Response to “Giving It Away: A Call For Ideas”

I came across a blog post from Digital Audio Insider via my Google Reader this morning. David Harrell was asking for advice and ideas on his band The Layaway’s plan to release their new album as a free download. I felt the need to post a comment and it became so long-winded I thought I might re-post it here as a blog entry! So here it is….
The original blog post is located Here

“I really think that giving away your music for free as a business model is only really viable for established acts with a broad and loyal fanbase already in place.
When Prince gave away Planet Earth in the Mail On Sunday, you have to take into consideration that
1. He has already sold millions of albums and has an extensive and still popular back catalogue which will still be bringing in considerable revenue
2. He was about to embark on a month-long residency at the O2 in Greenwich which, I believe, was pretty much already sold out; again generating huge amounts of money.
Artists like Prince, NIN and Radiohead probably make a very small percentage of their income from selling their newest album. By the time the album has recouped it’s costs (and for artists at this level I would presume these costs would be considerable), there really would not be a massive profit margin. These artists would more than likely be earning the bulk of their income from touring, publishing and royalties.
Relatively new acts would have none of this financial security and therefore the act of giving away a new album would be like taking £10k (or whatever the recording costs may be) and burning it in the street. Obviously, some people will download anything if it is free. But are these people going to come to your shows or buy your back catalogue? Probably not.
I would say that the free download model works best when aimed squarely at an established fanbase. I particularly like the model exemplified by artists on sites such as Reverb Nation. Certain artists have made specific tracks (or sometimes albums) available to their ‘fans’ as exclusive downloads. All users have to do in order to access these downloads is add their name to the artist’s mailing list. In the current music industry climate (with the spread of piracy and P2P file-sharing), artists need to build up this kind of interactive relationship with their audience more than ever.
So in response to your question, whilst I don’t think that giving away your new album is necessarily a wise move right now, using this as a direct marketing ploy to gather a more comprehensive mailing list may well prove far more valuable in the long run compared to what could have been earned from physical sales of the album…?”