Stopping piracy: How ultracheap downloads could save the music industry

Justin Timberlake made news last month by stating the obvious. When the multiplatinum-selling recording artist was asked about the irony of his playing Napster founder Sean Parker in The Social Network, he spoke a truth about illegal downloading that, apparently, many found shocking. "I probably would have done it myself," he said.

That's the problem with the global record industry's battle against online pirates: Practically everyone under 30 is one. The industry tries to paint these fans as criminals, but its charge carries the moral heft of a speeding ticket — especially considering its long history of unsavory business practices. And good luck changing global mores when even Timberlake will admit he'd be a pirate.

But the widespread availability of free music isn't necessarily a good thing. In a world where an estimated 80 percent of all music downloads are illegal ones, artists — never mind labels and managers — simply can't rely on selling records to pay rent. Live shows can make up some of the difference, but there are only so many times a year that fans will pay to see artists they like. This summer, punk legend Ted Leo — who releases records on Matador, a top-shelf indie label — announced to the horror of his fans that he may retire from music full time, owing to flagging album sales. Now 40, Leo realized that touring constantly and selling fewer and fewer $10 CDs won't make for a pleasant lifestyle long term.

A couple weeks ago, former Warner Music executive Rob Dickins suggested what could be a partial solution for this: selling digital album downloads at superlow prices, say $1 or $3. At this price, fans would no longer bother pirating albums. He predicted that drastically lower prices would cause sales volumes to skyrocket,with big releases selling 200 million copies. (Last year, the highest-selling album in the world, Susan Boyle's I Dreamed a Dream, sold 8 million.) Meanwhile, dedicated fans (and older listeners who still buy CDs) would continue to pay higher prices for deluxe packaging and/or top-quality vinyl, helping artists recoup some of the difference.

Predictably, Dickins' idea was met with huge skepticism from the music industry. But we can easily dismiss the argument that selling an album for less than the price of a cup of coffee would devalue the "art" of the music. While older fans may associate quality with cost, the younger fans who buy digital albums clearly don't. If they did, artists who give away free MP3s and whose albums are available on file-sharing sites would be looked down upon — but they aren't.

There's evidence that lower download prices can fuel a boost in sales. When big-name indie-rock band Arcade Fire released its third album earlier this summer, Amazon sold downloads for $4 — a move widely credited with helping the band shove aside Eminem to reach No. 1 on Billboard. Although Amazon did not release how many digital copies it sold, 62 percent of the album's sales that week were paid downloads.

But Amazon was selling those downloads for one week at a loss, and therein lies one problem with the cheap download: Small label owners who don't have a blockbuster band like Arcade Fire on their rosters say it won't help them one bit. And industry advocates I spoke with from the Recording Academy said the Arcade Fire album wouldn't have sold as well if all album downloads were $4.

When I asked about the idea of $1 albums, Cory Brown, owner of small Bay Area indie label Absolutely Kosher, called it "an asinine, let-them-eat-cake kind of comment." Earlier this year, Brown fired up his own panacea. His "I Buy Music" campaign of stickers and T-shirts aims to instill pride in record buyers for supporting artists and labels. Recently, big indie names like Sub Pop and the Beggars group of labels picked up on this, and ordered shirts from Brown to give away at a major independent music conference in New York.

As for the cheap downloads, Brown says the economics simply don't work out for a small house, even if sales were multiplied by the same amount that prices were decreased. He also disputes the basic notion that lower prices would fuel more sales: "I don't think it's a question of people spending nothing versus people spending $2," he says. "If people can get it for free, and that's a choice they've rationalized to themselves, I don't see any price point making a difference."

I respectfully disagree. The $2 album might not stop piracy, but would drastically reduce many listeners' inclination to search online for the music they want, then risk downloading an MP3 of potentially horrendous quality. And while the Recording Academy argues that services such as Pandora and Rhapsody are the future, those won't satisfy fans who want their own copies of the music they love, but not at current prices. Brown's campaign is also a great idea, and fans should be proud that they support independent artists financially. But I can't imagine casual Eminem or Shakira listeners boasting that they helped a megastar buy another Bentley.

Nearly all the music fans I know, no matter their age —even those who own independent local record stores —explore new music by downloading it for free. Many of them also go out and buy that music on CD or vinyl if they decide they like it. Dickins' $1 or $3 albums would almost certainly change that behavior by lowering the cost of exploration. Yes, artists would make less money from each sale. But right now they're not getting a cent from most downloads. At the very least, the idea is an encouraging sign that instead of trying to halt the reality of free downloading, the industry is realizing it may have to compete with it.

 
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