Musicians can prosper in the age of free music November 18, 2008Posted by eyalnow in Gift-Economy.
Tags: copyright, donating, DRM, file-sharing, free-economy, Gift-Economy, iTunes, music-industry, music-sharing, network-economy, p2p, piracy
Offering music for free adds to its value through network effects.
Musicians can tap into many income streams – donations, legal downloads, value-added CDs, live shows, collaborations, commercial-uses and more.
People are sharing music.
Through websites, p2p file sharing services, portable music players, wireless networks and hard-drives, people are getting more music than they ever have. For free.
And it’s only spreading.
Most people under 30 don’t even consider it “wrong” in any way.
It is time that musicians, labels and the whole music industry, instead of fighting it, start embracing this phenomenon and the new possibilities if offers, and find where musician, label and consumer can be mutually happy.
CD sales might be plummeting, but music creation and consumption (I’m dis-inclined to use the word “industry”) is booming, with new artists gaining popularity, and old forgotten works suddenly attracting new listeners.
More people than ever before are expressing their creative potential and reaching audiences.
More listeners are enjoying more music in more ways, places, and times of the day.
This renaissance is driven by many factors:
The explosion of the internet in the last decade and its increased use by people from all walks of life
The declining prices of computation, storage, and bandwidth
The progressive advancement in music copying technologies – cassette tapes, writable CDs, digital files
The popularity of high-capacity portable music players
The use of compressed digital music files, and
The arising of peer-to-peer networks
Music sharing adds value to the music through network effects.
People who share music, especially on a personal level, help the music industry by being promoters and advertisers of their favorite music. With so much music out there, musicians should be grateful to people who choose to listen to them, and even more grateful to file-sharers who store, distribute and recommend their music. A person who downloads a free song might become a fan, and might one day translate into a buyer.
Even a person who merely adds a tag to a song on any music download service, contributes to that song being a bit more findable and to the artist being a bit more popular
I think it is the music INDUSTRY, rather than musicians themselves, who is opposing free music, because of the fear it might go out of business.
And it is right.
The change in the music scene will lead to a sort of re-distribution of wealth.
Famous musicians are still going to make money, but a bit less.
All the middlemen – agents, labels, stores – are going to make less money, and some will go out of business.
The most important is that obscure, unknown and new artists can nowadays gain popularity faster then ever before, monetize it by aggregating small income streams across various sources, and be able to keep creating and live off their art.
And last but not least, music fans will enjoy more music, available in any time and place, by more artists, in cheaper prices, and most often for free.
There is no one-size-fits-all solution.
Some people will pay for music on legal download services, some will get it for free, some will donate for it, and some will even continue to buy CDs.
In the same way, musician will survive and prosper by embracing multiple income streams – donations, legal downloads, CD sales, commercial uses of their music, live performances, merchandise, and in other ways that will appear as technology evolves.
One income stream that is still largely untapped is donations.
Research shows that people are happy to pay for music, provided it’s easy to do so and that the money actually goes to the artist. 
Radiohead has proved that music fans are willing to pay for good music even when they are not required to. 
Sure, there will always be leeches and free-riders, but if there are enough people who donate, the artist will have another income stream to support him. 
Donating should be embraced as a viable income stream, encouraged as a social phenomena, and implemented in products and services
Applications, websites and services such as windows media player, last.fm, SoulSeek and BitTorrent should have a “DONATE” or “SUPPORT” button which will automatically transfer a set amount to the artist whose music one is listening to, downloading or reading about.
Firefox can easily have a plugin which recognizes artist names in a block of text and adds a small dollar sign next to them, which, when pressed, transfers a set amount to the artist.
There are some ways in which donating can be encouraged:
Musicians should publicly and positively ask for their fan’s support. Mention it in interviews, on stage, on TV, in your songs, on your website
Instead of marketing campaigns to discourage “piracy”, the music industry should invest in marketing campaigns that encourage donating for ones’ favorite artist
De-criminalize all acts which until now were considered “piracy”. Drop pending lawsuits against file-sharers. When people stop thinking they are subverting the system, they might cooperate
As a musician, keep a public list of all the donors on your website
Acknowledge and thank donors with a short “thank you” email
Offer incentives to donors
Make a weekly or monthly draw among all the donors to an artist. Let the winner meet the artist personally, visit him at his home, attend a live show, accompany the artist backstage, have their photos taken together, visit a recording studio, and receive autographed copies of his collector-edition box-set CDs and DVDs.
A reality-TV-style documentary can be made about each fan’s visit, which will be available at the artist’s website and on video sharing networks.
Give donors privileges such as download rights in the service
Through agreements with 3rd parties, give benefits such as discounts, gift coupons, event invitations, backstage passes, etc.
Set up a referral system; have fans accrue points for referring new listeners to their favorite artists
ALTERNATIVE INCOME STREAMS
The music industry should take an example from the web and software industries.
Software makers offer basic, limited or trial versions of their products in the hope that some customers purchase the full version. But even those that don’t upgrade, might recommend it to their friends, who in turn might become buyers.
Web sites first offer free services, attracts visitors and registered users, and then find a way to monetize them.
Free music is the shareware model of the music industry
Artists and labels should find alternative ways of generating income.
More and more income streams may appear as technology evolves in the same way that the telephone, record, sms and the internet itself, evolved in ways that their original inventors couldn’t have imagined.
Some of the alternative income streams are:
Royalties from radio and internet-radio
Commercial use – ads, TV, WebTV, movies, venues, etc
Legal music download services such as iTunes and eMusic
Endorsement of and sponsorship by commercial brands [I personally dislike this idea, but the option exists]
Selling a box set of CDs or DVDs with an added value – casing, artwork, lyrics, photos, booklet, posters, limited numbered editions autographed by the musician
Engaging in cooperation and collaboration with other artists in other media. For example, Phillip Glass didn’t just make the music for the Qatsi trilogy, he was directly involved with the creative and artistic decisions of the film-making process, working closely with Godfrey Reggio  . Since then, he has made music for many other films. Another example is “Ashes and Snow” – photo book, novel, film, and art exhibition. Exposure to any of them will entice you to seek the others 
Offering early access to new songs
Lower the price of CDs and strengthen customer confidence in them. Give a 10 year warranty over CDs. Your CD is scratched ? We’ll send you a new one.
Sell higher-quality CDs or DVDs . Original CDs are sampled at 44.1K, which is still inferior to the master recording. 
SET YOUR MUSIC FREE – HERE’S WHY
The music industry should allow p2p music sharing to co-exist along with legal music services.
People who download and share your music are your fans; They choose you over millions of other artists and songs. Instead of publicly denouncing and humiliating your fans, thank them, reward them, connect with them, encourage them to promote you, and see where you can mutually benefit. 
In most cases, a song downloaded from p2p music-sharing is not a lost sale, because the listener probably would not have bought it anyway. But now that she has an option to sample it, she may become a fan, and then a buyer. Thus, a free song is an advertisement which can lead to an actual sale.
Song files on p2p networks are usually of lower, and sometimes substantially lower quality than original CDs. So file sharers are not circulating exact copies of your CDs, but rather, what can be thought of as samples.
Once the listener heard a song, he might be tempted to purchase the original CD or original digital download, or support the artist in another way such as donating, attending a live show, buying merchandise, etc.
If people are going to share music anyway, it’s better for musicians (and their labels) to offer medium quality copies by themselves, rather than wait for high-quality copies to appear.
Musicians should not offer partial songs (first minute of a song), or songs embedded with messages, because these music files will be shared less than real complete versions of the song
Musicians and labels should set-up presence in the main music-sharing networks, similar to film makers and TV networks setting up channels on YouTube. They can then build virtual communities in these networks, connect and collaborate with their fans.
If a musician is popular in a p2p music-sharing network, he can use it as a leverage for his other income streams.
Musicians should offer their music under permissive creative-commons licenses; Allow non-commercial use of your music on the condition that users give credit in some way and, voluntarily, notify you of their use. Imagine a popular user-created video on YouTube using your song and crediting you, both in the video itself, and on the page it’s hosted on, where it is indexed by search engines.
Keep copies or links on your website of all the creative ways your music has been used, and ask visitors to vote for their favorite. Reward the creators. Engage with them.
Even a single mp3 file that uses and re-mixes different music pieces can include a list of these sources in its comments field, and can be indexed by search-engines.
Music fans actually add value to music files by adding and updating meta-information – lyrics, BPM, song info, artwork, web-links. Through natural selection, the better files spread.
Music-sharing facilitates Storage, Promotion, Discovery and Distribution of music, taking the load off brick-and mortar shops, online music stores, and to some extent, music labels.
Digital distribution is nearly free. In contrast, consider how much it costs to manufacture a CD, case, cover , hold it in a warehouse and send it – even directly – to the customer
As an aside, consider the environmental impact of manufacturing, delivering, playing (spinning physical media), and someday recycling a CD
LEGAL MUSIC DOWNLOAD SERVICES
Many more people will use legal music download services if:
The music is easy to find,
Of high quality, (high bitrate)
In a wide variety,
The services are easy to use 
The services are cheap and with many price plans – flat rate, per album, per song, per hour, per Mb, streaming, etc.
Purchases are guaranteed to last for many years.
The music is not protected by DRM, and can be legally shared with others
The music can be played on any software and portable music player
Some music is offered for free
Are musician creating music just for money?
Is it their “work”, their “job” in the same way that a factory worker has a job ?
Would musicians prefer not to let their music spread , elevate and touch hearts around the world if they don’t get their percentage ?
What else can fans and file-sharers provide the artists with ?
Find out by allowing more ways for fans to connect with – and contribute to – their favorite artists.
Recognize the most dedicated and talented of your fans, engage with them and see how they might contribute to the production and promotion of your music.
The nature of music, as part of technology, is to spread, to evolve, to pervade, to interact, to grow.
Allow it to do so.
The music industry is operating under a scarcity mentality.
Adopt an abundance mentality, and you will have abundance.
You are what you share.
The more you give, the more you receive.
Set your music free.
 “80 percent of p2p users [in the UK] said they would pay for a “legal file-sharing service.”… What the respondents appear to want is an unlimited download service free of DRM that could be legally accessed for a monthly fee, something that doesn’t yet exist. People were quite clear that an on-demand over-the-web streaming service like Last.fm won’t cut it; they want to own and control their music.”
 The average price for Radiohead’s InRainbows was 6$ among those who paid, or 2.2$ among all the 1.2 million people who downloaded it from the bands’ website during the 3 months it was available.
 Radiohead – a year later – statistics and analysis
 Jamendo, a website that supports artists through a mixture of donations and ad revenue sharing, receives an average donation of 14$ from every donor.
Statistical analysis of Jamendo’s data:
 People want to pay, by Kevin Kelly:
 1000 True fans, by Kevin Kelly
 Better than free, by Kevin Kelly
 Radiohead’s In Rainbows: A Look at Anti-Marketing in the Music Industry
 Qatsi Trilogy
 Ashes and Snow
 The Digital Devolution – 6 Ways Sound Quality Breaks Down:
 The Inevitable March of Recorded Music Towards Free
 While researching for this paper, I tried to open an iTunes account, and was greeted by the message: “The iTunes store is not available in your country yet… You will not be able to make any purchases”.
The same happened with eMusic.
Kevin Kelly and Lawrence Lessig were two major sources of inspiration for this paper. I am grateful for their insightful writing.
As a research tool for this paper, I’ve used Diigo, a service that let’s you highlight, save and manage text directly on web pages.
My sources and highlights for this paper can be found at:
This work is licensed under a Creative Commons Attribution-Noncommercial-Share Alike 3.0 United States License.