by : Business, October 2013

The Cost of Free

The Cost of Free

When it comes to recorded music, today’s consumers enjoy a free ride and seem to have all the answers.  Song sharing is there for the taking and, in any case, the old music sales model is archaic. But if out with the old and in with the new is stylish in music, the same is not true of music recordings.

For the business, it seems, free is good.  However, the decline of recorded music sales has been catastrophic since 2001, when piracy became rampant and the single song Apple economy banished the album. Now, hope for the sector requires a giant leap of faith. In the meantime, the tough job of finding new ways to compensate for this loss of profits falls to the record companies. It may appear that artists are gaining more exposure as music changes hands often and easily. But is the moneymaking of old  within the reach of the business?

In recent years, the recording industry has endeavored to replace its album-based revenue stream with more panoptical and commercial based income.  For instance, it has used 360 degree type deals, whose object is to secure additional revenue for the label by tapping on artists’ live performances, branding, and merchandising. This has been seen by some, including well known trade writer Donald Passman, as the cornerstone of an industry response to the crisis of recordings.

Certainly, today’s artists seem to make much more income from touring than records.  The more songs are shared for free, the more artists get heard and talked about. Many independent bands follow this approach and encourage peer-to-peer file exchanges in order to get their names out there.  But a whole generation of talent seems to be going further and posting music for free online in the hope of gaining notoriety. For example, Drake has added plenty of appeal by regularly adding free songs to his website while chart topping rapper Mac Miller maintains that his career began with the distribution of free mixtapes. Similarly, music sampling is used to create larger fan bases and drive concert attendances through illegal downloading and free dispersal, something that Lil Wayne and Kanye West know well.

What this means for record companies is total alienation from the traditional business model, and near zero emphasis on recorded music and no money for artist development.   The supply chain, and especially talent, has been taking a hit, with the U.S., for example, suffering, by any standards, a catastrophic drop in the value of recordings (from $12 billion in 2001 to about $6 billion today). Moreover, successful  Instances of ‘ free’ seem exaggerated and are often only suited for top ranking stars who have plenty of access to multimedia and residual bankroll. Radiohead’s attempt at financing a new release with fan donations in 2007 met with poor results; the band, at the time the poster child for the new music economy, has since regretted the move.

In the meantime, subscription and/or ad-based streaming services deliver poorly for artists–which does not help engrain the concept of music recordings as a valuable commodity for investors or the public. In the clamor for ‘free’, honest, good work, is getting lost in the shuffle, with the business community oddly silent about the time spent by artists honing their craft, writing music, practicing, studying the music of others, performing, and mimicking until they come up with the best possible material they can muster. Music production, one of the leading edges of our culture, seems to be held hostage to a vague and ill-suited business proposition: that marketing reigns supreme.

For sure, artists end up in atypical situations in order to stay alive and relevant.  The public is most plugged into entertainment that promotes an escalating shock and awe standard, and this means that writers, producers, and performers must continue to push boundaries in order to keep their jobs and/or remain in the public eye. Stars like Miley Cyrus and Britney Spears stun the public by baring skin on camera, while lyrics , such as Robin Thicke’s “Blurred Lines”, are used ever more provocatively.  Similarly, the media will only sign artists with all eyes and ears on them. Therefore, it is not enough for a musician to be noticed; they must pop-up and make an indelible impression by any means.  This was not so when recordings were valuable.

The whiplash of free, in conclusion, may well be the complete erosion of recorded music as a commodity. This is a very steep price to pay for the industry.

 

By Athena Butler

 

Endnotes

1. Curien, Nicolas, and Francois Moreau. “The Music Industry in the Digital Era: Towards New Business Frontiers?” Thesis. Laboratoire D’Econométrie, Conservatoire National Des Arts Et Métiers http://www.eeaesem.com/papers/EEA/2005/1142/CurienMoreauMusic2.pdf

2. Cummings, Alex. “Is Piracy Killing Independent Music?” The Brooklyn Rail http://www.brooklynrail.org/2007/12/music/is-piracy-killing-independent-music

3. “Illegal downloaders spend most on music: study” The New Zealand Herald http://www.nzherald.co.nz/technology/news/article.cfm?c_id=5&objectid=10606781

4. Caramanica, Jon. “For Some, Free Music Is an Investment That Pays Off” The New York Times http://www.nytimes.com/2011/11/19/arts/music/for-mac-miller-wale-and-j-cole-free-music-pays-off.html?pagewanted=all&_r=0

 

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