Something big is about to happen to music. “Peer-to-Peer” is about to become a good word for the music industry.
In the next month, Owjo, the company I work with, will launch a platform in cooperation with a major music label. This launch will mark the beginning of an experiment that will answer whether musicians can make money from the ‘long tail‘. Put simply, can a musician gather enough paying fans online to engage in a life of music-making without having to keep touring far in to his retirement years?
The retail of music has been in a sharp decline since the debut of MP3 as a piracy tool in 1996. Some optimists of the open culture / remix culture movement suggest that music piracy is not only inevitable but that it is to some extent desirable, since it will shock the record industry into some sort of new life. Many, including my piece “One Way to Save the Music Industry” in Business Week, have pointed at possible ways this could happen. Yet no one, so far as I know, has yet laid out a practical plan for how these new models can be operated in practice. In the absence of functioning models that enable musicians to make enough money to work, Kevin Kelly, founder of Wired Magazine, suggested that musicians needed to find “1,000 true fans” willing to spend $100 per annum to support their work. Jaron Lanier, one of the key thinkers of the digital world, embarked on a campaign to find out if this was happening. The answer he came up with was a sobering “no”.
In his excellent (essential) book, You are not a gadget, he asks “can 26,000 musicians each find 1,000 true fans? Or can 130,000 each find between 200 and 600 true fans? Furthermore, how long would be too long to wait for this to come about? Thirty years? Three hundred years? Is there anything wrong with enduring a few lost generations of musicians while we wait for the new solution to emerge?”
The answer, I hope, lies in what Owjo and its partner label are doing right now. I call our approach “Peer-to-Peer Retail”. It is going to fix what peer-to-peer file sharing broke.
The record label in question, which will be named in the music press following the launch, has developed a platform on which pre-deal musicians can engage fans. This concept is not new, though the particular slant that the label has taken is novel. What is new is that each band will enable its fans to not only vote for it, and to listen to and buy tracks and merchandise, but the bands will also use Owjo-powered stores to enable their fans to virally share the band’s own official store on fan’s own Facebook Walls.
To understand how potentially useful this is to bands it is important to understand how this sharing works. When a Facebook user shares an item that they like from a band’s official Facebook store the item then appears within a fully functioning store on the user’s own Wall. These new instances of the brand’s store also appear in the News Feed of the user’s friends on Facebook. According to Facebook’s statistics the average user has 130 friends. Therefore, each shared store appears not only on the Wall of the fan who shared it, but also in the News Feed of 130 friends. Each of these new points of sale functions identically to the original store, enabling users to browse the band’s albums, tracks, and merchandise. Fans can checkout in situ on the Wall or in the News Feed and can further share among their friends. And because Wall automatically buries news of least interest, only the most interesting and compelling stores will go viral. The design of the stores is unobtrusive, but sophisticated enough to not only enable sales and browsing though items, but also preview playback of tracks as well.
Here is how that might work for a band. Let’s say a band has 1,200 fans on Facebook. This is a modest number, but it shows that the band probably has played quite a few gigs, and picked up some solid support along the way. Now, lets say that when the band first launches on the platform I have described, a die-hard core of 5% of their fans immediately shares items from the band’s store on their own Facebook Walls. For example, one person shares a track, another shares a hoodie with the band’s logo, etc. 5% of the band’s 1,200 person strong fan base equals 60 people. So, new instances of the band’s store will appear on the Walls of 60 people on Facebook. Because each person has an average of 130 friends, these stores will appear in the Facebook News Feed of a further 7,800 people. Suddenly, a band with only 1,200 fans now is reaching 7,800 people at no cost or effort. And this reach can result in sales, because Facebook users who see the store in their News Feed or on their Wall can browse through the band’s entire catalog, and purchase directly from the store without being pushed off to another site.
Now, take this farther. Of the 7,300 people who see the band’s store a further 5% decide to share an item from it. This would create 390 new instances of the store on new walls across Facebook, and the store would be visible in a further 50,700 peoples’ News Feeds. These figures are remarkable, and perhaps 5% is overly optimistic. Lets say instead of 5% sharing, only 1% of the 7,300 people share. This would still expose 10,140 people to the band’s store, any one of whom can further share the store among their own friends.
So, a small band that decides to put its fans in control of its distribution could find that it has several thousand points of sale. Even if these only transacted $5 per month on average, the revenues generated for the band would be significant.
Owjo may be about to save Jaron Lanier’s “lost generation” of musicians, and put Kevin Kelly’s 1,000 True Fans in charge of distribution.
More on this after the launch.