April 09, 2007

Apple supports proper downloadable music

Thank God, one of the major corporates has finally figured out that there is a profit to be made from providing proper access to digital versions of recorded music. Apple and EMI have agreed to provide a premium iTunes service which lets you pay $1.29 USD for a high-quality, DRM-free version of a song. It is even Fairplay free (Apple's rights-restriction technology).

I'm sure you've all heard this before, but I'm going to have an initial stab at the free music format debate anyway. This isn't thoroughly thought through, so I'd appreciate your feedback, and please consider that this is unlikely to be my final position on the matter.

I definitely acknowledge that giving copies of digital music to friends (who then do the same thing) is a hole in the balloon of income for recorded music. Though I think that that reflects a fundamental shift in the underlying nature of the economics of recorded music. It used to be that distribution was expensive and controllable. It is now dirt cheap and tends towards the anarchic. It is (in economic-speak) becoming a public good, that is, a thing which anyone can consume, instead of just the owner. Public goods are:

  • non-rival (that is, someone consuming a copy of a song doesn't preclude another person from consuming it (unless a distribution site crashes under load), and

  • non-excludable (that is, you can't stop people using it).

The classic problem with public goods (traditional examples include clean air and street lights) is underprovision. That is, everyone will wait for someone else to provide them (at which point they can consume them for free).

However, I honestly can't see how we'll end up with not enough recorded music being produced.

Firstly, there are elements of the music production process which are entirely excludable and rival, namely making the music in the first place, having the music connect with the audience, and having a decent copy of your music you can listen to without having to play it. This value alone is enough to get hundreds of wellingtonians to be part time musicians, in some cases producing pretty decent music. I've always been bit confused by the recording companies' attempts to stop the music getting to the audience. For so many musicians that was the point of becoming a musician in the first place.

Secondly, Impatience. Most fannish behaviour tends to be (from my distant observations) rather impulsive. If there is a thing you can purchase (and it is within someone's budget limits) they'll buy it. So CDs get purchased on the high at the end of a good gig, because you can have it then and there, without waiting to go home and hope someone else has purchased it and made it available for download.

Thirdly, add-on goods which are excludable and rival goods: tickets to performances, official (signed) copies of CDs, T-shirts, stickers, backstage passes, etc.

Fourthly, patronage. Okay, this is an archaic word, but it basically means that some people will give money to someone to help them to continue to produce something they like. Namely, some people will pay full price for the CD despite a bunch of other free or low-cost options simply because they know it is a useful way to support the band. Patronage currently keeps the Apache Foundation bubbling along at a Microsoft competing rate. The best way to support this cultural - that is, it is cooler to have an official version rather than a free one. This is produced at least partly by having a close relationship between the band and the fans.

Fifthly, democratisation. This is a bad word to use, but I'm running out of good ones. Basically, this covers the shift in recording costs, and record company power. It used to be that recording was so expensive, that it took a company to pay for it (and they were repaid from album sales). Often the band underwrote the cost of the recording anyway, which resulted in many almost-made-it bands being indebted to the distribution company they'd signed to. Nice. The companies distorted the market by promoting music which had a wide audience, and by trying to make supergroups (which could make them vast profits). As they had a stranglehold on the recording and distribution of recorded music, they could do this. What has happened in the last 10 years is the recording tech has become much more affordable (you can produce decent recordings pretty cheap now) and the distribution channel of the internet has become pretty cheap too (though making the connection to people who actually want your music is still a difficulty). This factor makes it easier to produce recorded music, which suggests an increase in supply.

Lastly, better access to a wider range of music. This is pretty simple, I'm more likely to have enough music I like, if I have a world full of recorded music to look through. This means that the world doesn't have to produce as much music in order to meet everyone's recorded music needs, so the chances of not enough music being produced (which was the economic concern which lead me into this rant) are greatly reduced.

So, in other words, I fully expect it to be much harder to make a good living as a musician, but a much happier bunch of music listeners regardless. And I'd expect it to be *very* difficult to become an overpaid recording company executive (which, strangely, I don't have a problem with).

Posted by carla at April 9, 2007 09:21 AM
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