WARNING Record Labels: You Are Losing Money From Producing Crap, Not Piracy

cheap crap is no longer profitable

Photo Credit: Joshua Rappeneker

If you have been recently reading about the death of the recording industry, copyright lawsuits, AP's decision to DRM the news, how the internet has killed the newspaper and so on, you would be aware the degree of debate new media brings. Both sides are very vocal in their opinions, and both sides voice them through their "medias", old (newpaper, tv) and new (online, etc). The debate has been raging since Napster was shut down nearly ten years ago. I

Bait and Switch

Old media is not happy about its loss in revenue. And there has been a loss in revenue. Casual Fans no longer need to pay to view content. Traditionally a CD had to be bought to be heard. Whether or not it was very overt, bait and switch marketing tactics where rife in the industry compared to today.

The issue was that a CD would be hyped up. One song, the single, would be produced to 'radio friendly perfection'. Which was then spun the hell out of on terrestrial radio.

Huge mass marketing campaigns were run. The end result, everyone had to check out this CD that was debuted at #1 on the charts (another fallacy, as the charts were constantly gamed by labels).

But it was crap. Some people liked it, for others it may just not have been their style of music. For most it was 'all filler no thriller'. Though people did not know this, they thought it was at the top of the charts so it must be good. So they buy it.

And they find the one song (the single) that they like. Most never even listen to the rest of the music. These casual fans feel ripped off. And rightly so, they expected a great album and got one good song. Not to mention how horrendously over-priced music was.

The Lost Sale

But now... well, most people don't have to buy the album to know if they like it. They can, and will, find a free method to listen to the songs. Legal or otherwise. They can, try-before-they-buy. Most of the time the free version is no substitute for the 'real' thing, as such many fans proceed to buy the music (if they can afford it).

I wrote a post a little while back stating why the "lost sale" is nothing but a myth. I must confess I was slightly wrong, it is not a myth. It is a fact. But not for the reasons the major labels/rightsholders would like you to believe. It is a fact that consumer will not pay for something they do not want, or buy something they believe they have a high risk of not liking/never using. Why do you think you can test drive a car, or sit on a couch before you buy it?

Record labels are losing money because they can no longer sell crap. They lost part of their audience that once bought music they never listened to. They lost part of their audience, that in effect was not their audience in the first place.

Casual fans are not paying for music they don't like. Why would they? Would you buy a couch you were told by couch reviewers was good and then later discovered it was absolute crap? No you would return it, you would probably tell all your friends it was crap too. You would also become less trusting of the place who made the couch (the label) and in future you would make sure you sit on that couch (listen to the song) before you commit to buying it.

In the atoms world of physical, controllable distribution this was merely a fact of life. You took that gamble, because usually you had no choice. But in the bits world of unlimited, free transfer of information you can actually sit on that couch for a good deal of time before you decide if you like it.

Good music sells, and it always will. The only difference is that now, we can discover if we like the music before we buy it.

Where's my Money?

What happens when you remove a significant (albeit immoral) portion of a business' revenue? They get pissed. And in the case of the record industry, they bring out the lawyers. They spend millions that could be put into artist development (like in the golden era) on legally attacking their customer base. Let me rephrase that, they sue the people who don't like the shit they are peddling. They lobby to infringe as much on personal freedoms in a vain attempt to cling onto the government granted monopoly they once held.

Realistically casual fans never were, and never will be a sustainable source of income. People "pirate" music for a number of reasons, they can't get it in their country, they can't afford it right now, or what I suspect is the main reason: they don't want to risk their hard earned on music they may hate. They are worried they may get ripped off.

Just imagine if you bought that couch, only to find you didn't like it and couldn't give/sell (DRM) it to someone who wanted it.

Music is no longer constrained by atoms, it now lives in its original form. As information. Treat it as such.

To learn more about how to properly market your music have a read of The Long Tail Of Fans.