A Manifesto For The Future Of Free Music

In the thankfully long gone days of DRM downloads it could be fairly said that ‘music was born free yet everywhere it is in chains’. Now it is free of DRM and, for most consumers, of price also. Of course the majority of consumers have always spent most of their time listening to music for free via TV or radio. But the internet transformed free into something that was every bit as good as the paid for product. So yes, most people have always listened to music for free most of the time, but they listened to what broadcasters decided they would listen to. In the old model free music was something that would sate the appetite of the passive fan but was not be enough for the dedicated fan. Free music thus very clearly played a ‘discovery’ role for the core music fans. On demand free though has changed the equation entirely. For many consumers the free stream is the destination not the discovery journey. So 50 million YouTube views is no longer a marketing success but instead x million lost sales or paid streams.

For younger consumers the picture is particularly stark. 56% stream for free, 65% listen to music radio and 76% watch YouTube music videos. Compare and contrast to over 25s where the rates are 35%, 47% and 76%.   In short, free is more likely to be something that drives spending among over 25s because it is predominately programmed while among under 25’s it is less likely to do so because it is on demand.

Free needs recalibrating. Here are a set of objectives to help fix free, a Manifesto for the Future of Free Music:

  • Set the objectives: One of the problems with free is there is too little clarity around what purpose it is meant to serve. And this is because it is simultaneously serving multiple purposes: to monetize the masses (ad supported), to drive sales (discovery), to drive subscriptions (freemium). All three are worthy goals but unchecked each one also competes with the other. A consistent industry vision is needed.
  • Programme more: Free has a massive role to play in digital music, but it needs to better targeted. A super engaged music fan should not be able to sate their on demand appetite on free. In short, free music needs to be less on demand and more programmed. That is not to say YouTube or Soundcloud need to become Pandora, but they do need to explore meeting somewhere midway.
  • Use data to segment: It is not enough to simply say users can choose between different services, they services need to better use their data to determine who gets what experience within them. Someone who watches 20 YouTube music videos a day is clearly a target for a Music Key subscription. That person should not just be marketed Music Key, s/he should also have their free experience progressively dialled down to push them towards it.
  • Fix the models: Pandora is a highly viable ad business that happens to have a radio service built on it. There is a world of difference between Pandora’s ad business and Spotify’s. Spotify’s deals with the rights holders essentially preclude it from making free a viable business, which is fair enough. But it does create the unfortunate vicious circle of there never being a case for Spotify investing enough in ad sales infrastructure to drive up CPMs enough to boost ad supported revenue. Labels and publishers need to think hard about what tweaks may need to be made to business models if they want freemium services to be strong enough financially to drive a vibrant subscription market. Not fixing the models will only skew the market to the companies with ulterior business models who can afford to perpetually lose money on free.
  • Don’t give up on free fans: A generation weaned on free music will grow up craving more free music. Just because free dominates younger consumers’ digital lexicon now does not mean that it will inherently always do so. Don’t give up on the lost generation of music consumers with the default position of free.
  • Strike the right balance: This is simultaneously the most important and most difficult part to get right. YouTube, Soundcloud and Spotify’s free tier are legal alternatives to piracy. Turn back the dial too much on the legal sources and illegal ones will flourish again. However the fact that more than a third of free streamers use stream ripper apps to turn streams into downloads means that the distinction between licensed and pirated has long since blurred. Nonetheless the balance needs to be better struck, probably somewhere equidistant between YouTube and Pandora. Ultimately it will require lots of real time honing and perfecting to get the right mix.

Free music will always be part of the equation and it has become a key part of the music industry’s armoury. But there is a difference between a controlled burn and an out of control forest fire. The freemium wars have already accounted for some high profile scalps and more controversy will follow. Free will remain a crucial part of the landscape but it is time for a reassessment of its role and that must encompass all elements of on demand free, not just Spotify.

10 thoughts on “A Manifesto For The Future Of Free Music

  1. I think one of the main problems the music biz has is it’s need to hold onto the notion that recorded music should still be something that people pay for. The consumers have spoken: recorded music should be free (or pretty close to it). Mark, you nailed it on the head a few years ago in “Getting Out of The Digital Music Impasse” speech: experiences are where the money is in music’s future.

    Give away all the recorded music! It just increases engagement and draws fans closer to the brand allowing the artist/label to sell experiences (concerts, limited editions, merch, special events, etc). A great example of an artist selling experiences can be found with Rick Springfield: http://www.rickspringfieldcruise.com/booking.html

  2. A number of good points that pivot around better strategic capabilities and underpinning within the music industry decision makers. Running out analysis on different business models and scenarios should have been done and should form ongoing work in the sector. Being always reactive rather proactive means you’re always chasing what might have been rather than acknowledging the likely outcome and steering your business accordingly. Greater proactive licensing of services is something we should all be pushing for. Majors labels have no incentive to help services gain traction when they can just sit back and take the advance and then not account the monies back to any of their stakeholders when the service fails to get off the ground or gain traction. We need passionate music executives and shareholders interested in more than their immediate bonus and pay packets to get the industry moving again for the majority of all stakeholders and not the minority.

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  7. i don’t know who wrote this article since their is no byline but i’ve got a real problem with this kind of thinking….i quote from the article….
    “Free music will always be part of the equation and it has become a key part of the music industry’s armoury.”
    i’d like to know if YOU would give away part of your work for free? do you do your job for part pay?
    and if you say yes, you do, then do you pay “part of your bills” with something other than money?
    i’d like to know, because i’d like to start doing that too. as i’m sure many of my
    other musician friends would who are trying to make a living doing there work.

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