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What’s A Download Worth? Part 1 – The MASSIVE Downloader…

August 3rd, 2010 | 26 Comments | Categories: New Music Strategies |

Following on from the BPI and their mad statistic that £200 MILLION is lost in UK music revenue due to ‘illegal downloading’, (their head of public affairs attempted to defend the notion, based on ‘research’ they’d done at the all party meeting last week. Balls.) I thought it’d be worth talking about what a download is worth.

Because, clearly, a collection of bytes on a harddrive isn’t, in and of itself, worth anything. It’s also not ‘taken’ from a central repository of bytes that gets smaller as it is dipped into. In fact, every time a new person downloads it, more ‘product’ is able to exist. If bands were in a situation where for every CD they gave away, they were given another 2 CDs to give away, they’d give everything away, because CD ownership is a tangible, measurable thing, and having 100,000 CDs out there, and not have lost a penny to make it happen, would be awesome.

But why would a CD be worth more than a download? Let’s keep going…

So, the analysis of torrent traffic often points out that as broadband speeds get faster, some people are downloading music in ever greater quantities. Given that those same people haven’t jumped into a parallel universe with more hours in the day, days in the week, weeks in a month and months in a year, we can assume that the amount of time they spend actually listening to music is relatively constant. What has changed is that they now have an unmanageably huge amount of stored music to listen to. So much in fact, that a large percentage of it never gets listened to. I’d love to see data on this, but I know a LOT of people with big LEGAL music collections who have music they’d forgotten buying, CD owners who reach of a CD mentioned in conversation only to find it still in the cellophane…

It’s very easy to be overwhelmed by the volume of music we have, and when we do, the value of it being present on a harddrive is reduced to zero. The musician didn’t lose anything for it to be there, the person who has it possibly doesn’t even know they’ve got it, certainly doesn’t know anything meaningful about it, and as such no value transaction of any sort has taken place. We’re back to invisible bytes.

At that point, massive collections of torrented music become not a replacement for CDs, but a replacement for radio; the kind of music experience that Spotify replaces, not HMV or Amazon. And we’ve already seen that the finances around Spotify are pretty much worthless to anyone who isn’t already a multi-millionaire. Spotify mega-plays are a reflection of riches elsewhere, not a way of making sustainable amounts of dough. No, instead, they are free promo. They are a way for artists to entice their audience into a relationship, only Spotify, despite not paying artists much, also doesn’t have links back to the artist sites, pulls a limited amount of artist data for known artists from already established databases, and isn’t embeddable in a self-branded site. Someone tell me how that is different from Torrented tracks that get listened to once and forgotten about? At least with torrent material, it can be seeded with links, info, notes from the band…

So, what happens when someone torrents a whole load of stuff that they weren’t going to buy, and discovers something that they love? Music they want to listen to over and over again? Well, this is where some of the other market research begins to make sense – more than one survey has found that people who torrent a lot of music also spend a LOT more on music. This makes total sense when we start to understand the torrents as a discovery mechanism. It just means that the gate-keepers of discovery are less important than a follow-your-nose trail through a mess of downloaded material that allows us to stumble on the good stuff.

The answer to this then, is not to try and put a cash value on that downloading experience, but instead to make it easier and easier to make the connection between discovering a song you like and forming a relationship with the person making that music.

I’ve commented before that, as far as I know, there’s none of my music available via Torrents. I check the various search engines every now and again, and have never seen a single track. Now, given that there are tens-possibly-hundreds of thousands of MP3 copies of my music out there, it would seem unlikely that people aren’t sharing it. I know for a fact they are. But I’ve made my own site the best possible place to get my music. I haven’t dictated how to get it – “you MUST buy it on CD or iTunes!” – no, I’ve made it available, to stream in full, to download and pay whatever you think it’s worth, starting at free. I want to make the discovery process happen on my turf. My branded space, where a relationship can very quickly be formed between me and my listeners, via the music. I lose nothing when someone downloads my music, whether they pay or not. I just open up the possibility of a relationship. If they got it in a 50Gb file of ‘ambient music’ or ‘bass classics’, it’d be utterly worthless, if they get it from me, for free, they’ve been to my place, in my space, and are going to come back to find more, and can easily share the links to my site – more easily than they can send the files!

So, back to the meaningless stat at the top, I’d love to see, if we take the top 10% of biggest selling bands out of the equation, how much the major labels SPEND on needless promo per CD sold. Nine out of Ten CDs on big labels fail to recoup, so the money must be going somewhere – free downloads cost me WAY less than the kind of promo that would be required to get listeners to convert to buyers via conventional media outlets…

I’ll look at some other kinds of downloading value in Part 2.

For now, does this make sense? It seems like a no-brainer to me…

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26 Comments so far ↓

  • Matt Stevens

    Great stuff Steve. My theory is that there are different types of listeners:

    Rapidshare people, torrent people, dirty blog sharers, itunes people, emusic people, record shop people etc

    I think its vital to be everywhere to be able to connect to all these people. My album is on all the torrents and while I’d rather people downloaded it for free from me I think the torrents are a useful way to make connections.

    To be honest there was a slight drop in downloads of my free album on my site when it was added to the torrents. I thought people would download from my site rather than a torrent but then again some people are “torrent people” and thats their preferred download method. Maybe they were starting to tail off anyway – who knows?

    The only thing that does worry me is that many of the torrent sites are connected to some very dodgy porn/scam/virus sites and I wouldn’t want people to get involved with that.

    Like has been said previously “obscurity is a bigger enemy than piracy” and we are truly entering a time of people requiring to be patrons of the arts. If people pay I can afford to make more records, thats the deal :), better to engage than fight a battle you can’t win.

    • Steve

      Good points, Matt – out of interest, did you seed the torrents, or someone else?

      I agree with you about the seedy side of the torrent world – I think it’s far from ideal, and I’m sure that ‘Torrent people’ actually evolved out of the failure of musicians and labels to supply music in a way that made sense to people who in a very visceral way saw the availability of lots of new music as a fabulous alternative to digging out specialist radio shows and podcasts…

      The effect of ‘ubiquitous music’ on music listening culture is a much bigger discussion – the value of forming deep relationships with the music we love is a tricky one to convey in this climate, but I’m far more wary of social engineering via legislation than I am of people taking a few years longer to realise that ‘music on tap’ actually doesn’t serve them as well as applying some kind of filter and finding the music that really matters to them…

      • Hannah Nicklin

        I just thought the habits of someone who essentially grew up at the advent of the p2p age might be interesting, so here’s where I am.

        As a once ‘torrent-person’, I have to say mostly my torrent habits were driven out an excess of love for music, and a deficiency of money with which to buy it. I would always save up to go and see the bands live though.

        My habits recently, however, have changed. I’ve bought more music this past year than since I was 14 and Napster came out. Granted it hasn’t been much, about 10 albums, all of them pay-what-you-want, but the reason for that change?

        1) I can, for the most part, try music before I buy it on Spotify or on soundcloud/bandcamp

        2) I can actually afford to pay £4-5 for an album that I love.

        3) I don’t have to own a stupid, wasteful, low quality, space consuming piece of plastic.

        4) I am, for the first time, in day-to-day contact with the actual people making this music, on Twitter, mostly. I see their creative processes, the work that goes into it, what they give. I see them as real people. People I’d like to thank in person with whatever I can afford.

        But I still torrent. When? When I can’t find the new release to stream anywhere. I can’t afford to waste money on an album I won’t like. It then takes an awful lot of love for an album/band/artist to buy what you essentially already have…

      • inkysmudge

        Steve, good post and thought provoking comments, all. For me the most salient point (albeit not the main point of your post!) was:

        ‘The effect of ‘ubiquitous music’ on music listening culture is a much bigger discussion – the value of forming deep relationships with the music we love is a tricky one to convey in this climate, but I’m far more wary of social engineering via legislation than I am of people taking a few years longer to realise that ‘music on tap’ actually doesn’t serve them as well as applying some kind of filter and finding the music that really matters to them…’

        …because rightly or wrongly, I believe that a lot of these issues are a symptom of that bigger discussion.

        Over on Music Think Tank, Kyle Bylin posted this yesterday http://www.musicthinktank.com/blog/savor-your-music-the-effect-of-abundance-in-culture.html?lastPage=true&postSubmitted=true

        As always, keep up the good work sir. I is learnin’ 😉

      • Matt Stevens

        No I didn’t upload my music to torrent sites but I was really pleased they did :) – and if it hadn’t been uploaded it i would have probably done it myself. By goolging “matt stevens torrent” i did find some seriously dodgy sites thou, nasty porn/ads and all that which is vile. I did wonder who first uploaded it thou – it seems to be spreading at a fair old pace and hopefully thats a good thing.

  • Adrian

    Great post, Steve. With jamtrackcentral.com, our experience of torrent networks is similar to yours. Our entire product range is online-only, and we’ve got exclusive material by Guthrie Govan and various other scary guitarists, so we ought to be a teenage file-sharer’s wet dream.

    We looked into a sales dip last year, and initially assumed we must have been losing stuff to torrents. I did masses of searches, but could only ascertain that someone, once upon a time, had shared a couple of our packages on Bit Torrent… however, all the torrents were dormant, with no seeds. Similarly, on Rapidshare, there were traces of things that had been available, but the only active downloads were stuff that we already provide for free on Youtube.

    These are only anecdotal accounts from individual independent musicians, but it’s all pointing to a LOT of industry hysteria.

  • John Sullivan

    I remember when U2’s manager, Paul McGuiness, recently delivered a tirade against illegal downloading (like it’s hurting U2) – he referenced the fact that Radioheads recently (at the time) “pay-what-you-like” album “In Rainbows” and claimed it had been torrented (“stolen” was his word) more time than it had been legally downloaded from waste.uk.com and that this in itself heralded the failure of the “download/digital” market.

    Ignoring for a moment the debate as to whether it’s possible to steal something that someone is giving away for free, the fact of the matter is that’s what’s actually happening with torrent sites, et al, is a new method of (if you’ll excuse the clumsy construction) “Distributed Distribution”…

    Matt asked on Twitter once whether there was a “glass ceiling” for the limits of success a modern “independent” artist could achieve and I believe there is – the limit is hours in the day. There is only so much time that a musician can spend marketing, relationship building, web-site watching and download organising. The solution is to open that workload up to fans – be they fans of the artist, or just fans of music.

    By allowing (and even self-seeding) an archive of an album onto bittorrent, with a decent .nfo file which contains salient information, the artist’s website address, a direct link to the “pay-what-you-want” page, even a Creative Commons license of some for or other, or an exhortation for people to pass the file onto their friends; by allowing this, artists are raising that glass ceiling a little higher.

    If you agree with “pay-what-you-want” you have to agree with torrenting, and moreso, you have to embrace it too!

  • Steve

    If you agree with “pay-what-you-want” you have to agree with torrenting, and moreso, you have to embrace it too!

    No you don’t. You don’t *have* to do anything. It’s quite feasible to see the industry around Torrenting (the selling of ads, often to really dodgy services) as something deeply undesirable… The point is that to try and legislate against it is a flawed plan of action. An alternate ‘clean’ service would make a lot more sense – a seeded network, guaranteed quality, spam-free, meta-data-laden files, with a pay-what-you-way interface built into the file structure would work a lot better.

    But, music consumption patterns point to most people not wanting or needed music on the scale that makes Torrenting advantageous – one album at a time downloading is much better handled on musician’s sites, where choices can be made, questions can be asked, information can be had and connections made…

    • John Sullivan

      Well, of course you’re right. You don’t /have to/ do anything – you can just ignore torrents as they exist today, assume that the people getting music from there have no interest in developing relationships with the artists and that they’re not potential future consumers. And given the worries about the current mire that torrents sit in, I guess that will be a course of action chosen by many artists.

      But torrents and “dirty sharing” are not going to go away – you’re right again that legislation isn’t the answer; it will only drive things deeper underground – and those potential fans will always be there.

      I’m curious as to who you think is going to manage and administer a “clean” network, if the concept is for it to remain a free distribution method. Sure, iTunes or any one of a thousand other commercial concerns could start a tracker, but what would be in it for them to do so? Surely it would just become another distribution method for the existing media outlets – not a new avenue for independent artists to explore and utilise?

      • Steve

        I’m not sure who or what would make a ‘clean’ network work. It would require each artist to have an active presence for it to mean anything, given that the transactional point is the relationship between artist and listener, so a downloadable version of Spotify would be as meaningless as bit torrent.

        I’m pretty neutral on Torrenting as a rule – I’ve used them to replace my vinyl collection as MP3s, and as a TV catch-up for some things I’ve missed on the iPlayer, but they are definitely the clumsiest option, and I’d music rather either buy the music from the artist (or a sensible sales platform like eMusic, or at times, Amazon) or watch on the iPlayer…

        The huge failing seems to be an industry that has set itself up in opposition to Torrents which has coalesced a ‘community’ around the Torrent network that have no real connection beyond their lazy ideology of ‘sticking it to The Man’ by downloading stuff for free. And that that industry has failed to present a cogent alternative – Spotify is the best they could come up with, which again does nothing to help support artists. It doesn’t deal with any of the main cultural or business problems with BitTorrent, besides the links to 7Digital for the artists that are on there (why no automatic inclusion on the 7Digital Store?)

        I said in yesterday’s post, I have no desire to put people who want to listen to and share my music in a position where they have to break the law in order to do so. As James Boyce so succinctly said at ORG CON last week “when we decide it’s OK to break the law, we lose a very important battle”, especially as none of the file sharing activity is done within the traditions of ‘civil disobedience’.

        The biggest question for the listener is ‘are you part of the problem or part of the solution?’ – torrents are not part of the solution, they are just a way of getting some free shit…

        • John Sullivan

          You say “torrents are not part of the solution” but this is inconsistent with other replies you’ve made on this very page and goes against the statistic that you yourself brought to the table – that people who torrent also spend money of music.

          Do you think those people buy totally different music to the music they torrent? Or do you think they use it as a “try-before-you-buy” situation? (I certainly know people who do just that, and who also use torrents to decide if they will pay the increasingly expensive ticket prices for an act who comes to town…)

          • Steve

            Hi John,

            I don’t think Torrents are detrimental, but I also don’t think that that the way they are set up at the moment is the way forward. The challenge is to offer something better than Torrents. It’s fairly easy to do. *If* people are currently getting music from BitTorrent, for whatever reason, then it’s better for an artist to be listened to than not listened to, but that’s not the same as being part of the solution. They are a neutral stop gap that will hopefully inform the way that we form the systems, technology and networks that do help us to build something that works for as many people as possible as we move forward…

            Being able to use Torrents for good is one thing. It’s not an environment that fosters it, it just shows how many people there are out there who care about music whichever way they get it. The lunacy of the BPI position is to a) present free discovery as a bad thing, and b) to not see that even the imagined “problem” with Torrents only exists when the bands themselves aren’t offering something better…

  • rubken

    Browsing TorrentReactor and sorting by number of seeders I could’t find anything that was not a commercial release in the top 1,500 items. I may have missed something but it is predominantly Lady Ga Ga and Timbaland. Torrent sharing is mostly a means to avoid paying for popular releases.

    This could be seen as “the market” setting the price they are willing to pay for this music. This “dirty sharing” is the easiest way to get the music for free. Perhaps that’s the value of commercial popular music these days?

    How music is shared for free outside of this virtual back-alley is important though. When In Rainbows is shared via torrent it avoids the tip-jar payment system. Sure, you didn’t have to pay, but you could and many did.

    With Creative Commons the mechanism matters. It is important that the license is maintained. If I post Steve’s music on my site it’s important that I make the license terms clear so that those down the distribution chain understand how they can use the music. It’s important that CC doesn’t become a synonym for “free”.

    Different artist have different goals. I hope that the potential granted by online distribution can evolve to create a culture where individuals, both musicians and listeners, can thrive together. That should be the point of systems like copyright, to nurture a creative culture.

    • Steve

      …the key point there seems to be that those people are MASSIVELY successful even with all the Torrent traffic… If Lady Gaga has managed to sell well in excess of 20 million downloads, even with them being incredibly well seeded on Torrents, it shows that it’s possible to make money alongside that, in fact it suggests that it’d be BETTER to provide your own free copies and see if you can get the music out even wider…

      You’re right about the CC license, thanks for making that point! I think I’ll add it to the metadata on the files themselves (assuming it’s not there already)…

      • Chris

        Indeed, but let’s face it, Lady Gaga’s market tends to be less tech-savvy than let’s say, the market for electronic music, which will suffer more heavily by comparison. It’s problematic to really consider all artists and genres in general terms.

        • Steve

          That’s an interesting point – not sure it’s one that marries up, in terms of ‘the kids’ being able to torrent things – Electronica tends to have an older audience, who are more likely to have grown up with the idea that music is to be paid for, than a bunch of teenagers who’ve been told that ‘all music is available for free’…

          It would seem, observationally, that part of the problem with a lot of Electronic acts is their lack of interaction with their audience. It’s a genre that very often seems to retreat into mystique an mythology, perhaps as a way of disguising the nerdiness of the people making the music… I can think of a lot of Electronic music makers whose music I really enjoy that I have never heard speak, or seen in a video… A little artist-to-listener communication can go a long way.

          (this is of course pure conjecture, and I have no stats to back it up, just my I’ve witnessed around me :) )

  • Will

    Instead of trying to control the distribution I would focus on providing a great experience on your own site via added goodies, membership site, etc.

    Another way to look at what Matt is saying is that there are ‘pay’ people and ‘free’ people. Many e-commerce sites involving the freemium model feel that 80-90% or more of people will never pay and go for free version/download. A small percentage will pay and support the business.

    In email marketing the same thing happens, called segmentation. Tons of people sign up for a free goodie. Then you offer this group a cheap purchase like $1 which segments people into buyers and freebie seekers. People with access to credit cards. Then these people are much more likely to buy higher priced products from you.

    It’s probably not worth trying to convert someone who torrents into a buyer although some of them may eventually buy. Instead try to find the buyers. Develop a relationship with them via email, facebook page, twitter, etc.

    Torrenting is fairly risky from a security perspective so offering high quality versions and other benefits of joining on your own site could be beneficial.

    Also, some music futurists like Glen Leonhard feel that you should focus on selling an experience that can’t be copied such as live show, skype music lessons, etc.

    • Steve

      thanks Will.

      The interesting stat is the one about people who use Torrent sites spending a lot on music… While I’m sure there are people who only Torrent stuff, research seems to suggest that there are a lot of people who do both…

      the ‘sell an experience’ notion is fine, but it’s unnecessarily defeatist in relation to the profitability of recorded music. It’s still possible to sell CDs, vinyl and USB sticks, people are still paying for downloads, there’s a lot of life left in people paying for music, especially at shows. Artists just need to be aware of what’s possible, compelling in the narrative around what they do and why they do it, and realistic about trends amongst the people who are actually interested in what they are doing…

      • rubken

        I think that people who pay for your music on Bandcamp are buying an experience. They are contributing to you as an individual musician. That’s why your blog, Twitter stream etc. are important. The experience of being an engaged fan is exciting if there’s something to engage with.

        This makes traditional marketing detrimental though. As a listener, I don’t want to engage with a PR flack. I want to engage with the creative people who make the music.

        I wonder if this is a new kind of stagecraft for the 21st century.

        • Steve

          Rubken,

          that doesn’t tie in with what Gerd et al are describing as ‘an experience’, as live music or ‘skype lessons’ are a scarce product – you can only have them if you pay. My twitter feed and blog are free to anyone. You could’ve copied every single thing I’ve ever made for free AND still have access to the blog. There’s no extra access for people who’ve paid more… And yet people still pay. Out of gratitude.

          Yes, in as much as you ‘experience’ my blog and tweets, they are an experience, but if they inspire people to pay for things, it’s out of gratitude for them music, friendship and the desire to be part of something intrinsically good rather than as a transaction that gets them through the paywall to a scarce experience…

          • rubken

            It’s the second example I was trying to get at Steve. I think it’s more than gratitude though. I get a sense of involvement with musicians who work in the way that you do with tip-jar pricing and CC licensed music.

            There is a transaction but I hope it’s emotional as much as financial. It’s not just about the music. It’s about creating a culture.

            Perhaps we are moving to a situation where music will not be a product. As you say in the post what kind of product is a digital file anyway? That doesn’t mean that music will have no value though only that the expression of that value will be different than the price tag on a CD.

          • Matt Stevens

            What people are buying into is the community not just the music.

  • Howlin' Hobbit

    I’m not bigtime by any stretch of the imagination. I’m in a terribly small niche. Yet, last year when I asked my fans if there were 100 of them out there that would pitch in $3 for my EP (in digital form from Bandcamp) so that I might replace my dying laptop it only took about 12 hours for MORE than enough to arrive into my PayPal.

    Trust your fans.

    I’ll say that again…

    Trust your fans!

    If you have *anything at all* to offer, even to a *tiny* niche audience, your fans — and you *do* have fans — will come through for you.

    So, you know… ignore all the bullshit from the dying “music industry.” Don’t spend a second worrying about someone “stealing” your music.

    Just connect with those lovely people who like your silly stuff. You’ll suddenly feel like a rock star. It feels kinda good, actually. Go for it.

    And don’t forget to say thanks to your fans.

  • Rob Michael

    Great post Steve.

    The concept of having your own place on the net that serves as the primary destination for your listeners is ultra-crucial IMO.

    The option-fatigue that the web provides can be effectively neutralized by having that in place.

  • Miles Dumble

    I’m really pleased to see that not all artists are closed-minded to the internet and the opportunities the new distribution methods bring.

    I am a major music fan. I live for new music. I’ve lost count of the many artists I’ve discovered due to the Internet. If I like an artist, I financially support them for decades. (I even bought the £40 Radiohead In Rainbows box-set though they gave their album away free.)

    However, I mainly use the Internet to find the material that isn’t commercially available.

    When I go and see an awesome live show, I’m desperate to find a bootleg audience recording.

    When I own every album an artist commercially released, I search for obscure B-Sides that were released briefly but are now no longer available.

    I love the fact that I can hear this obscure stuff without having to visit record fairs and paying over the odds for a rare vinyl. After all, the original artist gets exactly the same amount of money either way – zilch!

    Of course, it goes without saying that if the original artist officially released this rare material again, I’d buy it on the first day and probably in several different formats too. 😀

    Misconceived laws like the Digital Economy Act actually stop me from buying new music. Every time I think of buying an album, I’m now aware that my money will be partially funding BPI lobbying for even more draconian schemes and consequently, I’ve bought far less as a result.

    As someone that used to book hotels on the basis of their proximity to an HMV or Virgin, this is a sad state of affairs.

    As a result of this excellent blog post, I’m now legally downloading and listening to your music. Keep up the good work!

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