Chris Anderson's latest
Free (which finally came out in paperback in the UK) is an essential read for anyone involved in the new music industry. He positions the psychology of the £0 price tag in the digital economy, dissecting the reasons why media has rushed towards a free price.
The tension that exists between the artist and free is often not based on the gross margin of their material. In fact very few discuss (or even understand) the full potential earnings from making music. It is complex - with a myriad of revenue streams, collection agencies and stakeholders, all of whom are usually managed by someone else (the label). The primary concern of the artist is that free "de-values" their work.
Anderson explores many arguments that counter this perception of free. Primarily he points out that an artist's true intention should be to deliver their work to as many people as possible - and that free, if used correctly, offers the best strategy to acheiving this. If this is the case, free holds a very high value.
I've held this belief for quite some time (here's
something I wrote in March 2009), which has lead to another question that I don't think many people have gotten to grips with - how do we measure success in a free economy? Our belief of an artists stature has been related to chart position and sales - this seems no longer relevant.
I noticed a recent
Independent article stating that Microsoft's share value has slumped below Apple's - prompting Microsoft CEO Steve Ballmer to state that despite this his company will "make more money than Apple". It strikes me that this mark of success - the total amount of cash you bring in - is now less important. The need to "win" by selling more is not a building block of a great 21st century business. Apple has value because it is a brand that is loved passionately within it's community - and that community is growing bigger. I don't think I've ever met someone that was a zealot of a Windows product.
The lesson here is not that artists need to sell more, or accumulate more fans. They must set their own measures of success and work towards building a strong community that will support them. The liberation and opportunity that "free" can offer, along with the potential of the Internet to connect artists with millions of fans around the world, should be welcomed as a foundation of a new start for the industry.
