It occurred to me the other day, that the music industry and software developers are beginning to have a lot in common. The proliferation of digital content, both legal and illegal, has radically changed the way people purchase music. But to those of us who have been distributing our work via the Internet since day one, downloads are not a big deal.
Let’s take a look at how software developers do business and see if it sheds any light on the music industry and their period of transition.
The thing that drives software sales is the notion of “try before you buy.” Gone are the days where you walk into a computer store, scan the shelves for an application, purchase a disk to take home, and pray that it solves your particular problem. Now, every customer has the expectation that the application prove its worth before they hand over their money.
Gone too are the days when you walk into a music store. Unfortunately, the record industry hasn’t realized that this is a good thing. They’re still clinging to the notion that your purchase should be based on nothing more than a 30 second sample. Like software, you have to spend a little time with a song or album before you discover how much you like it.
Of course there’s a need to protect your work so that a potential customer will eventually make the purchase. People are lazy, so you need to find a way to create an incentive to buy.
Some software is distributed by leaving out features until a serial number is entered. A similar technique can be used with music. A great example is Team Love Records which made downloads available for the Rabbit Fur Coat album by Jenny Lewis with The Watson Twins. Every track could be freely downloaded except for one: the track getting airplay (“Handle Me With Care”.) This approach worked very well for me—I knew the hit track from the radio and found out that I loved the other tracks just as much. And, in the end, I was a happy customer.
A similar thing happened with Bob Dylan’s Love and Theft album. A friend of a friend of a friend got ahold of a leaked copy of the album. I found it interesting that a couple of the tracks had really crappy sound: someone made a “mistake” and encoded the tracks at 32 Kbps. You could follow along and get the gist of the song, but I was very happy to “upgrade” on the day of release.
Another approach we’ve taken in releasing our software is to provide additional benefits after a purchase. This can be access to support, a special website or even new features or content. The record industry has done the same thing.
A couple of recent releases come to mind: Cat Power’s Jukebox album and Neil Young’s Live at Massey Hall. The incentive with the Jukebox album was the inclusion of an extra CD with four additional songs. Similarly, the Live at Massey Hall package came with a DVD containing footage from the concert. Both were things I wanted, so the decision to buy was easy.
For artists that you love, getting a complete set of their works is important. If I had been given a free copy of the “basic” CD, I still would have “upgraded” to get all the songs and/or video.
Now, let’s look at one thing that works for software distribution, but isn’t going to work for music: the notion of a time limited demo.
We have a reliable clock, a local file system to record usage, and other mechanisms that make tracking relatively easy. Of course, these things can be overridden or disabled by dishonest users, but the vast majority of honest people make up for it. As developers, we have also learned to encourage users towards the purchase: making demands does not work. Pissing people off will turn them into pirates, not encourage them to buy.
A MP3 file doesn’t have mechanisms for tracking. And we all know how the attempts to add them with Digital Rights Management has gone over with consumers. That’s because it’s a system based on demands: you must be authorized.
Finally, the best thing for business is to make sure you have the best product available. That’s both the beauty and the challenge of any “try before you buy” system. Good products win, bad products are quickly forgotten.
I suspect that the root of the music industry’s problem is this: they have been able to produce sub-standard product for many years. I know there are many albums in my collection that consist of few great tracks along with a bunch of crap that I’d rather not listen to.
And the iPod, which makes single tracks viable because you don’t spend all your time moving physical media around, allows people will buy only the product they find interesting. If the music industry wants to make more money, they need to make something besides one big hit plus filler. Can you imagine buying a software product that had one feature you really needed and 99 others that were worthless? The value is in the whole, not the individual parts. If you make compelling albums, people will buy more music from the artists they love.
In the end, however, I suspect that the large music companies will end up in a similar position as the large software companies. They will have the blockbuster product/artists with a lot of recurring revenue from each new release.
But the most interesting part of this ecosystem will be the independents. The people who have a smaller, but much more loyal following. The people who listen closely to these fans and realize how important they are to their creative works. The people who feel the joy of a customer telling them they rock.
That’s the beauty of this thing we call the Internet: it’s a two way street. And all it takes is a web page to start that conversation.