Chris Anderson’s post today at The Long Tail is about the music industry and provides a really good analysis of what should be happening with music. Essentially, bands should give the music away for free and make their money on live shows. He explains:
Music as a digital product enjoys near-zero costs of production and distribution–classic abundance economics. When costs are near zero, you might as well make the price zero, too, something thousands of bands have figured out.
He points out that the average price for a ticket increased 8% last year, reflecting demand. Indeed the fastest growing part of the music industry is live performances, up 16% in 2006 in North America.
And don’t think that live shows are not profitable. They are extremely profitable for the artists, just not for the record labels. Chris includes a list of the top ten grossing touring bands of 2006 – and their numbers total a truly astounding $970.3 million.
I say – goodbye record labels, hello free music and awesome not-free shows!
Read: The Long Tail