After having a read through the PRS report that has been causing a bit of a stir, I find myself feeling mildly uneasy with the implications. Although the authors – and I’m thankful for it – end with a declaration that blindly rallying against P2P is probably not the most rational course of action for the music biz, the implied statements about the future role of P2P worries me.
The crux of the article appears to be around the refuting of the theory of ‘long-tail’ economics. Standard economics works on a system where you will bring out a small range of products and sell many of them. Long-tail economics is an idea from Wired’s Chris Anderson and presents the notion that with Digital Distribution and the increasing ability to provide huge archives of music for little cost, it may be that we are moving to an economics where there are no ‘hits’ but that distributors would sell a small amount of many products.
The report’s authors Page & Garland claim that based on their surveys of both legal and illegal digital music markets, the fact of the matter is that there is still a propensity for ‘hits’. They claim that in the legal market 90% of the revenue is generated by as little as 5% of the product. In the illegal market this rises slightly with 80% of the transfers being comprised of only 5% of the available material. In both markets we have ‘hits’ and then the rest. Due to the apparent similarity between the two markets, the authors curiously suggest that P2P networks could be successfully used for mainstream marketing, however independent artists are unlikely to succeed in such an environment.
Buried in the back of the report in the Appendix is this statement
Put more bluntly, the 10 million tracks that failed to find a buyer on the legal digital shelf have found (at least) a swapper in this illegal market. Many conclusions could be drawn from these observations, but here’s our preferred choice: If the sellers sell it,it might never be bought;but if the swappers offer it,at least one person will likely take it. It goes without saying however, that for the creator and artists watching their niche offerings being swapped a single time on P2P, this form of ‘freemium’ activity may not be paying for lunch.
Agreed, if you only ever get exposure to one person it’s unlikely that you’ll hit it big. However what seems to be the case from the earlier stats is that artists have a better chance of being distributed via P2P than they do via legal markets. 98% of all recording artists in the music industry are not attached to a major label, leaving 2% with the entire billion dollar music industry behind them. Is it really a surprise that they have a greater degree of exposure? What this study seems to ignore is the skew that such marketing can have on popularity and the value of the middle ground.
The top most shared and most bought music will always be comparable due to the amount of exposure a certain elite contingent of artists receive. There will also be a bottom group with no shares and no sales. However the middle ground is what matters for independent artists. If they can increase their exposure by a few thousand – a paltry sum for the big hitters – that may be the difference between obscurity and exposure.
The report also appears to be more favourable of free legal streaming services such as Spotify which offer large catalogues of music. Spotify in particular works a model of interspersing adverts between songs allowing them to collect revenue to pay the broadcast licence. Currently the ads are fairly sparse and unintrusive, making the experience rather enjoyable. However Zeropaid identifies a possible motive behind this report. With favourable statements regarding both the possibility of utilising the P2P environment for mainstream marketing and online streaming services it seems suspect that the PRS recently announced plans for two new online music licences, one for music download and subscription services, and one for streaming. The exact fees for streaming services are currently ‘under consideration’.
What this appears to be to me is further attempts to formalise and colonise the services that have arisen and solidified despite the industry’s efforts. The article on the BBC is a cleverly placed piece of self promotion that both normalises the idea of P2P (it no longer destroys the industry, it makes the big artists more popular) and also re-asserts the validity of the industry itself (indie artists should give up the P2P idea and accept that they need legitimate business).