Okay, it's a day old and linked from Slashdot, but it took me this long to get my thoughts in order about the music industry opposition to this idea. This article suggests that music could be made available online for just 5 cents per song, and that this would attract a great percentage of the current illegal download market. The music industry objections are that this would conscript artists into a 5-cents-a-song model (as opposed to a "you must be big enough to sell millions of circles of plastic" model?) and that it would destroy record company incentives to invest in new acts. I'd like to answer the second point in more depth.
If a song is going to be available online, the distribution costs are near zero. If a record company doesn't believe in an act, then just sign them on a percentage of online sales and put their unproduced demo up. People might happen to like it, and there you have free money, a phrase which is sure to make the little dollar signs light up in their eyes. If nobody downloads a single copy of that music, then absolutely no harm is done. You didn't spend a cent, and the band don't have to be paid because nobody cares. Harsh, but that's capitalism for you. If a band's demo does turn out to be popular, then you can spend the money on producing a "proper" album, and maybe you can even charge more for those tracks.
The point is this: not everything coming out of a music company has to cost money before it can make money. Instead of spending money evaluating demos, deciding if they'll be popular enough, producing an album, cutting CDs, producing cover art and arranging for hype and advertising, just sign everyone on percentage, and make higher-quality production decisions based on demo revenues. It's easier that way, and it will make more money for less outlay.
Mokalus of Borg
PS - All will bow before Mokalus' +1 Hat of Internet Economics!
PPS - This concludes today's lesson.
No comments:
Post a Comment