Posted by: Phil | December 15, 2009

Music on the Internet

Bootleg tapes, CD-Rs and P2P. All frightening adversaries that threatened to take down the music industry at one point or another by taking the legs out from under CD sales. Record companies did everything to stop the pursuit of free music from banning tape recorders from shows during the 80s to which punk bands responded by handing out blank tapes. CD-Rs and P2P services are still around and record companies and the RIAA are throwing around million dollar lawsuits pretty much monthly against both the services and even against individuals using those services. But, regardless of what record companies tried to do, they all inevitably affected the industry in one way or another. CD sales are now down to only accounting for a 1/3 of musicians’ overall income with merchandise, touring and other forms of revenue making up the other 2/3s. As a result, bands have taken to the internet to release free content in order to attract consumers rather than relying on cracking the top 20 in Billboard sales.

Jesse von Doom works at CASH Music, a non-profit organization that offers artists the tools to release content ranging from single tracks to full albums to even concerts for free online. The site has worked with bands like Portugal. the Man and Earl Greyhound to release both live performances and an entire EP for free online in order to promote their music. In an email exchange, I asked him about what it’s like to distribute music for free.

Me: How do you go about getting the content on your site? Do bands approach you to distribute their content or do you ask them?

Jesse von Doom: How we get content: we work with artists we know, or artists who have been invited. The content is always theirs, and it’s always coupled with specific goals on their end.

Me: Your site is about offering free content to the consumer. How do you see offering things like free album streams and full live concerts helping artists?

JvD: How free content benefits artists: exposure and data collection. Free content has been around for years in the form of radio and MTV, neither of which pay performance royalties. Thankfully that’s changing, but it’s still vital that artists get their music out in some way that can make people excited and willing to purchase. Sometimes the benefit is simply giving a taste and hoping that people buy a full release. In other cases it has more to do with collecting data like email and location, enabling an artist to better market their live show. There are other benefits to free as well, such as building rapid popularity and cashing in on sync licensing (music for TV and film.)

Me: Do you feel like offering all this free content cheapens the idea of music or is just the next logical step how people digest music?

JvD: Free cheapening music: well music pre-dates capitalism and will be around long after the last penny has lost its luster. So no I don’t think the price cheapens the art. I do think that giving too much away can be detrimental for an artist if they don’t have a plan. It’s a very valid practice, but as an artist you have to know where your revenue is coming from and plan for that.

Me: Ultimately, what do you feel your site offers as an open-source website and where do you want your site to go in the future?

JvD: The future: Ultimately CASH is looking to become an established foundation benefitting artists and the music industry as a whole. There’s a bit of a social obligation to keep music alive because it’s more than simple commerce… it’s culture as well.

Perception

The idea of giving away free music on the internet goes beyond simply bands giving content away. In this new era of the internet where instant gratification is only a few clicks away, people expect that they are going to be given some form of content for free. Michael Porch, a 21-year-old junior, says “I expect there should be some way to hear their music for free before buying it.” With sites like Myspace and Facebook allowing consumers to sample bands’ music for free, people now no longer have to rely on their local record store or even radio station for recommendations.

Free Streaming/Downloads

Now sites like Grooveshark and Lala (Which was recently purchased by iTunes) allow users to stream any track they want for free for a limited time. Also, bands like Radiohead and Nine Inch Nails have released entire albums where people could choose their own price. The albums were a large breakthrough in the industry, creating a different standard for how people digest their music. Radiohead reported about 1.2 million downloads in the first week, with around $10 million dollars in revenue. “I think the option to pay is a pretty good deal,” said Porch, “I remember I downloaded the one Saul Williams album off his website and I remember at the time I didn’t have any money. I had no way of paying online so I downloaded it, but I know my other friend donated like $10 because he liked the album.”

Piracy

However, these are all remedies for a much larger problem. As mentioned before, piracy is a large problem in the music industry. In 2007, the Institute for Policy Innovation reported that $12.5 billion dollars are lost annually due to piracy. Joe Lamberti, a 20-year-old junior, estimated that about 50% of his music library is through actually purchasing an album. “It used to be way more, but CDs are definitely not something I invest money in. All in high school, I would buy CDs, but now I don’t have money, so I just download them. And I feel bad, because I feel like I’m kind of obligated to buy albums of bands I really like because I always have in the past,” he says.

Now sites like Grooveshark and Lala using ad-based revenue to give users the ability to stream music whenever they want in order to combat these long-running problems. Lala.com offers a service where users can spend only $0.10 in order to stream a song whenever they want. And now with Apple acquiring the site, cloud hosted streaming could move into the mainstream if Apple decides to us Lala’s service on iTunes.

Whether Radiohead’s solution orApple’s solution proves right, ultimately they are both solutions to a billion dollar problem.

(By the way, this would be my final project.)

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