Wednesday, 14 January 2009


Yesterday I had an interesting meeting with a man called Simon where we were discussing recorded music, adding value back into physical products and the long tail. Over the past few months I've read a lot of articles and arguements for making music free - for the benefit of increasing other revenues such as live income, merchandise etc etc. The premise being that the further your music spreads, the larger your fanbase will grow and therefore, the more people will be coming to your gigs and wanting your t-shirts. Of course, there are always the optional extras such as deluxe boxets ala Radiohead (who made their most recent record available for any price you chose to pay, and actually made more money from it than from any of their previous albums) or Nine Inch Nails (who, despite making their music free, were still the top selling artists on Amazons MP3 site in 2008). There situations are slightly different to the bands we're working with, being well established, multinational brands with years of major label marketing behind them, but the concept works all the way down.

During our meeting, Simon told me that his philosophy for 2009 is to give nothing away for free. A complete contradiction to the above, but one which also has its merits.

Ok charging for everything isn't going to see your music reach as many weird and wonderful corners of the globe, but there is definitely higher value in your work than the £0.00 some people are charging. If you start giving things away for free too early, your fans will expect that throughout your career and you may find it difficult to successfully start pricing further down the line. With money coming in from physical sales, there's cash available to reinvest in the artists marketing, which, if spent wisely, should see a return in a growing fanbase. And if digital fans want to own your recordings badly enough, 79p isn't a steep price to pay. Effectively fewer people receive your recorded output, but you're seeing a financial return for it all, and when I say recorded music, I don't just mean the well polished album masters, we're talking live recordings, remixes, demos, everything! They all have a price. Nettwerk successfuly managed it with the Barenaked Ladies and will continue to do so with their other artists. It's the long tail. Selling less of more adds up to giving away lots for nothing.

I think I stand firmly in the middle of this debate. As a music fan it's a very exciting time, but from a label point of view I can see the reasons for both arguements and as such, find it a little hard to decide what will work best for us in the future. I'm convinced a physical market will always exist (it still makes up the vast majority of music sales - and that includes the major labels who are pissing customers away a lot quicker than us indies and our real music fans) but am not stupid enough to believe it'll always retain its current form. As ad supported streaming websites such as the much talked about Spotify, and cloud computing (your music collection 'online', available to you anywhere, anytime, without the need to carry a memory card) become more and more common, the difference between physical and digital sales will (at somepoint) balance out. I guess we will have fallen one side of the fence or the other by that time, but we'll have to wait and see which way the wind blows first.

1 comment:

Sweet and Tender Hooligan said...

Interesting post, and on a subject I have written extensively about.

The ‘giving music away for free’ model is something that lends itself to a band self releasing their work, therefore the label is not on hand to have to look at recouping any costs. I think that adding value to band’s proposition, be it through free download only singles, live tracks for people willing to be on mailing lists or indeed buying the product is a really worthwhile things for both bands and labels to do.

The long tail is not an economic, it basically lends itself to the happy-go-lucky hobbyists who don’t mind losing money and don’t have any staff/bands to pay. It’s a well written and thought provoking idea, but much like Gladwell’s ‘tipping point’, it is being used to describe things that a patently wrong.

The long tail has always existed underneath the radar, the internet increases the potential for niches to grow, but I personally don’t think it necessarily means that it increases the chances necessarily. The flat earth of web 2.0 means that everything band and label now has the tools to spam people, offer a web portal to sell wares etc. The economies of scale means that although lottery tickets are freely available, there is more people in the lottery, lessening the chance of winning.

To return to ‘free’, Trent Reznor actually only made part (9/36 songs) of that album available for free, not all, which slightly tarnishes the point.

The key thing labels of all sizes must do is improve their digital products, adding value to those services and attempting to breach the gap in revenues that CDs provide. While I in no way think the CD is dead, particularly for indie labels, consider how production prices are likely to up as digital is taken up more by majors?