Update: It appears that Radiohead has denied the figures that comScore has been reporting.
Over time I think Web 2.0 has started to become more and more about free content and less about ugly pixel icons. Sure, Web 2.0 is all about the Semantic web and all of the social aspects of the web that are changing how we use it, but I think that the social aspects key role is in disseminating this huge amount of free information. It is this huge quantity of free information that necessitates new methods through which we can explore it. By creating this new social web we are using each other as filters through which we can attain this information without creating information overload (some more successfully than others). The idea is that if someone else likes it, and they like the same things as I do, then I must like it as well. And it works surprisingly well in most cases.
With all of this free information though there is a backlash that has been forming for quite some time. People are becoming less and less willing to pay for content. Whether it be the New York Times, our favorite artist's music, or a movie that we want to watch, it is becoming harder and harder to convince people to fork over their hard earned dollars. Recently, as you have probably heard, Radiohead recently released their newest album (In Rainbows) on their site for free. Well, not entirely for free, but you had the option to pay any amount for it. Even zero. So, in effect, Radiohead placed the value of their work in the hands of the users. But was this a wise decision?
Radiohead had to realize that they were going to have a huge number of users download the album for free, but maybe they were counting on having enough fans put some value in their work to pay for it (or at least feel guilty about paying nothing and fork over a few bucks) so that they would make a larger profit than they would have releasing it in a traditional manner. From what I understand most artists make so little money off of their music that selling it direct like this wouldn't take very much to make more profit than they would releasing through a label.
Over at Breitbart they have an article about how 62% of people who downloaded Radiohead's new album didn't pay a penny for it. And this is by no means all of the users that have downloaded the album, because as Andy Greenberg over at Forbes point out, it appears that on the first day of the albums release there was about 240,000 downloads of it off of BitTorrent sites.
So, why would people download something off of a BitTorrent site that is free? Well, there are a few explanations…
1) They go to BitTorrent every day and they aren't sitting around watching Radiohead news. They might not know the album is free, they just see it on the list and download it.
2) They are addicted and they just download everything they see on BitTorrent.
3) Radiohead's site required you to register in order to download the album, and they felt that this was a bit too much.
4) They didn't want to pay for the album, and had no problem with registering, but they were embarassed by the thought of punching zero into the amount box on Radiohead's site.
So, assuming option 3, if a user downloaded a song off BitTorrent that the artist was giving away for free, then clearly this user values the work so little that even registering at the artist's site was too much cost for them. So, does this mean that Radiohead is devaluing their own work? I think that Scott Adam's said it very well in an article for the Wall Street Journal.
"A few years ago I tried an experiment where I put the entire text of my book, "God's Debris," on the Internet for free, after sales of the hard copy and its sequel, "The Religion War" slowed. My hope was that the people who liked the free e-book would buy the sequel. According to my fan mail, people loved the free book. I know they loved it because they emailed to ask when the sequel would also be available for free. For readers of my non-Dilbert books, I inadvertently set the market value for my work at zero. Oops."
So, while Radiohead's free release drew a huge amount of media attention (and will probably net them a tidy profit for this album), will it work in the long run? Or will it continue to degrade the market value of their work? If every album was available in the same manner, would people just keep paying less and less until eventually they would just start thinking of albums as free and stop paying completely? Maybe I am cynical. I know that I am one of the few people that I know that actually makes an attempt to obtain every movie I watch (Netflix), every song I listen to (Zune marketplace, and no I don't own a Zune player, the marketplace is much better than Napster and I like the subscription music stuff), and every program I use legitimately.
So, is this how it has to be, or is there another side to this argument? After all, according to news sources, the New York Times didn't drop its pay wall because of declining subscribers, they dropped it because they thought that they could make *more* money by letting in everyone. Advertising can become one of the ways in which publishers can create content, while still being paid for what they do. But where does this leave the people who create books and music? These mediums are quite often consumed offline and therefore advertising might not be a great option. How many people would buy an album if they had to listen to ads that were embedded in it? In fact, the downloads off BitTorrent for the advertisement stripped version would probably exceed the downloads of the ad embedded version.
So, what is a poor starving artist to do? Give it away, of course! This kind of talk only hurts the big guys, the people who already have massive amounts of value soaked up in their content. Just look at Cory Doctorow (holy crap I wish I had my own Wikipedia article) as an example. He is a science fiction author (and just happens to be co-editor of Boing Boing) who has been giving his books away since he started writing. In an article with Forbes, he says…
"When my first novel, Down and Out in the Magic Kingdom, was published by Tor Books in January 2003, I also put the entire electronic text of the novel on the Internet under a Creative Commons License that encouraged my readers to copy it far and wide. Within a day, there were 30,000 downloads from my site (and those downloaders were in turn free to make more copies). Three years and six printings later, more than 700,000 copies of the book have been downloaded from my site. The book's been translated into more languages than I can keep track of, key concepts from it have been adopted for software projects and there are two competing fan audio adaptations online.
Most people who download the book don't end up buying it, but they wouldn’t have bought it in any event, so I haven’t lost any sales, I’ve just won an audience. A tiny minority of downloaders treat the free e-book as a substitute for the printed book–those are the lost sales. But a much larger minority treat the e-book as an enticement to buy the printed book. They're gained sales. As long as gained sales outnumber lost sales, I'm ahead of the game. After all, distributing nearly a million copies of my book has cost me nothing."
So for him, as a small and relatively unknown writer he sees the free downloads and sharing as a way for him to become better known in the community and therefore leads to more sales for him. It is a similar stance that Tim O'Reilly took when he wrote the article Piracy is Progressive Taxation. He said…
"Obscurity is a far greater threat to authors and creative artists than piracy."
So, how is all of this going to shake out? Well, only time will tell. But in my opinion there will always be the small struggling artist who would rather have his work stolen and shared than to have it trapped in a box for no one to experience it.
And on that note I will leave you with another quote to ponder from Tim O'Reilly's essay on Piracy:
"File sharing networks don't threaten book, music, or film publishing. They threaten existing publishers."
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