Why Giving Away Music Concedes Defeat to Piracy
September 3, 2009 – 11:41 amAs much as we here love TechCrunch, it is rare for them to publish an article on digital media or piracy without a reference to their 2007 party-line that music should be free (Orli Yakuel’s recent Guide to Music on the Web being a notable exception).
The premise here being that because the cost of production for digital music is near zero, the cost to purchase should also be near zero given perfect competition. This ignores the value of the product, regardless of cost to produce – an argument included in Paul Glazowski’s highly publicized rebuttal.
Regardless of who is right on this, the TC article proclaims that the industry will shift their revenue model to focusing on their “real products” – the live performance.
This angle is flawed as giving away music for free suggests there is no utility in the recorded product apart from promoting the live show. Anyone who listens to music for pleasure with no intention of seeing the live show effectively becomes a free-loader and compromises the market dynamics required for this to work.
The reality is that the music-listening but non-show-going user segment is likely to be significant for a range of reasons such as:
(a) I’m a fan of the artist but not a fan of the artist’s fans so the chances of spending an evening with them is slim
(b) I’m a fan of the artist but work/home commitments mean I can’t make the gig
(c) I’m a fan of the artist but they don’t tour where I live (or don’t tour at all)
(d) I’m a fan of the artist but know they suck in concert
Any music listener who can identify with these statements would have their listening pleasure funded by the concert-going public if labels were to give away music. This could readily lead to a downward spiral as concert prices ramp up to make up the loss – ultimately reducing the demand for tickets and destroying the now singular revenue stream for the entire industry.
While we agree that the nature of the music industry needs to change, giving music away for no robust reason lacks imagination and is a cop out – capitulation in face of the not insurmountable threat of music piracy.