4 ms·

Back in the early days of the internet, I was the IT Manager at Nettwerk Records. We went out of our way to put complete, high quality MP3's of every song we o

Back in the early days of the internet, I was the IT Manager at Nettwerk Records. We went out of our way to put complete, high quality MP3's of every song we owned the rights to online, for free, because we were willing to let the music stand on its own. We believed that it was worth giving potential new fans the chance to hear what they were (hopefully) buying, and that really was the case. We had so much obscure music in the back catalogue that people would browse our archives, find a band that they'd never heard before, listen to a few songs, and then buy one of their CD's. More often than not, people would buy multiple CD's. For that matter, when Sarah McLachlan's first big album, Surfacing, came out, the day that it hit the shelves we also put the entire thing in (for the time) high quality MP3's up on our web site for people to grab copies of. And even if they didn't buy the CD, we hoped that they'd enjoy the music enough that they'd come out to see her in concert, or at Lilith Fair. That kind of worked out not too badly, it turns out.

nettdata 15y ago
Forgot to mention that the underlying concept was that it was more profitable, in the long run, to make a fan than it was to make a sale.
- backprojection 15y ago
  So why was this not more widely adopted? I mean, if you want to convince a corporation to adopt some business model, all yo have to do is show it's more profitable. Or is that naive?
  - sliverstorm 15y ago
    How do you demonstrate that a fan is more profitable with something more than speculation? In a way that can still be charted in a PowerPoint for the suits to see?
    - omouse 15y ago
      You demonstrate the opposite; that pissing off fans is unprofitable. The music industry is no stranger to speculative charts and graphs; they use them all the time to justify their stance on piracy! "Potential revenue lost".
- steve-howard 15y ago
  The entire M.O. of the modern music industry is to shatter our preconceptions of just how short-sighted somebody can possibly be.
  - Tuna-Fish 15y ago
    This is because the modern music industry honestly believes that it is going to go the way of a dodo. When you think that your sources of revenue are dying, it makes sense to try and extract as much as you can from them on the short term, despite the damage it does to them long term. Of course, this makes the prediction self-reinforcing.
    - Jgrubb 15y ago
      I would actually counter that it's not the music industry that believes it's going the way of the dodo. I'm in the music industry. Have been for almost 15 years now and have never worried for one second about my career. I'm a musician though. The people who are rightly worrying that their jobs are in peril are the suits (though often dressed in Tshirts and ballcaps) who bring less and less value in an age where experiments like Louis C.K.'s are a widely publicized and self-produced success. Disruption at it's finest and most liberating. You're basically right, I just want to reinforce that there are lots of us modern music industry types who couldn't be happier about "the situation". As a side note, I wonder how someone could plot the frequency of usage of auto-tune in the studio with record sales.
    - nettdata 15y ago
      One thing that most people don't realize is that a lot of the major record companies are in fact more manufacturing and distribution companies than anything. Here in Canada, EMI produces and delivers, via physical distribution, a huge number of CD's and DVD's. As soon as things "go digital", that goes away. I think that physical channel, more than anything, is what they've been trying to salvage, by staying away from digital.
      - joechip 15y ago
        I worked for one of the big 5/4/3 music companies and they are actually desperate for physical distribution to go away. Universal Music (the largest music company) sold its CD manufacturing plants a few years ago and all their focus is on digital exploitations. They are looking to the future and that rarely includes people buying CDs in retail stores. I can't stress how desperate they are to take advantage of the huge number of digital assets that they own. So, start-ups, don't be too afraid of them. If you have a way for them to make money they will be interested in you, just don't assume they are idiots. You may also want to start thinking about writing software to help them manage the millions of digital assets that they have - its not a simple problem - imagine the digital rights that needing tracking (for every type of exploitation in every territory), the royalties to be paid, the SOX auditing, the contracts, digital workflows, let alone the challenges with taking digital content and pushing it to a huge variety of downstream partners.
Tichy 15y ago
I think that kind of thing is often also done with a twist: the artist whose content is put online for free (or very cheap) does not get a dime. After all, no money is made from selling his stuff. Meanwhile the company profits nicely in the way you describe, selling other stuff. Not saying it worked that way for you, just that it is an old technique...
dspillett 15y ago
But back in the early days of the Internet, the hassle/quality/price ratios were not the same, so I suspect that would not work as well these days. For a start downloading a full CD would be quite a faf back when most people had dial-up or something else slow as their main connection method. Costly too if you were in a country/area where there were no plans that didn't result in you paying per minute for time on dial-up. To keep the download size manageable you'd have to use a relatively low bitrate, which would probably mean most people could tell the difference between them and the CD, especially with the older compressors with psycoacoustic models inferior to those used today (giving the choice on dial-up: high quality some time later today, or low quality sooner). Being able to download a track, at a high enough quality that you can't tell the difference without breaking out a spectrum analyser, in a matter of seconds means the number of people paying for the CD because that is easier is going to fall drastically. The number of people buying other merchandise of tickets for live gigs might remain more constant though: physical delivery and "being there" can't be refactored by a fast connection in the same way.

nettdata 15y ago

Forgot to mention that the underlying concept was that it was more profitable, in the long run, to make a fan than it was to make a sale.

backprojection 15y ago
So why was this not more widely adopted? I mean, if you want to convince a corporation to adopt some business model, all yo have to do is show it's more profitable. Or is that naive?
- sliverstorm 15y ago
  How do you demonstrate that a fan is more profitable with something more than speculation? In a way that can still be charted in a PowerPoint for the suits to see?
  - omouse 15y ago
    You demonstrate the opposite; that pissing off fans is unprofitable. The music industry is no stranger to speculative charts and graphs; they use them all the time to justify their stance on piracy! "Potential revenue lost".
steve-howard 15y ago
The entire M.O. of the modern music industry is to shatter our preconceptions of just how short-sighted somebody can possibly be.
- Tuna-Fish 15y ago
  This is because the modern music industry honestly believes that it is going to go the way of a dodo. When you think that your sources of revenue are dying, it makes sense to try and extract as much as you can from them on the short term, despite the damage it does to them long term. Of course, this makes the prediction self-reinforcing.
  - Jgrubb 15y ago
    I would actually counter that it's not the music industry that believes it's going the way of the dodo. I'm in the music industry. Have been for almost 15 years now and have never worried for one second about my career. I'm a musician though. The people who are rightly worrying that their jobs are in peril are the suits (though often dressed in Tshirts and ballcaps) who bring less and less value in an age where experiments like Louis C.K.'s are a widely publicized and self-produced success. Disruption at it's finest and most liberating. You're basically right, I just want to reinforce that there are lots of us modern music industry types who couldn't be happier about "the situation". As a side note, I wonder how someone could plot the frequency of usage of auto-tune in the studio with record sales.
  - nettdata 15y ago
    One thing that most people don't realize is that a lot of the major record companies are in fact more manufacturing and distribution companies than anything. Here in Canada, EMI produces and delivers, via physical distribution, a huge number of CD's and DVD's. As soon as things "go digital", that goes away. I think that physical channel, more than anything, is what they've been trying to salvage, by staying away from digital.
    - joechip 15y ago
      I worked for one of the big 5/4/3 music companies and they are actually desperate for physical distribution to go away. Universal Music (the largest music company) sold its CD manufacturing plants a few years ago and all their focus is on digital exploitations. They are looking to the future and that rarely includes people buying CDs in retail stores. I can't stress how desperate they are to take advantage of the huge number of digital assets that they own. So, start-ups, don't be too afraid of them. If you have a way for them to make money they will be interested in you, just don't assume they are idiots. You may also want to start thinking about writing software to help them manage the millions of digital assets that they have - its not a simple problem - imagine the digital rights that needing tracking (for every type of exploitation in every territory), the royalties to be paid, the SOX auditing, the contracts, digital workflows, let alone the challenges with taking digital content and pushing it to a huge variety of downstream partners.

Tichy 15y ago

I think that kind of thing is often also done with a twist: the artist whose content is put online for free (or very cheap) does not get a dime. After all, no money is made from selling his stuff. Meanwhile the company profits nicely in the way you describe, selling other stuff. Not saying it worked that way for you, just that it is an old technique...

dspillett 15y ago

But back in the early days of the Internet, the hassle/quality/price ratios were not the same, so I suspect that would not work as well these days. For a start downloading a full CD would be quite a faf back when most people had dial-up or something else slow as their main connection method. Costly too if you were in a country/area where there were no plans that didn't result in you paying per minute for time on dial-up. To keep the download size manageable you'd have to use a relatively low bitrate, which would probably mean most people could tell the difference between them and the CD, especially with the older compressors with psycoacoustic models inferior to those used today (giving the choice on dial-up: high quality some time later today, or low quality sooner). Being able to download a track, at a high enough quality that you can't tell the difference without breaking out a spectrum analyser, in a matter of seconds means the number of people paying for the CD because that is easier is going to fall drastically. The number of people buying other merchandise of tickets for live gigs might remain more constant though: physical delivery and "being there" can't be refactored by a fast connection in the same way.