music. When you think of a song, do you think of the recording, or a memory you had connecting with the music? Do you think of the file and how much it cost, or the emotions, people and experiences that the music conjures up? The recordings are just a means through which we experience the music. Songwriters (of all people!) should know that the value in music is so much more than the price of a recording. It's not devaluing music to give it away for free, but it can increase its value by allowing more people to connect with it, to know, love and understand it -- to value it. It's through that experience that music is valued, not price!

Ironically, the underlying concern ends up being economic -- how will we make money? A price of zero for digital audio files doesn't mean that no one values the songwriting profession, or that no one is willing to spend money on music and keep songwriters in business. Sharing digital audio files makes the music more valuable and leads to more opportunities for monetization. When you give music away and connect with an audience, the opportunity for monetization is in the associated scarcities -- access, containers, community, merchandise, relationships, unique goods, the creation of new music, etc. -- by giving people a reason to buy. Getting hung up on "devaluation" is a distraction from the opportunity -- the necessity -- to experiment with new business models.

So, can we please stop complaining that free means devalued?

Filed Under: free, music, value

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  1. icon
    Blaise Alleyne (profile), 13 Nov 2009 @ 8:58pm

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

    "The ability to reproduce doesn't change value or cost to produce the work, only at best the end delivery costs. Essentially, if it takes a year to produce an album (write, record, produce, package, etc), that year is a cost to the artist. Those marginal costs are only a small part of the overall costs of music, and for that matter the value of it as well."

    Yeah, of course. But those are fixed costs. Sunk costs. Basic economics explains that, in a competitive market, price gets pushed towards marginal cost -- not the fixed cost.

    So, of course you want to recoup your expenses, but to think that the price will float way up above the marginal cost of reproduction because of high fixed costs is to ignore some economic fundamentals. It's disconnected from reality.

    "To tell an artist that they can no longer make a living only by writing and producing new material because the world has learned how to steal it seems a bit odd."

    That would be odd... which is why I never said that. Writing a producing new material is a scarce offering -- that takes time and talent. But artists haven't made money that way over the past few decades anyways. They've made money from selling copies of what they write and produce, by distributing in containers to fans.

    I'm suggesting that relying on income from the distribution of containers doesn't make sense when those containers are now digital and have a marginal cost of essentially zero. That's a shaky foundation for a business model. Distribution is no longer a scarcity in most cases. So, look to other scarcities around writing and producing an album, like the artists who've solicited funding from their fans in advance of the creation process.

    "What we get is a sea of material that has less value (the Reznor example)... It appears to have the potential of a vicious cycle, where less time and effort can be put into new music because more time and effort has to be put into touring, making appearances, and selling the proverbial t-shirts."

    I don't agree with you on the Reznor example. You can say his latest stuff isn't as good, but that's subjective. Certainly, a lot of fans have been supportive. I do agree with you though that there wasn't anything outstanding, imho, on The Slip (but I still like it). But it's a huge leap to say it's quality is because of the new business model. Correlation doesn't imply causation. Artists are often inconsistent with their art. You can't just automatically attribute any weakness in the album to its business model.

    About focusing on art versus worrying about the business side of things, that's always been and always will be a problem for artists. This doesn't change much. It's more time that needs to be spent connecting with fans, instead of sucking up to labels and schmoozing with industry execs. Though, I'd argue that connecting with fans around the music is in much closer to proximity to the art than schmoozing with the industry power brokers... but no one's claiming a utopia where artists can make money without trying.

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