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July 5, 2005
Music industry Plan B
Great minds think alike (actually it is relatively obvious and lots of people have been talking about it). From Mike Langberg at the San Jose Mercury News comes Piracy unpreventable. Plan B: Just make music free. Sounds a lot like what I have been advocating (most recently, see Music industry adjusts to file sharing). Here is what Langberg calls Plan B:
Musicians give away recorded music to build their reputation. They make money from concert tickets, licensed merchandise, selling rights to their songs for TV commercials and movies, and anything else that can't be undermined by free online distribution.
. . .
Generating enough extra demand to sell out just one additional big concert during a tour could easily cover the several hundred thousand dollars required to create and give away a new album.
Songwriters who don't perform would still get compensated through royalties for concert performances and soundtracks, and perhaps through one-time payments from performers who want to record a song for free online distribution.
Radio stations would operate much as before. Some people might be willing to pay a few dollars for the convenience of getting new albums in CD form, so CDs could still be found on store shelves.
Even the big record labels could re-invent themselves. The labels are very good at taking unknown acts, marketing them aggressively and turning them into stars. In exchange for these services, the labels could take a share -- more than likely a big share -- of concert, merchandising and publishing revenue.
In the end, my proposed world of free recorded music might not look that different from today. Musicians would still have to tour relentlessly to make a living, and big media companies would still call the shots. But at least we, the audience, could fill our iPods to the brim without guilt.
Langberg has done a great job is fleshing out how the new model might work.
He also points out the problems with the movie industry:
Online piracy of movies is starting to grow rapidly, and there's no way Hollywood can give away its films and make up the difference elsewhere. What might work for Joss Stone, in other words, won't work for Sharon Stone.
That echoes things I have said as well. However, in my earlier posting (see For the future of ...), I argue that movies may have to learn from the video game industry and create a more interactive form in order to survive.
The business models just keep changing in this Information-Innovation-Intangible Economy.
Posted by Ken Jarboe at July 5, 2005 2:25 PM
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