Free music! Who's paying?

My marketing brain tells me that illegal downloading is in fact good for the music industry, but not particular artists. I want to write a bit about this. Looking back to the advent of true mass music (which dates from the 1880s), there's a constant factor of expensive media. To get your message to thousands or millions of people, you had to pay someone to make thousands or millions of recordings of it for you. This was even true in the days of home-taping, as anyone with a tape-to-tape deck will tell you. When recordings were made of tapes, things like Dolby's "B Noise Reduction" were necessary to remove the hiss that came with most recordings. Even when CDs became prevalent, making a copy was fairly expensive. Pirate operations did so, but not on a scale that meant Bono ever went without his dinner. This led to a type of process-led orientation that saw massive acts emerge. Acts including Elvis Presley, The Rolling Stones, The Beatles, The Monkees, Metallica, Genesis, Elton John, Madonna and a host of others were successful for reasons as well as their talents. They were the record companies' chosen ones. Record companies had to punt on who to make huge quantities of pressings for and that required huge budgets; making the record itself and then marketing it ate up hundreds of thousands of sales worth of profits. Those bands were always likely to be successful because such huge budgets were thrown at them, we heard their music. Top of the Pops (and its American equivalents) played a tiny proportion of music that was being released and even now, watching TOTP2 on UK Gold, is clear that big acts were at the forefront of our music-awareness well before the songs were selling ("Here's the new one from Spandau Ballet - it's in the shops on Monday!!!" - and the BBC don't advertise....). Now it's just as easy for an act to get their music recorded, mixed and released online as they want it to be. Free software can now turn out a whole CD's worth of tracks. The marketing men have few options. Good music now (and when you say it out loud it sounds like it was inevitable all along) bubbles to the top because it's good, but at the expense of massive sales for a small number of bands. It's hard to see where the next REM, U2 or Green Day are coming from. Even the Foo Fighters are who they are because Dave Grohl was part of Nirvana and the publicity that came with Kurt Cobain shooting himself in the head was worth millions and millions. That pre-requisite has gone.

It's interesting to see the legal downloading has led to a few new market forces in the music industry:

- Non-released tracks from albums can outsell released ones.
- Unsigned bands can get in the charts (Koopa were the first to make the top 40, with the puerile but fun "No Trend").
- Cheaper marketing methods are needed to make sales. These include email marketing, viral campaigns and Web 2.0 (including Myspace and Facebook). Advertising doesn't make as much difference, especially now media owners are hiking up costs of advertising to mass media.

Illegal marketing however means that the most powerful method of all - word-of-mouth - is available. Clever usage (including the time-limited nature of file sharing on Microsoft's new "Zune" mp3 player) of this means huge distribution, far in excess of sales that the artist could have generated in any other way on their own. Some of the bands who have made a career while watching fans listen to their music for nothing include Kate Nash, Get Cape.Wear Cape.Fly, David Ford, Colin Macintyre, James and loads more. Even the meteorically rising Newton Faulkner would have struggled to be heard ten years ago. Indeed he broke into the scene properly when he (and his website) stopped being called "Newton Battenburg Faulkner", which is how he was billed when I stumbled across him supporting Tim Freedman at Ronnie Scotts'. The day after I saw him live I started looking online and struggled to find him or his web site.

The upshot of all that (and I really didn't think I was going to write this much when I started) is that the acts who might have made it huge have to fight it out with the acts without money. The days of massive acts making it and earning hundreds of millions from lucrative deals are possibly gone. The exception seems to be the big R&B and Hip-Hop acts for now. I think that the level playing field is good for music as there seem to be more proper musicians getting heard. I just wonder if they're making a living doing so. I'd certainly suggest that many of them wouldn't have much advantage if downloading didn't exist.

As a music fan I love the fact that I can download a track to see what it's like, but I'm a bit different to many in that I tend to do one of two things with the download: delete it if it's rubbish or use it to base a purchase on. I like having CDs and have a more varied collection now than ever. When the line-up of for the V Festival is announced, I fire up my computer and download all the bands' music that I haven't heard of. Then when I go to the festival, I don't get bored by Keane when I could be listening to Ozomatli or something interesting. Bands whose stuff I've bought after downloading include: InMe, Ozomatli, Gogol Bordello, Easyworld, Ben's Brother, Mohair, Ragmop, Stephen Fretwell, My Morning Jacket, Get Cape.Wear Cape.Fly, Morning Runner and a dozen or so others. There's not one of them that I would have sought without prompting. If Easyworld for instance had spent fortunes marketing to me I might have found them, but at the expense of the others (assuming that record companies write media plans and look at their competitors releases and adjust their spends accordingly).

Ripping from CDs seems to be different. I can see why artists are concerned about illegal downloading, but doesn't the massive reaction of many musicians smack of a lack of confidence in their music? Either they want to commercialise it, in which case the quality ought to be good and illegal downloading should encourage sales and attendance at live events, or it's not to be commercialised and it doesn't matter who downloads it. Ripping then burning replicas of whole albums seems to be a step further. Even so, if someone borrows a CD, rips it, likes it, then buys the CD, doesn't that have a nice happy ending? How or why do you stop that without losing the sale that came along with it?

Seth Godin, the author of "Purple Cow", sees it simply: The more you give away, the more you get back. He's not preaching karma, he's a marketing expert who believes that the true, long-lasting successes in the commercial world have made it by giving their stuff away: Krispy Kreme (give away several million donuts a year), Borough Market (free lovely food!) and countless others are in his books and make perfect examples of selling on quality or not selling at all.

Now I'm going to make a cup of tea. Speak soon.