Tuesday, November 2, 2010

Dear Musicians, You Deserve Better

You deserve to be able to make a living creating music. You deserve fairness and respect. You deserve to earn a fair share of the tremendous value you create for everyone. And when I say you, I don't mean just a few mega stars, I mean many serious musicians like you--the more the better.

The good news is that most if not all of your fans agree with me. They also think you deserve a fair share, fairness and respect, and the ability to make a living with your music. Your fans aren't the problem here.

The bad news is that the once-booming business model of selling music has proven to be a very tough business in the age of digital and free. Selling music just doesn't give you your fair share anymore. And it is getting worse every year.

There is a fundamental reason for that: music isn't "scarce" anymore. It is no longer constrained by the physical distribution of records, tapes, or CDs. Digital music is abundant. You can distribute it for free--everyone can. And if you don't, your greatest fans will. People love to share the things they love.

Well, you can try to force your fans to give you your fair share by seeking to maintain some kind of artificial scarcity (copy protection, copyright, lawsuits, scare tactics). Unfortunately, the odds are against you. Technically, artificial scarcity for digital goods is virtually impossible to maintain. Even worse, there is the catch 22: suddenly your fans might perceive you as the one being unfair.

We all learned as a child that sharing is a good thing. It is a core value of our culture. As Clay Shirky pointed out: “We have a word for not sharing if there’s no cost to you: that word is ‘spiteful.’” It is even one of the deadly sins. As a consequence, trying to stop people from sharing is futile. Changing the human nature of sharing is as difficult as fighting the waves of the ocean.

Let's try something different. To get you your fair share, surf the waves. Here is how: give fans what they want the most, and they will pay for it.

Artists: Sign up for Yokudo
That leads us to the question of what your fans really want. If you look at the most successful consumer products and services, there seems to be a common theme: people crave status, attention, and entertainment.

Gucci, Prada, Nike, Puma, Apple, Porsche, Tesla, American Express, Cartier--all of these brands make a lot of money by providing status and attention. Facebook game developers like Zynga do the same with social games like Farmville, and have successfully added entertainment into the mix. The market for attention is a huge opportunity since nearly every product we buy is meant to garner attention.

We truly live in an attention economy. Attention is the most valuable currency and the most precious product.

Music artists have made a lot of money selling attention as well. One obvious example is the concert business. At the same time music sales have faltered over the last ten years, concert revenues have grown substantially. While fans have spent less money for music, they have spent more for the (live) attention of the artists. However, this opportunity appears to have reached its limit, as a spike in the number of tours and ticket prices have collided with the down economy.

There is yet another example of musicians successful leveraging the attention economy: music sales before 2000. Fans were willing to spend a lot of disposable income for a new LP for the nice extras that came with it: status and attention. Being the first in a clique to have the Black Album and share it with friends just felt amazingly good. Your LPs defined who you were. Having them first made you special. Think High Fidelity.

Unfortunately for you, music--as soon as it is digital--comes without status and attention. You have a cool new song? Well, me too. Actually, everyone has it. It is on Youtube, Pandora, last.fm, Spotify and countless other legal and illegal sites. Owning music files simply doesn't have the same cachet.

This leads us to a great chance for artists: start selling status and attention again.

Give fans what they crave. Amazing music, yes, but also the identity and status that they get from being your fan. Whenever you successfully bundle something with status and attention, its value explodes. Diamonds are just a little bit of carbon when you subtract the status and attention that come bundled with them...

Yokudo has the solution to help you give your fans what they crave.


  1. What I find confusing in the texts on this blog: there is no mention of the fact that forever, the vast majority of artists did not make enough money with their art to earn a living. Now, one can absolutely deplore that as an unfortunate injustice that needs to be changed. But to present that problem as one that the Internet has created, does strike me as odd.

    Yes, a few musicians, tiny percentages of them, could strike it rich and become mega-millionaires thanks to the record industry of old. But the every-musician never did. Making a living as a musician has always been tough. And no business model is going to change that.

  2. Oh, and it is hugely annoying to have to sign up to a blog with login data from another platform AND to have to wait for approval of a comment first. Particularly on a blog that isn't necessarily overrun with comments ...

  3. @martin: I see your point; the vast majority of artists never made enough money with their art to earn a living, and that is not a fault of the Internet. There has always been a power law distribution. Only a few were able to get rich thanks to the record industry. Most weren't.

    Actually, I agree with this observation and I don't think that this power law distribution is going to disappear in the future. The Internet fosters network effects and might even increase this trend.

    However, there are two things that could have a big impact for many musicians:
    1) increasing the pie
    2) finding ways to give smaller acts a bigger piece

    I am convinced that #1 is achievable with a new business model that gives fans a better reason to support their favorite artists with some money. Today, a huge percentage of disposable income is used for luxury goods like Prada handbags, Gucci scarfs and Puma shoes. What if, we could tap into that desire and make parts of that budget available for artists?

    #2 is a challenge, but I am optimistic that we will find some ways to do that too if we achieve #1. We've got some initial ideas.

    Regarding your second comment: Point taken. I've just opened the comments for anonymous users. Your comment wasn't published right away because you posted it more that 14 days after the blog post was published.