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Pay what you want - does it work?

Should we follow Radiohead and give away our music?

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The freedom and egalitarianism that the digital world seemed to promise because of greater ease of production and distribution, is rapidly being revealed as the destruction of many parts of the music business itself. Record majors may be losing their power, but very little is going to anyone else. Instead, the power is residing almost entirely with consumers, and the Radiohead sales reveal what the implications of that are. Not much money, not much of a business.

Processing power, storage, bandwidth and the other enabling technologies of the digital revolution are rapidly losing value. And they are dragging the value of content (music, video, film) down with them. It is not just music. YouTube poses a deadly threat to the traditional television industry, Flickr has revolutionized photography.

The lesson for musicians seems increasingly to be that the digital space is only a place for marketing – and not a very good place at that. The Internet does not possess the promise it once seemed to hold of allowing greater equality, and it is rapidly destroying even those areas of music that once did make money.

From a business perspective, the lesson seems to be: forget the virtual and go back to the corporeal. A live performance by human beings is something that customers can be persuaded to pay for and it is scarce. Just as the “old economy” businesses – mining and food – are starting to outstrip the “new economy” businesses like selling computers, so the old method of delivering music by actually playing it to an actual audience may turn out to be the way of the future. It is revealing that Radiohead – and Prince, who also has given his work away for free – make their money from live performances.

As The Economist comments: “The dominant business model on the internet today is making money by giving things away. Much of that is merely the traditional media model of using free content to build audiences and selling access to them to advertisers. But an increasing amount of it falls into the free-sample model: because it is so cheap to offer digital services online, it doesn’t matter if 99% of your customers are using the free version of your services so long as 1% are paying for the ‘premium version’.”

That’s fine. But what would the “premium version” look like in music?

[Ed: This just in - from December 10th, "In Rainbows" has been withdrawn as a pay-what-you-want download.]

Here is another interesting perspective on this issue.

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US performers chase broadcast cash

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Legislation introduced into the US Congress seeks to achieve royalties for performers when their work is broadcast. The legislation, sponsored by both the Republican and Democrat parties, is the result of lobbying by musicians. It aims to give performers the same rights as publishers and songwriters. If it succeeds, Australia's copyright act may also need to be changed, since our US free trade agreement requires equal copyright treatment. Let's hope they don't settle for the "give it and take it away" performers' copyright we ended up with here.

EU threatens Sino side

The EU is threatening to take China to the WTO over copyright violation. Lengthy talks have yielded little and the EU is allegedly losing patience over flagrant Chinese practices. Whether the EU has the stomach to finish the fight, in light of the sizeable EU-China trade, remains to be seen.

Grammy some lovin'!

Burt Bacharach - magic moments...

Grammies for "Lifetime achievement" were recently announced for Burt Bacharach, The Band, Cab Calloway, Doris Day, Itzhak Perlman, Max Roach and Earl Scruggs. The selection is considerably wider and more eclectic than usually seen in the "major" awards of the gongfest.

Dan Lan Hi-Res Man

Famed producer Daniel Lanois has released the first download in high resolution "CD quality". The event virtually closes the audio quality gap between downloads and discs. How the biz will react remains to be seen.

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