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    This is the personal blog of Simon Kendrick and covers my interests in media, technology and popular culture. All opinions expressed are my own and may not be representative of past or present employers
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Giving it away for free to earn your keep

free
Photo by http://www.flickr.com/photos/vanessao/

Brian at Copyblogger rhetorically asked if one could make a living from publishing white papers for free, mass consumption online. His answer was (of course) yes, and he made reference to a former colleague who makes $300,000 a year from doing so. As one would expect, his tips for success are freely available from here.

This business model is described as content marketing. Earlier this week, Joe of Junta 42 once again practiced as he preached by releasing an updated version of his 42 top Content Marketing blogs. A fantastic resource linking to some great blogs; the original release was how I heard about his blog. And since then I have become an avid subscriber (if not paying customer).

One blog currently not on there is Jonny Bentwood’s Technobabble2.0. He has just followed up his white paper on social media with an analysis of the quality of other analysts’ Twitter/microblogging usage. Go check it out.

So, is this the future of content creation? The free distribution online sets the brand up and creates buzz, and a (possibly supplementary) living can be earned from speaking engagements and corporate training sessions.

The basic content is therefore free, with the revenue coming from incremental business based around that – books (special editions) and face-to-face sessions (live events). Now where have I heard this before?

Since some critics argue that what works for Radiohead and Nine Inch Nails (the link takes you to their brand new free album – The Slip) doesn’t work for Joe Average, is this a model that all bloggers can aspire to?

My answer is yes; if the quality, the luck and the will to succeed are there. Like I hadn’t heard of Joe before someone linked to his blog, I hadn’t heard of Black Kids before I saw a Pitchfork article and a link to their free EP. And now they’re on Universal. Ticket sales and merchandising, rather than CD sales, is how they will be getting paid.

And as a final point, it is interesting to note that the material I linked to from Joe and Jonny takes publicly available knowledge, adds some special sauce, et voilá. An original, insightful piece of work. Remixing, in other words.

sk

Measuring the success of free music

As an addendum to my prior post on free music, Kevin Kelly has posited a “true fan” model. He argues that having a core following of around 1,000 people per artist would bring in enough revenues to sustain a career. Nine Inch Nails appear to have managed this – their run of 2,500 deluxe ($300!) editions of their latest release sold out straight away, and John Otway has sustained a career this way. Of course, this requires either your fans to grow up with you, or a constant stream of new fans to replace disillusioned ones. NIN’s early music was quite angsty – will their fanbase remain loyal as they enter maturity? The evidence so far suggests they will.

I’m interested in how one can make this a robust business model. In TV land, there is increasing talk about moving from eyeballs to engagement. It is no longer enough for someone to have a TV programme switched on – they need to be attentive, to be interested, to interact. But measuring this is tricky. With music, as the methods of distribution increase, it becomes more difficult to know exactly who owns, or who listens to your music. What proportion of tracks owned by music lovers came into possession through legal (and measurable) methods? And how does ownership intersect with passive listening – through TV, radio, Myspace and so on.

Could musical success be measured by engagement? If the Seinfeld Curve is borne out, the record labels (or their successors) will need greater certainty in predicting ticket sales, not to mention advertising on artist websites and other revenue streams. A minimum number of units sold will be meaningless. Some artists (I can’t remember their names) are now getting people to pay up-front for tours or CDs. If enough people sign up, it happens. If not, the transaction won’t take place. This may work in the odd case but is too rigid to be sustainable for the majority of the market. A model of engagement therefore needs to be found.

A lot of data is already available on music consumption and engagement, but it is proprietary. Could iTunes or Last.fm become an industry currency? If they asked all of their users whether they would be willing to share their data with the music industry, a lot of people would refuse. Understandably so, given the amount of pirated and leaked music available. But if incentives were offered, I believe a a reasonable number would. Interested users could fill in an additional form for demographic information, and this can then be calibrated to the wider audience for greater accuracy. If this became an industry standard, there would be no competitive advantage. The more parties that sign up, the cheaper subscriptions could be and the lower the barrier to entry

Some of the possibilities of data analysis this could offer include:

  • Knowing number of plays, not just number of units shifted
  • Finding out the top rated tracks for each artist
  • Seeing how quickly new tracks are forgotten about and never played again
  • Profiling the most avid fans
  • Segmenting these fans by geography to plan tours
  • Getting similar artists to join the tour
  • Measuring the speed at which new music travels globally
  • Tracking and predicting popularity of different genres
  • Last.fm event attendance can be correlated to music libraries
  • Using the messageboards to gather information on buzz
  • Surveys can be used to gather opinions to supplement the raw data

I realise this is just a pie-in-the-sky idea and that there are many barriers to this actually being implemented. But if music does become the loss leader to the experience’s premium product, then there is no point in restricting the distribution to official methods. If the music can be democratized, can the information?

sk

Nine Inch Nails and free music

Free music

Photo by http://www.flickr.com/photos/mightymightymatze

As the world and his blog is now aware, the latest Nine Inch Nails album has been released over the Internet, in a variety of formats and prices. Rather pointedly, Trent Reznor remarked, “I’m very pleased with the result and the ability to present it directly to you without interference”. However, the most interesting thing about this (press) release is the following quote:

“Now that we’re no longer constrained by a record label, we’ve decided to personally upload Ghosts I, the first of the four volumes, to various torrent sites because we believe BitTorrent is a revolutionary digital distribution method.”

Furthermore, the album is being released under a Creative Commons licence that permits sharing. So, while the music has been made available for purchase both digitally and physically, the band are essentially saying that it is OK to distribute for free. They are not concerned with revenues or royalties on the release.

This leads back to a couple of prescient posts from some very authoritative figures. Firstly, Chris Anderson started the PR campaign for his latest book with a preview in Wired entitled “Free! Why $0.00 Is the Future of Business”. He highlights how Prince was able to release his album for free (or the price of a newspaper, with a free Mail on Sunday bundled in) by making money from live performances. That he could have sold out the dates without the CD is seemingly incidental. I was at one of the O2 gigs and while the performance was fantastic, the CD has had one listen.

The free hypothesis ties in with Seth Godin‘s Seinfeld curve (the second link is a must read):

If you like Jerry Seinfeld you can watch him on television, for free, in any city in the world two or three times a day. Or, you could pay $200 to go see him in Vegas. But there is no $4 option for Jerry Seinfeld. This is death. You can’t make any money in here. Because if you’re not scarce I’m not going to pay for it because I can get if for free. And one of the realities that the music industry is going to have to accept is this curve now exists for you. That for everybody under eighteen years old, it’s either free or it’s something I really want and I’m willing to pay for it. There is nothing in the center-it’s going away really fast.

As Seth points out, digital makes scarcity obsolete. There are no longer finite units – when I lend or share music, I still have my copy. With infinite supply, the price gravitates towards zero.

The traditional business model of the record label is in ruins. Seth suggests that we are moving from brand/artist management to tribal management:

That the next model is to say, what you do for a living is manage a tribe…many tribes…silos of tribes. That your job is to make the people in that tribe delighted to know each other and trust you to go find music for them

I think the Seinfeld curve is genius but, through my interpretation at least, tribal management is flawed. It is saying that niches need to be identified – almost isolated – while an editor of sorts suggest music for the tribe to select. Evidently people can be in multiple tribes, but a tribe – traditionally based on kinship – is the primary social identification. There is a hierarchy. Musical influences don’t conform to this. And if music is free at the point of entry, why should people choose bundles?

Furthermore, musical movements shift faster than general societal trends (where is crunk these days?). Newspaper editors can predict and adapt to shifts, but in this sphere it would be far more difficult. A Nick Denton type mogul could emerge and preside over an ever-shifting portfolio of niche movements. But can this trust last? Gawker hasn’t had the smoothest of rides recently.

I am not nearly as clever or insightful as Seth, and I do not have an alternative answer. What is clear is that the Internet is brilliant for musicians to disseminate their creations virally. More people are listening to more music through more methods than ever before.

And for businesses? In a free economy, one needs a combination of creativity, luck and finance to be heard over the cacophony. And with less control over distribution, it becomes more difficult to judge the success of a release, to measure a return on investment, and to forecast future finances. Dull perhaps, but integral to a healthy business. Guy Hands must be in his worst nightmare. However, this can be where the Seinfeld Curve comes in. The live arena offers a unique, finite experience where supply and price can be controlled. So will CDs become the loss leaders – the razors to the blades?

From a research perspective, the future is fascinating. With no accurate measurements, how can we assess succcess and forecast for the future? As well as music, it raises fascinating questions over the future of TV. I will return to this topic later in the week with a few further thoughts.

sk