Why (and how) will we pay for music?

I was adding links to the roundup of mesh08 coverage that I’ve been keeping both on the mesh blog and also here, and I came across a post by Chris Clarke that mentioned some of his impressions of mesh, and also described how he asked a question during my keynote conversation with Ethan Kaplan of Warner Brothers Records, but didn’t really get an answer. The question was “Why should I ever pay for music again?” Ethan responded in a comment at Chris’s blog, but also posted it on his own blog. Here are a few excerpts:

“You pay for music regardless of whether or not you actively consume it. That’s what sync/performance/publishing licensing is for.

The challenge is not “how will you pay for music again” but more “how do we as a producer produce something worth consuming.”

Anyhow, your question “Why should I ever pay for music again?” is not so simply answered. Why should you? Hopefully because you find something worth paying for.

Our challenge… is to figure out the theories, rationality, psychological reasons and such as to what the transition into a homogenized and representation-dependent, decentered and binary-data media system does to modes of consumption.”

As Ethan points out, these kinds of concerns aren’t solely the province of the music business. Other content-related industries are struggling with the same issues: if content can flow in dozens of different ways, and in many cases is effectively free, how do content producers generate something meaningful that people will be willing to pay for?

8 thoughts on “Why (and how) will we pay for music?

  1. Terry McBride of Nettwerk Music has some interesting thoughts on crowdsourcing music distribution and sales. I can`t find his video, but he basically says that people would be willing to pay $0.25 for a song through recommendation from their friends (via mobile or online). The recommender would get maybe $0.05 for the sale.

    He figures $0.25 is the magic number where customers feel it`s not worth the guilt illegally downloading the song or worth the time spend looking for it.

    • That's an interesting theory. Of course, with some of my friends, I
      would pay 25 cents or more *not* to receive songs that they recommend
      🙂 I think Ethan's idea is more that artists use their music to
      create demand for other things — special events, merchandise, a
      closer relationship of some kind, etc.

      • I would agree with Ethan, I think there's plenty of money to make by doing it that way.

        It's the record companies that lose out because they take a nice sum from the album sales.

  2. Music will be fine – yes it may involve less huge profits for the labels and become more a cottage industry, but I think it'll be positive for creativity. I reckon there will be big money in giving vistiors to music concerts mp3's of the concert they have just listened too – the skill of the engineer to provide an almost instant recording within 30 mins of a performance finishing. Add to this last.fm and other web radio and we have never before had the ability to find the music we really like so we can actually go to the concerts. And audiofiles will always prefer CDs to mp3's.

    • I think you're right, Mark. At the mesh conference, Mike Masnick
      pointed out that research shows people are listening to more music,
      and almost every part of the music industry is growing — except for
      the part that involves selling little plastic discs.

    • The future Mark describes sounds pretty likely to me. The music is free, and DRM is dead, so where do the big labels plan on making money? Concerts? Merchandise? Casual music consumers don't go for that sort of stuff. Like I said at mesh, I'm only a die-hard fan of a few artists, and I don't believe that a few die-hard fans of each artist is going to support the industry as it is.

      • True enough, Chris. I think that's why the industry is so enamored
        with the gigantic blockbuster acts like Hannah Montana, and also the
        “360 degree” deals that give them a stake in everything an artist
        does.

  3. I would agree with Ethan, I think there's plenty of money to make by doing it that way.

    It's the record companies that lose out because they take a nice sum from the album sales.

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