Music to your ears - Light on your pockets

The post this week is on a topic on which i have been dwelling on for quite some time now. Its on this whole concept of free music. It has been long time since most of us have actually bought a new audio disc. Lets be fair, it has been ages since we have bought music for that matter. Piracy, P2P, online music recording etc have made buying music too cumbersome(and lets not forget, costly) a task for the buyer. If we are getting something for free, then someone else must be paying for it. It is the music companies and the artists (Sadly !!!) who have to suffer.

Not so long ago, this landscape was dominated by music companies who control not only the music distribution but also the music itself. Today, I'd doubt if they make half of what they made out of music a decade ago. It is said that artists(singers and writers included) roughly earn 72 cents out of every $20 audio CD and the rest is retained by the audio company as standard markup plus selling and distribution expenses. The real money that the artists made was out of the touring that they'd do post album release. With the dawn of the new millennium, more and more users were finding even more options of accessing music for free. With the internet and the fact that a large portion of the population is becoming more savvy and alert to new sharing/socializing networks it was only a matter of time before the fans were able to do without the big labels. But this was definitely not the win-win situation that the artists wanted for long. Although it is fair to say that even they were not happy with the revenue share with music labels, they still required an additional popular medium to reach their fans

Something dramatic happened recently that promises to change this and a whole lot of other things as well. Two music bands tried something innovative which was driven more by need than anything else. Nine Inch Nails (one of my personal favorites) and Radiohead were out of contract with their music labels which enabled them walk the path rarely treaded by any of the bands/artists. A renowned metal band, Nine Inch Nails(NIN), released their album "Ghosts" for free on their website. What followed was tremendous online buzz. No one ever tried the "freemium" business model in the music industry at such a large scale. The Artists managed 8,00,000 downloads of the album from their homepage. And it was not all pain no gain. They managed a cool $1.6 million in the first week of launch by giving offers to online down loaders like $5 for a digital copy of the entire album and $75 for 2 CD's of the entire album plus one DVD. The second band which tried something similar was Radiohead. But they tried a different version of the same idea. Their fans were offered the album at "pay-whatever-price-you-are-willing-to-pay" model. But thats not all, they are offering their fans much more than just the music content. In their own terms, they offer their fans a "discbox". The discbox not only has songs but also additional tracks, exclusive artist photos, artwork and lyrics. This band again ended up making a cool $6million in sales.

The best thing about this model is that the entire proceeds out of the online sales would go to the artists themselves. It is startling that the music industry never visualized that something similar would hit them in the future. The artists realised early that no matter how loyal the fans really are, they are still averse from buying music in its present form and package. There are some who believe that Radiohead and NIN lost millions of dollars of potential revenue by not following the classic model(There is no dearth of the classic doomongers in any industry). What these people dont understand is that there are more people outthere who dont pay for the music than those who do. The people who dont pay for the music still get access to the content of their favorite artists through internet (albeit illegal !!). By making content free/subsidized for their fans, the artists, who till date have ben denied their equitable share of profits, still end up making handsome money at the expense of big music labels. Some would say that an NIN or a Radiohead may have the guts to do that with their loyal fanbase, but for any new artist, a music company is still the only resort to reach music lovers. This is a genuine concern but once this landscape completely emerges one has to agree that an album of a new entrant will never sell at $20 when a more popular artist sells at a fraction of that price. If the music label has to survive by reducing the prices and offering more value then so be it. Reduced prices, wider audience and a satisfied fan base can be the only outcomes of this evolving landscape.