Free Downloading Music Is The Way Forward

In one sense, last week’s online release of In Rainbows was nothing new – after all, thousands of artists have released albums for download before this. The essential difference, however, is in the magnitude of money and hype involved – Radiohead are a major act previously signed to a major label and have sold millions of records worldwide. Even if sales of the latest album are only a tiny fraction of previous releases, they stand to make far more money from this one – simply because they control the entire production and distribution process. So what are the implications for the music industry in the face of this breakaway?

Free Downloading? Music As A Loss Leader

In fact, it seems that the future of music may be something of a return to its past. Digital downloads are the media of choice for many music consumers, and, in terms of legal music downloading at least, the preferred format is the single rather than the album. People tend to buy songs online, rather than buying an entire album – whereas in the age of the CD, they may have been forced to buy an entire album just to get the three or four songs on it that they actually like. So, just as in the heyday of vinyl, the single may become the dominant player in the music market.

Stephen Dubner posted an interesting article in the NY Times about this very issue, where he garnered opinions from some of the cognoscenti of the music business as to what its future might be. Professor Strumpf of the University of Kansas maintains that despite declining CD sales, the industry is in good shape. He cites outside investment as an indicator, given that a private equity firm recently completed a £3 billion takeover of EMI, and an investment group purchased the Warner Music Group in 2004 for $2.6 billion. These bodies know their market, and they obviously believe that they can make money here.

Fredric Dannen confronts the issue of convenience as the primary driver of the market, and I posited a similar point of view in an earlier post on fidelity versus convenience. The music industry has repeatedly resisted formats based on their inferior quality, but which gained widespread acceptance due to superior usability. Dannen provides this example:

When the long-playing record (LP) format was introduced by Columbia Records back in the late 1940s, the industry as a whole resisted it, and many predicted it would never take off because 78s sounded better. Without question, early LPs did not sound nearly as good as 78s. But given the choice of listening to all of Beethoven’s Ninth Symphony on two sides of one record versus sixteen sides of eight records, the consumer opted for convenience and simplicity (not to mention less shelf space).

Music Technology Should Be Easy

A similar watershed occurred with the introduction of the cassette tape, and more recently with the proliferation of portable mp3 players. Do mp3 players sound better than CD? Of course not. But they are far more convenient. Digital is certainly the future – how it is implemented will determine who survives in the supply chain. Convenience is what consumers will choose once again – which means that DRM is not an option. So what about free downloading? Music available for free is certainly more convenient than having to pay for it, but the artists need to be funded. As most artists won’t have the inclination to produce, promote and distribute their own work, there will still be room for industry involvement, but it will probably develop into more of a partnership than the monopolistic exploitation of yesteryear. It seems a reasonable option to offer free downloading music as a promotional avenue for new artists, and once demand is high then a convenient and reasonably priced monetisation model could be successfully applied.