[rumori] Re: pho: The Truth About File-Sharing

From: Don Joyce (djATwebbnet.com)
Date: Tue Jan 02 2001 - 18:45:42 PST

"It suggests that the Net may work best as a three-step process: first
connecting customers with culture, then generating interest in cultural and
informational offerings, then keeping track of their tastes through
sophisticated new digital marketing research. Theoretically, file-sharing
approaches could go beyond shopping to stimulate interest in education,
business, even politics, if the music experience is any indicator. And it
ought to be."

This is more or less the simple, effortless plan to increase the purchase
of music off-line which remains the very best, most lucrative place to sell
it. However, music commerce, never satisfied in simply trusting what is
taking care of itself, and even more unwilling to stop seeing the Net as a
Market place itself, apparently will remain unable not to spend a lot of
money on this anyway - namely, when all else fails, step three, which in my
opinion serves little or no useful purpose ON LINE when the only
significant sales are taking place off-line. It simply doesn't matter who's
doing what on a free Net unless there is some way to then force these users
into record stores AND make them think they are on line while there.
Generating interest in music on the Net is its own end in itself, is not
based on "purchase" modes of interest, and will not translate usefully or
predictably into specific store sales even as store sales do increase. The
Net is for casual amusement and casual discoveries, the record store is for
and will become even more for collecting already desired gems in ALL their

If the recording industry only understood what a free golden goose is afoot
on the Net in terms of free advertising for music in general and in
particular, and how they need do or spend NOTHING to benefit from it, just
letting it be is all that's required, their lives might seem a little
rosier than they do now as they toil mightily to limit, control, and
otherwise lock out, fence in, and "tailor" traffic on-line for supposedly
commercial purposes. Contrary to all of the above, this only serves to make
both music and the music biz that owns it look BAD, obsessed with the
habitual forms of manipulating our citizens into strictly consumer molds,
while simultaneously creating nothing that actually produces meaningful
profits there. (By "meaningful" I mean meaningful to them - something
necessarily in the range of millions per year)
NOTHING will even closely compare to a totally free Net for selling music
elsewhere. The Net is not designed to be a useful market for, and will
never be a lucrative market for IP. Neither time, space, nor supplies of
copys are limited in any way there and these conditions simply have to be
in co-existence to create a controlable "market" of any kind. That kind of
market DOES exist off-line so why can't they just sit back and enjoy the
increased business from a free Net?
Blinded by visions of sugar plums if you ask me...Greed is bad enough but
when it's based on little or no potential and then combined with a
determination to REMOVE what is already successfully popular, it's truly
pathetic, perhaps even deserving the term, "stupid greed."

>Posted on slashdot -
> http://slashdot.org/article.pl?sid=00/12/28/1653257&mode=thread
>Has accompanying discussion, etc. FYI.
>-- d
>The Truth About File-Sharing
>Posted by JonKatz on 08:45 AM January 2nd, 2001 from the
>-not-thieves-but-consumers- dept.
>A series of new studies of Napster users suggests everything you've been
>reading about music file-sharing systems is baloney. You're not thieves
>and pirates, it turns out, but marketing pioneers and music lovers quite
>willing to pay for music. These new stats suggest that file-sharing
>could have enormous implications for the selling of content, culture
>and information online, none grasped by dunder-headed corporations like
>the record labels. They are also a reminder not always to believe what
>you read. (Read more).
>According to the January issue of American Demographics, a magazine which
>hardly supports radical copyright-infringers, music sites like Napster
>have created "powerful new opportunities for music marketeers." Despite
>the best efforts of the greedy record companies and a few recording
>stars -- Metallica and Dr. Dre come readily to mind -- to alienate a
>new generation of music lovers, recent figures prove that file-sharing
>services actually generate sales and put more money in artists' pockets.
>This has enormous implications for those making movies, publishing books,
>or creating any kind of saleable entertainment. It suggests that the
>Net may work best as a three-step process: first connecting customers
>with culture, then generating interest in cultural and informational
>offerings, then keeping track of their tastes through sophisticated
>new digital marketing research. Theoretically, file-sharing approaches
>could go beyond shopping to stimulate interest in education, business,
>even politics, if the music experience is any indicator. And it sure
>ought to be.
>The relationship between new decentralized software programs -- Napster,
>Freenet, Gnutella, P2P -- and such issues as copyright infringement,
>artists rights and conventional retailing is complicated. Legal,
>political, educational and other institutions haven't begun to sort
>through them. But clearly the music industry's panicky and greedy
>overreaction will prove one of the most dunder-headed, short-sighted
>responses in recent business history. The industry couldn't have been
>more off-base, dishonest or greedy.
>Nearly 75 percent of college students have downloaded music from the
>Net, 58 percent of them using Napster, according to a recent study by
>Greenfield Online, a Connecticut research firm, and YouthStream Media
>Networks. Nearly two-thirds of the 1,135 college students surveyed
>say they download music as a way to sample music before buying it. The
>proliferation of online music is introducing consumes to artists they
>don't know, in almost precisely the same way department stores offer
>samples of food, perfume and other retail items. A survey by Yankelovich
>Partners for the Digital Media Association found that about half the
>music fans in the U.S. turn to look for artists they can't or don't hear
>in other venues, like radio. Nearly two-thirds of those who downloaded
>music from the Web say that their search ended in a music purchase. Music
>labels should have been donating money to Napster users, not threatening
>to sue them and chase the site off of college campuses.
>And the much-libeled Napster users are dedicated music buyers, quick
>to reach for their wallets. Jupiter Research says it found that 45 per
>cent of online music fans are more likely to have increased their music
>purchases than online fans who don't use Napster. The Jupiter study of
>Napster users found that 71 percent of users say they're willing to pay
>to download an entire album.
>Interestingly, reports American Demographics, the Jupiter Study of
>Napster users found that 71 percent of those who use the site said they
>were willing to pay to download an entire album. But in a Greenfield
>Online survey of 5,200 online music shoppers, nearly 70 per cent
>say that they have not paid -- and will not pay -- for digital music
>downloads. This suggests that subscription-based services may be more
>likely and successful than a per-song fee system.
>This potentially revolutionary model for marketing culture is about to be
>dismantled by the new partnership between Napster and Bertelsmann, which
>is giving the file-sharing site more than $50 million to develop software
>that will charge users for music. Bertelsmann says it will keep a part
>of Napster "free," but watch for yourself to see how quickly it shrinks.
>These figures, remarkably, demonstrate that almost every assumption
>about the free music movement, reported in most media outlets and used
>as justification for a wave of new legislation and legal action like
>the Digital Millenium Copyright Act, is dead wrong:
>Most music downloaders aren't thieves or pirates but music lovers willing
>to pay for music. Artists have made more money from this new generation
>of music lovers than they would have without them. The true significance
>of file-sharing wasn't an end to intellectual property, but an exciting
>new way to develop markets. Record companies and other corporations
>should be supporting file-sharing sites ratherthan hiring lobbyists and
>lawyers to intimidate, sue and enrage new and eager customers. College
>students have nearly universal access to broadband, and are tomorrow's
>mainstream consumers. The more information and culture they have
>access to, the likelier it is that they'll sample new venues, products
>and information. Evidently, file-sharing isn't a dangerous menace but
>an effective new method of disseminating -- and selling -- content,
>and culture. Aside from these new findings, the Napster experience also
>suggests that when it comes to dealing with the Net, businesses often
>have no idea what's good for them.
>And oh, yeah. Don't believe what you read about yourself.
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