Can the Scourge of the Free be Eliminated with Entrepreneurship?

Ever since the World awoke itself to Napster, commercialising music has never been the same. The basic premise: why pay for something when one can get it for free? Major labels were hopping mad that they could not achieve the exorbitant 80s and 90s profits from pure physical album sales; Artist rights associations like the RIAA and COMPASS here in Singapore were hopping mad that the mass market was doing something that was tantamount to stealing and that there was not much anybody could do about it.

Fast forward 12 years after Napster blew up in our faces, and we still are not doing any better. Ok, maybe a little better. iTunes has made a tidy number of billions since it started; and the success of other innovative music services like Spotify and Pandora radio in the West are showing the World that yes, music can still be monetised successfully. However, the Scourge of the Free still remains: if the RIAA is to be believed, there is a whole lot more money being lost through music piracy. Singapore is not unaffected by this: according to this list, we lost US$4.3m last year due to music piracy.

The thought has been mulling in my head recently: how can we overturn the Scourge of the Free? Is it too almighty a task? I am proud to say that a large majority of my music collection comes from physical CDs and paid digital downloads. I might be called stupid in modern society, but I believe that you should get paid for the work you do, be it musician, film-maker or entrepreneur. Can digital entrepreneurship do anything to alleviate this loophole in the economic system?

There is good news to be had though. Prof mentioned the rise (and fall) or digital music stores in Asia. Soundbuzz was not Asia’s last hope; the mobile carriers are entering the market with their own digital music stores as well, as this (of all places) Hardware Zone tech commentary piece pointed out.  I just downloaded Singtel’s AMPed, all excited about using it ……to find that it doesn’t support my phone. Bummer. But at least it is a start. With Nokia’s store and Blackberry’s incoming music store as well, the mobile carriers have figured out one crucial thing that made the combination of iTunes-iPod-iPhone so wicked: seamless accessibility. The convenience one had in transferring songs from iTunes to iPhone/iPod lowered switching costs if you were thinking of changing from another mp3 player or phone. From computer to mobile device, you had your music collection on the go.

The real question is whether these music stores will even make any dent in the battle against the Scourge of the Free. It’s also a question for entrepreneurs who are interested in the music business: how can one even go into the business to provide a good service if the dominant model is one of theft? Perhaps the new subcription models of Spotify, Pandora and Rdio are a key to the answer.

Typing this post has raised more questions rather than actually clarifying anything. If at all, I hope I have at least provided some food for thought on the struggles for entrepreneurs who want to do something in digital music. It’s an uphill battle against the Scourge of the Free.

Peace and Beer
Josh  Q

3 thoughts on “Can the Scourge of the Free be Eliminated with Entrepreneurship?

  1. Thanks for sharing your thoughts Josh!

    In European and North American region, I believe the current trends toward subscription model,such as Spotify and Pandora’s offerings help to achieve a balance between low cost consumption and make sure the legitimate revenue for artists. In Asia, however, similar services like douban.fm, 1q84 and xiami.com still provide free music for their users. Instead of a subscription model, they use revenues from advtising to compensate for the artists.

    After Baidu’s IPO, it provides less and less free downloads for users outside China, and instead, it provides links to legitimate online music shops. Although it is a long time battle to fight against piracy, the future may not necessarily being pessimistic, at least we have seen some improvements.

  2. “The convenience one had in transferring songs from iTunes to iPhone/iPod lowered switching costs if you were thinking of changing from another mp3 player or phone.”

    I’m not quite agree with you on this sentence, even through the convenience may attract consumers to switch, the switching cost is not affected by this perception in my opinion.

    Cheers!

  3. There’s one thing that really puzzles me, since iTunes and other subscription based business models are slowly taking the music retailing market, why couldn’t they enter the Asian market? For so long iTunes is not available in Asia (except Japan), and their argument is that the piracy is too prevalent to be of any profit. However not entering the market isn’t itself forcing millions who are willing to pay and use the convenient service into forced piracy? Just something I thought of when reading.

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