Pay Per Use

I bought my first copy of Exile on Main St. in 1980 at Nuggets in Kenmore Square. It was played so much in the Lounge that I had to get a second vinyl copy in the mid 80s which I still own. Then when I got a digital music system, I bought Exile on CD and ripped it and put the mp3s on my music server. I am listening to those mp3s at this very moment.  Shake your hips babe!

I’ve paid a total of about $27 for these three copies of Exile. The first copy was sub $5 because I bought it used. The second copy was about $12. And the CD was about $10 on Amazon.

And I can tell you that I’ve listened to those 18 songs at least a thousand times, probably way more.

I paid more for my single copy of The 50 Greatest Love Songs by Elvis Presley which I think I’ve listened to once.

Here’s my point. The analog method of selling you music in a physical package which you can use to your heart’s desire is not artist friendly or consumer friendly. The Rolling Stones and their marketing partners should have been paid way more than $27 for my consumption of Exile on Main Street. And Elvis’ marketing partners should have been paid way less for my consumption of The 50 Greatest Love Songs.

Bill Erickson sent me an email last night suggesting I get a book called Out of Control by Kevin Kelly. This book was written in the mid 90s and is about what is to come in our society. I’ve added it to my books to read list on the right sidebar of this blog.

In Bill’s email he quotes from the book:

While contemplating the possible market for OOP objects that were sold on a "per use" plan, Cox uncovered the natural grain in networked intelligence: Let the copies flow, and pay per use. He says, "The premise is that copy protection is exactly the wrong idea for intangible, easily copied goods such as software. You want information-age goods to be freely distributed and freely acquired via whatever distribution means you want. You are positively encouraged to download software from networks, give copies to your friends, or send it as junk mail to people you’ve never met. Broadcast my software from satellites. Please!"

Cox adds (in echo of Peter Sprague, although surprisingly the two are unfamiliar with each other’s work), "This generosity is possible because the software is actually ‘meterware.’ It has strings attached that make revenue collection independent of how the software was distributed."

So back to Exile. We already have worked out what the price of on demand listens delivered over the Internet are. The service offering those listens pays the rights owner $0.01 per listen (a penny per listen). So at that rate, the Stones and their marketing partners would have been paid at least $180 for my consumption of Exile and Elvis’ marketing partners would have been paid less than $1. And I would have paid that $180 over a long period of time (almost 20 years). That sounds like a better deal for everyone.

Let’s go back to The Future of Media post for the four rules.

1 – Microchunk it – Put the songs out there in mp3 form. That’s a done deal.
2 – Free it – Get the damn DRM off of the music.
3 – Syndicate it – Let the music "flow freely"
4 – Monetize it – Track the listens and pay the royalites that are owed. Monetize via subscriptions or ads or both.

That’s the "free music" model I’ve been talking about in the past week. It’s going to happen and it’s good for everyone. Pay per use is way better than pay for packaging.

UPDATE: I went for a long bike ride after posting this. And I’m back sweaty but with some additional thoughts. Artists can and should continue to package their music up for collection. I hope that the arrival of ubiquitous free digital music delivered over the Internet will move the music marketers back to higher quality forms of music packaging for those of us who want to collect the music. Maybe vinyl makes a comeback. I sure hope so. I am having a terrible time finding a particular vinyl record for Tony and Jackson. And the digital files that are sold to collectors should be super high quality lossless formats like FLAC. MP3 should be relegated to the world of the internet where it belongs. If we are playing the music locally, there are many better choices.

#My Music#VC & Technology