Illegal Opinions
In some interesting comments to my last post, a commenter named HomerJ makes some claims about the state of the music industry, about surveys done and about downloading content.
The “radiohead experiment” was a failure. Read this article: http://www.comscore.com/press/release.asp?press=1883 Basically most people freeloaded and paid either nothing or next to nothing for the music. Radiohead still made some money out of it, but way less than they could have via normal commercial channels.
This is a very interesting point, and the article is a good read, yet there are a few things to note here if you want to interprete it as a “failure”…
What we know from their data is that about 2 out of 5 people who downloaded the album paid for it. In the model they tried, people were invited to determine what price they thought was reasonable, so different prices were paid by different people. So the assertion that HomerJ makes is that they made less money from this than they would have from normal sales.
Before drawing any conclusions from this, let’s do the math: With an average of 40% of everyone paying $6, the number needed who would actually buy the album at normal download cost ($8) is 30% for a break even. Now there was a whole lot of attention in the media about this, so it’s pretty certain that a fair few people downloaded it just out of curiosity… that’s the whole point, isn’t it? And if a few of these people liked it, and paid for it, that would otherwise not have bought the album. Also, some of the people who paid less for the album may not have bought it at all, while the people who paid more would of course only have paid $8 for it.
So in order to declare this experiment a success or failure, you have to take into account all the above factors in order to determine whether the amount of people who would also have bought the album for $8 if it had not been available for free download is more than 30% of those that downloaded it. The answer is in no way obvious, so I’m not going to claim to know it… but claiming it as a failure only on the basis of that study is a leap of faith, rather than a logical deduction.
Essentially, this comes down to something I’ve written about before as well: it’s time to overcome the primal reaction of feeling let down by someone “taking my stuff” — what matters is not how many percent of all people freeload, but how much income there was as an end result.
HomerJ also commented:
I can ignore a study when it says that it is based on surveys. I don’t need to disprove it because the underlying methodology is known to be too faulty and biased for usage. Of course pirates don’t particularly care, they’re happy to use anything to support their freeloading.
Ah, of course… anyone who thinks this way only does so to support their freeloading, to justify their piracy. It may suffocate the discussion, but really does it ever win anyone over, or convince anyone? Intimidation is unlikely to get you customers.
It’s a discussion where one side inevitably calls the other side names — which really is quite a curious fenomenon. I’m happy to discuss the facts, research, ideas and to hear arguments… but I’m not happy to be called a criminal whos only motivation is to justify my own criminal behaviour (which it’s taken for granted that I have), when talking about broader ideological issues. I may not agree with someone, but calling them a thief or criminal because of their opinion isn’t likely to help either of us.
It’s a somewhat slippery slope of debating that shows in all parts of copyright and piracy debates… some opinions are simply considered illegal even to express, or at the very least the only reason to have said opinions is that you’re a criminal. I find that highly dangerous even in the broader sense that it threatens the very democratic foundations we build our nations on… In the words of Voltaire, “I do not agree with your opinion, but I would fight to the death for your right to express it“.
And as noted, I already make my living from copyrighted works, in a business hit extremely hard by piracy.
Followup | slicedlime | 
Monday, January 26, 2009 19:56
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By HomerJ, Tuesday, January 27, 2009 @ 10:10
I would recommend that you stop the call to arms over Freedom, that tactic doesn’t work. I did not call you names. I simply stated that, as you quoted, pirates use dubious studies to support their piracy. Freeloading is also an appropriate term for someone who takes but does not contribute. Our society was not built on people simply taking what we want and not contributing anything in return. It’s the fast road to ruin when we establish piracy or freeloading as an acceptable norm.
You are thoroughly and completely confusing the concept of freedom with the concept of free. An artist should be free to create and distribute their work as they see fit, but consumers do not have the automatic right to enjoy an artist’s work for free against that artist’s wishes. That’s why piracy has negative connotations and is illegal, because it is a violation of the artist’s rights.
If Radiohead are happy with their little exercise, then that’s all well and good for them. However to use their exercise and extrapolate those results to imply that it is a “successful model” for others to follow is clearly false.
When – despite so much hype and publicity – over 60% of the people who download your work pay absolutely nothing for it, then you can draw two clear conclusions:
The majority of your audience does not value your work at all.
or
The majority of your audience values your work, but does not want to give you any money for it.
Correct me if I’m wrong, but for a commercial venture based on copyrighted works, it is extremely risky to invest thousands or possibly millions of dollars if you know with a reasonable degree of certainty that the majority of your audience won’t pay you one cent for your output.
The Radiohead experiment is a failure when viewed in its entirety. Radiohead are a group which was fostered and gained fame through the old corporate record-label factory – millions of advertising dollars spent to promote them. When a big-name band releases what is widely acknowledged as a great album amidst a huge amount of media hype, and yet over 60% of their fans pay $0 for it, and the rest pay an average ranging from $1.5 – $3.5, that *is* a failure for this model.
If you’re happy to create and release your work on the honor basis, and have the majority of your audience pay you nothing for it, by all means go ahead and do so, that is your right.
What I tend to dislike however is when people use these types of arguments to justify piracy, which is the illegal obtaining of copyrighted works without the creator’s permission. That is a completely different thing, and neither you nor anyone else has the right to do that, or to encourage others to do that.
By slicedlime, Tuesday, January 27, 2009 @ 12:23
Well, that’s the thing, isn’t it. You’re saying you dislike that people use this to justify piracy, while I’m not justifying piracy in any way. I’m simply interested in finding the business model that makes me the most money and makes customers happy.
Kneejerk reactions of “but they’re stealing my stuff” don’t really matter to me, if the end result is that:
1. People are happier.
2. The developer/artist/band/whatever makes more money.
The fact that people freeload is irrelevant in the above. To me, these are new times, new possibilities… so given 10 million customers out of which 10% pay me a dollar or 100,000 customers who each pay me five dollars, I’ll go with the first option.
History repeats itself, but the developments that happen still happen, regardless of how you try to prevent it. That’s why we still have printed books even though there was a strong movement to ban them, that’s why we have rental movies even though there were significant attempts at making them not happen. Trying to prevent file sharing from taking place is more like telling the tide to not come in rather than catching your local shoplifter. You can yell all you want as you stand on the shoreline, but the end result is still that you get wet.
And given that situation, I’d rather be the one selling the towels.
I’ve not anywhere argued that I think that just because NIN got rich by giving away stuff, it’s ok to grab whatever you want… now have I? What I am saying is that as creators of entertainment, this is the direction we should look to maximise our profit.
And in that way, your response clearly indicates my problem: No, you didnt insult me personally, but just because I argue for something that isn’t the traditional “call em all thieves” business model, I’m seen as arguing in favour of piracy.