Free Is an Age-Old Model, And, As Neil Young Says: "Piracy Is The New Radio"


"I look at Internet as the new radio. Piracy is the new radio. That's how music gets around."

Those words came from none other than elder statesman of rock Neil Young, who spoke about music and technology at the AllThingsD Conference on Tuesday. Many would expect a rock grandpa like Young to be bellyaching about how access to free music online is destroying his industry because that's all people of his ilk have been doing. But Young is doing what everyone in his industry should've been doing years ago--retrofitting the old model for the new medium, just like they did for the MTV era.

"Allowing people to discover music is a powerful thing," says Mike McGuire, a media analyst for Gartner Research with an interest in music and retail. "If you let people hear it a few times, they'll pay for it."

Exactly. I remember buying Guns N' Roses Appetite for Destruction in 1988. 10 or 20 million other people all bought it for the same reason--we either heard "Welcome to the Jungle" on the radio or saw the video on MTV. Before I bought my copy on cassette, I watched that video about a dozen times on MTV--and I watched it for free! Apparently the Internet clouded the memories of many label execs because the entire recording industry was built on the concept of exposing people to songs repeatedly and for free via radio or TV. The idea was to get us hooked like junkies so we'd be forced to buy a copy to have at our disposal any time we wanted. But the industry, as we know, has remained oddly stubborn about the Internet.

"In the legal framework of the music industry, there is no such thing as a free listen," says Seattle-based John Beezer, noting how labels are always stressing that every time we've heard a song for free, it has cost them money--MTV videos and radio blitzes were expensive investments that offered few guarantees. "I look at the music industry and it's like it's on some weird lockdown," Beezer continues. "It's like their ignorant of how the old model worked."

The theory is that free downloads equal no sales. But our own Sub Pop has been giving away free downloads for years and its been working. In fact, the label's top downloaded songs are all from some of their biggest sellers--Fleet Foxes, Band of Horses, and The Postal Service. That is the old model for the new era--no guarantees, just free exposure in hopes of potential sales.

The industry's stubbornness, however, has left the arena wide open for innovation (and missed profits for labels). In fact, ten years ago, Beezer pioneered the model that is now working wonders for Bandcamp--the now-defunct WeedShare. An early attempt at monetizing file sharing, WeedShare was a legitimate platform on which artists uploaded their songs and made them available to potential fans (three free streams or own the song for a low price of about $1.25). WeedShare encouraged customers to send the file to friends. But in order to hear the song, the friends had to pay and WeedShare gave the file-sharer a 20-percent kickback as an incentive.

WeedShare was hard to keep afloat financially. But Beezer says timing and limited technology were factors. Bandcamp may have arrived at the right moment and smoothed out those glitches, but perhaps its most important feature is that each song uploaded by an artist is available for non-stop streaming. At Bandcamp, you can listen to hours and hours of music--whole albums even--entirely for free as often as you want. And somehow, despite giving music away, the four-year old Bandcamp still managed to attract over two million paying customers and generate some $14 million is sales. If Bandcamp--and other services like Spotify--sound like radio and MTV for the Internet-era, that's because they are.

Of course, nobody can claim to have won the battle. For now, the existence of services like Bandcamp and Spotify are all that matters because they provide a viable option that might work. That's what the music business should have been doing since 1995--figuring out how to cater to a consumer base as it moves en mass to the web.

"It was a missed opportunity for (major labels)," says McGuire. "All people have wanted is an easy and legitimate way to buy music online but the industry didn't give it to them. People will pay for convenience and reliability."

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