DISQUS

DISQUS Hello! The Equity Kicker is using DISQUS, a powerful comment system, to manage its comments. Learn more.

Community Page

The Equity Kicker

Nic Brisbourne’s view from London on venture capital and exploiting change in technology and media
Jump to original thread »
Author

UK band makes money because of piracy

Started by brisbourne · 6 months ago

I seem to writing a lot about music and ‘free as a business model’ at the moment, and a great post on Techdirt this morning has me at it again. This is such a great description of why bands can benefit from having their music freely available that I’m going to ... Continue reading »

6 comments

  • Dino Joannides

    10 months ago

    Nic spot on !

    On another subject can you think of a way for Chelsea to accomodate all of the following in the starting 11 : Deco , Ballack , Lampard , Joe Cole , Essien , Robinho and Drogba ? ( we need at least 1 golakeeper and 3 defenders)
    reply
  • Dino Joannides

    10 months ago

    reply
  • alan p

    10 months ago

    Nic, in every simulation we've done of market growth, "Free" tends to work well as a market growth technique. However, these same simulations show the strategy has two limits:

    (i) If everything is free, it is hard for good stuff to signal its quality vs bad, and you risk bad stuff driving out good

    (ii) Free is not in fact free, its offset economics (ie someone else is paying for lunch), and at some point the subsidy stops if there is no future prospect of making money.

    Music is an interesting example, in that one can always point to a single band that creates a buzz for itself, but what is more useful is to look at the total potential of the overall market - ie do we believe that there is as much money in T shirts and concerts as there is in selling music.

    There is no doubt that music fans (concert goers etc) spend a lot more than music consumers, but there is a limit to the number of fans and the opportunities for them to spend money. And this other stuff is already counted in the music market, so the it does not grow from 0 to replace bought music if it all goes to free.

    Also, if you just add up the spend/band between old bands and new ones, and if you assume spend on PR impacts popularity (and if you don't...hmm, thats one industry gone :D )and put some assumption of "reputation half life", you'll find that those that are rich will carry on getting rich for quite a while

    Thus our analysis is that the overall music market shrinks in a "free music" scenario, and the market for new music shrinks more.

    Hmm..i can feel another "FreeConomic" blog post coming on :)
    reply
  • nic

    10 months ago

    Alan - not sure why it is that money spent is important to signal popularity. There are other measures - such as how often a track is streamed or downloaded, or played on the radio to pick one that has been used for some time.
    reply
  • alan p

    10 months ago

    My point was more that the more money that is spent on PR, the more PR "potential energy" - aka mindshare - there is for that band vs others thaty are trying to compete.

    By and large existing acts - "incumbents" - have far greater mindshare, which a new act has to overcome.

    If all goes to free, the biz case for funding the new act is far worse as the ROI drops off vs the ongoing momentum of the old (sunk cost) PR spend.

    Essentially its a specific case of a startup trying to enter a market with a free service when the incumbent will also offer a free service plus back it up with a huge brand recognition)
    reply
  • Cirurgia Plastica

    5 months ago

    People in the musci industry are fighting on the wrong side. Instead of fighting downloads on the net, they should encourage it, as the bands become more popular and earn more money from shows. People that really likes the bands would still buy their cds.
    reply

Add New Comment

Returning? Login