Archives
some of my favourite songs:


 
Data proves that free or shared music files are not lost sales

For some time now I, along with many others in the music industry, have been going on about free music not representing a lost sale, but a gained listener.

Frequently, many music industry professionals suggest that an increase in legitimate sales must necessarily coincide with a commensurate reduction in ‘piracy’, as if this were a fact, yet, the research company BigChampagne has made no such consistent observation in nearly a decade of analyzing online data about music. Rather, it finds that piracy rates follow awareness and interest… The biggest selling albums and songs are nearly always the most widely pirated, regardless of all the ‘anti-piracy’ tactics employed by music companies.

Wired magazine talked about the factual data supporting mega rock band Radiohead‘s decision to allow users to pay what they wanted for their latest album.
All of the torrenting/free downloading of Radiohead’s of In Rainbows album contributed to the album making such a big impression on a listening public that’s bombarded with an ever increasing amount of information. Without it having been so widely traded, BigChampage’s data report says that Radiohead’s album wouldn’t necessarily have shot to the top of the charts and their worldwide tour wouldn’t have been such a smashing success, and I have to agree.

Applying economic principles to digital music, BigChamagne found that “the challenge of achieving popularity (or attention) when the old rules of scarcity (of product) and excludability don’t apply (to information goods) the way they used to, changes the monetization game completely.”

BigChamagne came to the undeniable conclusion that the music industry needs to stop thinking of shared files as lost sales, and start treating them as an aspect of reality upon which they can build part of their businesses.

You can download a detailed paper on this topic here. I haven’t studied it in detail yet so I would love to hear your insights.

Tags: , , , , , ,

2 Responses to “Data proves that free or shared music files are not lost sales”

  1. Martin Says:

    Great post J !

    To be born anew every moment appears to be the ultimate goal.

    No past – no future – just NOW.

    Peace

    M

  2. Wesley Krauss Says:

    Hey Jarome,
    I read the whole article and it was quite interesting,
    Looks like NIN is doing all the right things, and it also looks like this is a very complicated subject to study.

    I finally got it my new site up and (half) running!