Free Music
The music industry is growing. The record industry is not.
Seven years ago musicians derived two-thirds of their income, via record labels, from pre-recorded music, with the other 1/3 coming from concert tours, merchandise and endorsements. But today those proportions have been reversed. Concert-ticket sales in North America increased from $1.7 billion in 2000 to over $3.1 billion last year.
Pre-recorded music increasingly serves merely as a marketing tool for T-shirts and concert tickets. The best seats for The Police’s world tour this summer cost over $900; the group’s entire catalogue on CD costs less than $100.
Record labels have come up with a remedy: the “360° contract.” Instead of settling for a cut of CD sales, they increasingly offer artists broader contracts that encompass live music, merchandise and endorsement deals. Such deals, also known as multiple-rights or all-rights contracts, are particularly important in regions with rampant CD piracy, such as Africa, Asia and Latin America.
Free downloads have given music fans more money to spend on other things. And they have switched their spending from CDs to tickets and merchandise.
The logical conclusion is for artists to give away their music as a promotional tool.