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IS FREE WHERE THE MONEY IS?

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He opens the book with an anecdote about how the Monty Python actors responded to piracy by putting high quality videos on-line for free, in return for which they got to sell a lot of their videos on Amazon as word of mouth sparked interest. He also points to the fact that Linux is free, many of the Google services are free and Twitter is free.

Needless to say, the word “paradox”, never far from the vocabulary of the vacuously self-promoting American when in the vicinity of anything complex, is flogged to within an inch of its life.

“Therein lies the paradox of Free: people are making lots of money charging nothing. Not nothing for everything, but nothing for enough that we have essentially created an economy as big as a good sized country for around the price of $0.00.”

It is not, sadly, a paradox. A paradox is a dialectic that cannot be resolved whose purpose is to hint at the mysterious, that which is beyond conventional thinking. At best, “Free” is a contradiction, and it is not really that. It is simply people giving some things away for nothing in order to charge handsomely for something else.

But Anderson does highlight a business conundrum that is of great interest for musicians. When there is over supply of one thing – and recorded music is oversupplied; in part because old product and back catalogues do not go away – how can scarcity be created in another, related area so that consumers can be convinced to pay for it?

One area of scarcity is the live performance. The experience of being there is scarce: it can only occur at one time and in one place. Little wonder that musicians with a strong brand and market presence are getting much of their income from playing live.
Another area of scarcity is interaction between the musicians and fans. This cannot be digitized and reproduced endlessly. Fan clubs based on real or imagined “relationships” can have a commercial value. Alliances between musicians and product providers are potentially scarce, and so can be monetized.

Anderson cites the example of Derek Webb, whose Nashville record “Mockingbird” was selling poorly. He persuaded the label, INO, to give the record away for free in return for email addresses, names and zip codes. They were also asked to recommend to five friends via email. He sold 80,000 records, and uses the email list to sell out live shows.
The contradiction (but not paradox) is, to quote Edgar Bronfman, the chairman of Warner Music, that while “the music industry is growing, the record industry is not growing.” Perversely (but not paradoxically) as music takes up more and more time in people’s lives, musicians seem to find it harder to make money.

Identifying what is in surplus and what is scarce is one way to start thinking about the Willy Sutton principle. Willy Sutton was a bank robber in the 1940s who, when captured, was asked why he robbed banks. “Because it is were the money is,” he replied, with elegant, if a little obvious, logic.

Identifying where the money is in a world of oversupplied and endlessly reproducible musical product has become the chief business challenge.

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New Law But Old Story For Pommy Musos

UK deputy Prime Minister, Peter Mandelson is apparently behind a new legislative push to create a “digital Britain”. The scheme proposes to attack piracy to protect the media industry. There is however no mention of guaranteeing fairer treatment for musos (big surprise!)

Poppins Really Ready To Pop This Time

After various rumours over the years it looks like the musical “Mary Poppins” will finally open in Melbourne in July 2010 - good news for pit musos! So far musical producers don’t seem to have been floored by the GFC with several shows on and more planned…fingers crossed!

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