MADE

I dug up this neat little blog post on Chris Anderson’s blog today. Chris Anderson, if you don’t know him, is the editor of Wired magazine. He’s famous for writing a book several years ago called The Long Tail about how the Internet is devastating the hits-based business model that old-style media companies like record labels used to depend on to make most of their money. Other than washed out label execs and radio stations, nobody really cares about the Top 40 in music anymore because there’s so much good music at your fingertips now. That’s the Long Tail in action.

Chris Anderson links to an interesting paper written by a Harvard PhD student back in 2005 on the economics of P2P file-sharing. I won’t even bother linking to it because I know that nobody reads dense academic papers online. I’ll just summarize the interesting and relevant points for you and keep it simple. First off, take a look at this little graph below. Think of the left side of it as Top 40 music and the right side as all the other music out there that people like yourself are producing. The stuff in the orange part of the arrow is less popular, but there’s a hell of a lot of it out there. It’s stuff like all the obscure music out there that will never go mainstream, but that might be real good. The closer you get to the left side of the graph, the more visible your music is.

If you don’t get this graph, I’ve summarized what all of this means for you down below so you can come away with something useful for yourself.

Blackburn wanted to find out what would happen to music sales if file trading were reduced by just 30%. Here’s one excerpt from the paper that kind of blows my mind:

…In this counterfactual world with 30% less file sharing, the lower 75% of the distribution of sales is shifted further to the left, while the top of the distribution increases its sales. This is what should be expected given the estimates from above. Artists who are unknown, and thus most helped by file sharing, are those artists who sell relatively few albums, whereas artists who are harmed by file sharing and thus gain from its removal, the popular ones, are the artists whose sales are relatively high…

In a nutshell, what Blackburn is saying is that if you’re a big name artist like Jay Z, file sharing hurts you. If you’re an unknown artist like the rest of us, file sharing is likely to help you. You can bet your cousin Jimmy’s lunch money that P2P file sharing isn’t going to dissappear. More and more people do it each year. The moral of the story is that the average music artist should absolutely embrace people wanting to download their music for free because it has the potential to lead to increased album sales down the road. People who download are fans. It doesn’t really pay off to be a big name artist anymore because there are too many forces working against you.