filesharing – Dull Razor

Cox decides it wants to be hated like Comcast, too!

Techdirt and Ars Technica both reported this morning about a new plan unleashed on us poor Cox customers by the corporate talking heads: bandwidth throttling! And not even the innocuous “only when you’re using a lot” style of throttling, like Comcast uses (and got burned for), but the Jack-the-Ripper-style “whenever we feel like and only on certain kinds of traffic we don’t like” kind. The traffic they’ve moved to the “lower-priority” queue (read: throttled) so far includes:

File Access – Specifically FTP – this one makes no sense at all.
Network Storage – Bulk transfers of any kind – even less sense, if that’s possible.
P2P – Bittorrent, Limewire, and friends – because efficient distribution takes second seat to political correctness.
Software Updates – Windows Update and friends – you didn’t need that security patch any time soon, did you?
Usenet – Cox has hated on newsgroups for years. Big suprise here.

Cox was first to implement the three-strikes policy in regards to file sharing accusations, as well as lying about their reasons for doing so, and recieved what I found to be surprisingly minor backlash for it. Perhaps that lackluster response is what is prompting Cox to think they can get away with this relatively unscathed. Thankfully, in the meantime, Google has officially released its Measurement Lab, which aims to offer end users a good way to test their broadband connections and see what they’re really getting. This will offer customers a valuable tool, and give people like me who work in tech support a massive headache when everyone finds out their ISPs are shafting them.

Cox claims to be “your friend in the digital age.” With friends like these, who needs enemies?

Music sharing is not A Bad Thing

Mike Masnick has pretty much been my hero lately, with a string of brilliant posts on alternative revenue models being used by various musicians, all based off the idea that giving your music out for dirt cheap or free and encouraging your fans to share it is A Good Thing. One of the artists he uses as an example, Adam Singer, goes so far as to say that the Creative Commons license is the “ultimate music promotion tool” – something with which I think Jonathan Coulton might agree.

The concept here is that punishing your fans for liking your music and wanting to share it with their friends is incredibly stupid. That seems like an obvious statement to make, but there’s more than one major industry player out there who thinks that this is exactly what the industry SHOULD be doing – which is why many bands, big and small, old and new, are abandoning “the industry” as it stands.

There are a handful of basic ideas being tossed around on his blog that have been used, in various ways and degrees, by several different musicians. Note that each of them revolves around the idea that the music is free and that sharing is good. I’ve categorized them as follows:

“Just pay me whatever you think it’s worth.” This is the strategy used to great success most famously by Radiohead and Jonathan Coulton but also numerous smaller acts. This seems to work best for artists who already have a fan base, but has worked very well for smaller acts as well.
“The music is free, but please buy my merchandise!” This strategy seeks to build a fan base with free music who will then in turn buy “special edition” CDs, t-shirts, and concert tickets. This strategy is tailored for the smaller artist because it seeks first to build your fan base, and second to make a profit, but would work for an artist of any size as the profits will only increase as your fan base does. The risk here comes with the fact that you have to execute it well: your merchandise has to be worth the separate purchase. Don’t insult your fans with CafePress t-shirts. Adam Singer talks about this method at his blog.
“If I get enough money in donations to cover my costs, I will release a free album.” This method carries almost no risk, because if you don’t get enough money, then you don’t make the album, and you don’t lose anything in the process (at least monetarily). The tradeoff is that your fan base who is doing the donating needs to be confident that you will produce something worth their investment, so you have to have that base before you can attempt this method. This works not just for music, but almost any medium: books, digital art, whatever. Once the album/ebook/whatever has been released, it is free to share and will build your fan base who can then purchase your other stuff (option 2) or give you more money next time you want to solicit donations for your work. Marillion succeeded using this model.
“The music is free, but if you buy XYZ too, you’ll get more that you wouldn’t otherwise!” This one starts with a smaller body of work that is free to share, but rewards the buyer with extra stuff they wouldn’t get otherwise. This can take many forms – Jill Sobule had different levels you could buy at that included perks such as getting the album before its release date, a free concert at your home, or even performing on the next album. Trent Reznor offered the first CD of “Ghosts” for free, with additional content costing extra, and options to buy higher-quality recordings, vinyl record, DVDs, books of accompanying art, or autographed merchandise at different price points. This is very similar to numbers 2 and 3, but has a different enough focus that I gave it its own number.

Using these methods and combinations of them gives artists many new ways to find fans and make money while connecting with those fans on a much more personal level than they might otherwise. As Masnick said, you can’t ask your fans for favors when you’re suing them. In addition, it automatically solves the “problem” of piracy – you can’t pirate something that’s already being given out freely! Make the economics of scarcity your friend, not your enemy, and watch things just work.

The internet is killing music sales (by increasing them)

Music sales went up another 10.5% in 2008, largely due to over one billion (yeah, with a “B”) digital song sales. There were 428 million full album sales as well, but as the online market explodes (32% increase from last year) physical CD sales drop accordingly (down 14%). This is not surprising to anyone who can look at this rationally. If you have a potential market of 100 people and they can only buy in one format, then the people who will buy will all buy that format. So let’s say you sold 60 CD’s to those people. The next year you release a second album, and allow the new one to be purchased online as well. This time, 66 albums are sold, 40 hard copies and 26 digital.

Are sales down? No. You sold six more albums, and increased your sales over the last album’s by 10 percent. You should be happy about that, not complaining that you sold twenty less CD’s. In fact, if anything, you would be happier, because you have eliminated the cost of creating those CD’s from the process, which gives you a higher net profit from an album sale (and/or allows you to lower the price, thus potentially attracting more customers).

So when you hear the big labels, the RIAA, and the anti-digital music loons claiming that piracy and online music distribution in general is killing music sales and hurting artists, remember that this screwed-up logic is what they’re using. Also remember that countless artists have spoken out against the harmful (and ineffective) tactics used by the RIAA to “combat piracy,” culminating in the creation of a copyright czar cabinet post under the new Obama adminstration, some artists going to far as to drop their labels entirely and finding great success in doing so. Nine Inch Nails and Radiohead both had incredible and well-documented success with their independent online album releases, and many other bands have dropped their larger labels to found independent labels for artists seeking to leave the stifling, anti-consumer attitude propagated by the RIAA.

In addition to the obvious benefits of online music sales over traditional music sales, what has traditionally been described as “piracy” by lawyers and the media is often one of the artist’s best tools to spread his music around and reach ears he would otherwise be unable to. The classic success story here is Jonathan Coulton, who came out of nowhere and distributed his music via his website (with the option to pay, but not forcing you to) and now makes more money off his music than he ever did as a software engineer. I’ll leave you with a 2001 statement from David Draiman, lead singer of Disturbed, that kind of sums up why even the typical examples of piracy given by the RIAA and its ilk are not quite what they seem:

[I’m] Very positive about the internet, Napster. I think it’s a tremendous tool for reaching many more people than we ever could without it. When you release music you want it to be heard by people. Artists really want to have their music heard. They want to have their creation heard by people. Nothing is going to do that better than Napster. I can’t tell you how many kids have come up to me and said, ‘I downloaded a couple of tunes off Napster and I went out and bought the album.’ Or they say, ‘I want to come see you play.’ I don’t really make money off of record sales anyway.

And again in 2003, on the series of lawsuits brought against file sharers:

This is not rocket science. Instead of spending all this money litigating against kids who are the people they’re trying to sell things to in the first place, they have to learn how to effectively use the Internet. For the artists, my ass… I didn’t ask them to protect me, and I don’t want their protection.

The internet as a method for music distribution is (still) exploding. It’s time to jump on the train, not hold on to the boarding station for dear life.