A Response to SOPA: Free Pays(More)
January 30, 2012
Dante Cullari in Music Business Models, piracy, subscription

So as we know, if a song reaches a certain level of popularity these days, there’s pretty much a guarantee that someone, somewhere is going to pirate it. This is now a fact. Should it happen? Some say yes, and some say no, and there will probably never be a consensus. Regardless of the answer to that question, the unrelenting truth of the matter is that it DOES happen. The smartest response in this case then is to stop arguing about the should’s or the why’s, and simply accept the fact that this is happening. The ground is shifting below our feet, and we need to act or we will all get sucked under.

To me it seems pointless to even bring up the prospect of a subscription service, or even a pay-as-you-go model as a viable solution for a future sustainable industry model. This is because the internet, now the basis of content consumption, is like a huge river of information. A paywall is like a little pebble being thrown into it. The water in the river has no trouble getting around the pebble. Paywalls will never solve the piracy problem, and damming up the whole river, as we’ve seen with SOPA, will not be easy, and most likely will never happen.

Really though, I don’t think that the actual problem that the rights holders have with piracy is the copying, but rather it is the loss of revenue brought about by the copying that motivates the rights holders into action. They want to be rightly compensated for their work. Who wouldn’t? The problem is that the business model - the mechanism that they’ve chosen to help them receive compensation, is not only a little dated, but it has been proven ineffective in this new environment that is very different from the one we saw even 15 years ago.

The rights holders need a new mechanism for compensation. It’s that simple. Why they’re trying to preserve the one they have, I really don’t know. But the sooner they accept the fact that it is broken and it’s time to get a new one, the happier they will be.

So pay walls aren’t the answer. They won’t work in this environment. But if fans don’t pay, how then can the artists make money? This, it turns out, can be solved with a concept that has been around for about 4o years, with a little twist. It all starts with the long established Basic Cable ad revenue model. I can’t speak about before then, but in the early 90’s, you had something like 13 basic cable channels that any TV with an antenna could pick up, with no other wires or services required. The viewers would watch for free, but they were also being exposed to ads, and so the content providers on these 13 channels were still justly payed through ad revenue models.

This model worked okay, but it often times lead to media networks selling out to the point where they were willingly subjecting their viewers to incredibly interruptive messaging and breaks in programming, often at the most crucial times. This was not as serious of an issue for the rights holders however, because there was simply no alternative for their consumers to run to. Obviously, no longer is this the case.

So this is where the twist comes in. There needs to be a shift in advertising and marketing as it is practiced today. As Seth Godin so enthusiastically preaches, interruptive marketing is NOT the solution. The new cardinal rule of marketing should be: NEVER INTERRUPT THE CONENT THE AUDIENCE IS THERE TO EXPERIENCE. Think about it logically. The incentive for viewers or listeners to tune in is the content. When there are breaks in content, the incentives for viewers and listeners to stay are weakened, which creates the perfect opportunity for those offering uninterrupted alternative experiences that are also free, an opportunity that the internet community has never failed to capitalize on. The efficiency of the internet to provide alternatives makes any weakness in audience loyalty or incentives, a very dangerous thing for a rights holder.

But this does not have to be the end of advertising or ad-supported models, just perhaps the end of advertising as we know it today. There is in fact a new choice - a new way of marketing which will benefit all parties involved, and then some. Take a look at the Beat-Play ad model. 

So just like with basic cable, artists can give away their songs (preferably trackable streams) for free, in one place - say Facebook - and fans would no longer have to bother risking viruses on torrent websites because they could go right to the artist instead, in a more convenient and safe location. Then the artists, with the right tools, could (for the first time) track not only all of their fans, but all of their actual plays.

These analytics can then be used as leverage to negotiate the price of an artist’s ad space on Facebook. The more popular the music, meaning the more it’s being shared, the more money an artist could actually make.

The real difference maker here lies in the ads themselves though. No longer can the ads be obtrusive to the user’s experience. No longer can irrelevant messages be blared in your face seemingly at random. This, again, breaks down consumer incentives, and as Freakonomics has taught us, incentives are everything.

Instead of the advertisers taking something from the viewer or listener (their time), brands need to be willing to give something of value to their prospective customers. A great way to start is to sponsor the music or content that their demographics love and care about. This is an amazing PR move for brands. The fans would be getting their music for free, and they would (even if subconsciously) know who has provided it to them so easily.

As for integrating the brand into the user’s experience with the content, this is where the interactive media comes in, or what I like to call Smart Media. This is the Skrillex Mothership Invaders Game, or the Kelly Clarkson Fashion Showdown app. It could really be almost anything, as long as it fits into 1 of the following 4 categories: Interactive, Fun, Useful or Beautiful. If an ad does not fit one of these categories, and if it is not relevant to the artist or content, it threatens to weaken the chances for retaining an audience, and it could hurt the rights holders, the brands and even the fans.

The end goal of these ads is to actually add to the user’s experience. These ads should be designed so people will actually want to click on them and interact. This encourages authentic engagement with the brand. Mix that engagement with the already established cred from giving away the music for free, and you’ve finally got a reciprotive advertising model.

The end result – The artists release their music to the world, the fans consume and share it all they want for free, the advertisers tap into those fans and utilize the artist’s momentum for effective marketing. The rights holders get paid justly with full control over negotiations with brands, the brands gain significant cred amongst their demographics, which in theory, should boost sales, the fans gain a more relevant, more useful ad experience with no needed interruption, and they get all of the content that they could want in one simple and easily accessible location. Everybody wins, and the rights holders have the potential to make even more money with this free model than with their current one, because of the viral nature of content sharing and the ability to now directly correlate it to revenue potential.

All of a sudden this argument over piracy, or file sharing, seems incredibly useless and irrelevant. There is a solution laying here untouched that makes the sharing of the content a way more profitable prospect than the selling of it. It means a shift from monetizing song purchases to monetizing song plays! What an amazingly huge opportunity just lying in wait for rights holders, most of whom are too busy complaining about why their current business model is failing for them to notice.

So this is my message to rights holders - LET THE CONTENT BE FREE! In every sense of the phrase.

Now this does not mean that every artist should go out and start giving their music away for free right away, nor does it mean that they shouldn’t. Of course some artists may never want to give their music away at all, and that is okay. What it does mean is that we need more established platforms to track online content usage, make communications with advertisers easier, make access and management of content better for the consumers, and we need to establish standards that set important precedents for everyone, in order to optimize results with emerging solutions and models like the one proposed here. There needs to be better tools to organize and manage these solutions, which will be required to make a new system function. We, as a world community of content creators, need to unify, and get started in supporting one common platform that provides solutions for these needs, and something that most importantly syncs well with existing networks like Facebook and the various Mobile platforms where the biggest support already lies.

This is what I have spent the last 4 years of my life working on. As an independent artist who dropped out of college at 18 with no plan, and decided to pursue a career in music, I have been actively attempting to develop and design solutions that would make this new model of promotion and monetization for artists everywhere possible, especially for independent artists like myself. I am happy to say that we are closer than ever to realizing the very first steps towards this new, open and profitable environment, but we cannot do it without the support of the whole community. We cannot even attempt it if we are alone. We need contributions from everyone. Contributions of faith, action and unity.

We need to spread the word of a solution to the world, and then, maybe, people will forget all about this whole SOPA business. The bill may have been abandoned for now, but there is no doubt it will be back in some form in the future. The time is now for the community to forge solutions that make the prospect for these kinds of bills irrelevant, for everyone, as the ultimate protection.

Beat-Play is still undergoing many changes. Our platform is available now at Beatplay.com. We are releasing our newly redesigned interface (shown above) next month, and have plans for a mobile app in the next few months, along with increasing options for cultivating artist-to-brand relationships, and a lot more. Currently we support 100% unlimited and free music and video uploads. We also support the Youtube and Soundcloud API’s, which create some amazing opportunities for creating playlists between the two platforms that were not possible before. This is just the beginning.

We are focused on creating sustainable solutions for all pieces of the music industry business model - Promotion, Distribution, Monetization, Organization and Playback. There is of course no one solution that is right for everyone. There must be multiple options available for every aspect of the industry just mentioned. That is why we need to enlist the help of you, the music community, to provide the proper cultivation of these new solutions, and proper stewardship necessary to transform these amazing opportunities into full-blown sustainable solutions for the entertainment industry moving forward. Help us build a thriving and sustainable world music community. Please join our efforts. The solutions are in right our grasp, we just need to act.

Contact us anytime, we would love to talk, and we will be at MIDEM this week!

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Written by: Dante Cullari Founder & CEO Beat-Play, LLC

Article originally appeared on Music Think Tank (http://www.musicthinktank.com/).
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