October 04, 2007

The new music biz model rears its head again

I recall since the Napster days that the effective way to monetize music production (and maybe software production) in the future will be a capital market, where the dividends are "more software or music from this artist". This eliminates the need to monetize every single copy, something nearly impossible given how prevalent digital copying is (and should be).

Now, Radiohead is saying the price of their new album, digital or disc box, "is up to you"


Of course, this is only for the next few months, before traditional distribution kicks in. But it is telling.

What will be interesting here is how the whole free rider issue plays out. There's the traditional free riders, those who copy off of Torrents, Newsgroups, or a P2P network. The question is whether a new class of free riders will emerge to pay very little for a legitimate copy.

What's missing here, I think, are market indicators -- how much are other people paying? What's the bid spread? Prices will tend to converge, then.

Posted by stu at October 4, 2007 09:05 AM