There are a lot of people talking, about the advantages of using free sharing of music.
Dubbler has some great thoughts on why this should be done. In this post he sums up why musicians should be giving away theirs music for free.
Having read a lot of this kind of posts, I am left with one question:
How do I create a business model around free music?
As a response to this question, I created the following guidelines for setting up a business model around free music. At some point in the future, I would like to develop this into an eBook or a video for musicians.
In order to make it better, I would love to get your comments and ideas. Together we can create a guide for musicians who want to make money by giving away the recordings of their musical pieces.
Step 1: Everything goes
This guide is meant to take you through a thought process. The things that you talk about here do not necessarily happen, so I urge you to wait until later to judge whether these steps are too radical.
Step 2: What should I give away
Next step is figuring out how much to give away.
When talking to people about using freemium, I usually say that the free product should be of high quality. Giving away a 3 day test or 30 seconds of a track is not enough and does not do anything. In order to leverage the power of free recordings you need to give away a substantial bit. Nine Inch Nails gave away the 9 main numbers of their latest album for free!
The free product should be something that fans can use and send on to their friends. As a music fan I would not bother going to a webpage in order to download just 1or 2 tracks of an artist. Let alone send these to my friends.
Considering that mp3 files cost nothing to copy, regardless of whether 10 or 10 million people have a musical creation, it costs the musician the same. By releasing recordings for free, you can use this to your advantage and make money from other things than direct sale.
In order maximize the benefits of this; you need to give away something that people want to share. My recommendations would be to use a creative commons licence on all songs and let people download them freely.
3 What can we make money from
The point of making music freely available is not that the artist should not be paid. Not at all. The idea is that musicians can leverage the power of freely available music to make money in other areas.
Set aside all presumptions and do a brainstorm. Try not to judge the idea before or afterwards. When brainstorming the different ways that you can make money because of your free music, here are a few ideas to get you started:
a. Selling CDs
b. Voluntary donations
c. Selling downloads of extra material
d. Selling deluxe content
e. Selling concerts
f. Selling merchandise
g. Being sponsored by companies
It is always good to get inspiration and learn from others. On the freemium wiki, I have created a page with ideas and examples. Here you can find examples of the ways other people make money form freely available music. You can also upload your own ideas and experiences.
4 Fiddle with the numbers
It is easier to figure out how much you would make, if you only sell CDs and downloads on ITunes.
If you provide free mp3s and make more in 7 different ways, it can be a bit harder to calculate your earnings. Download the Conversion Calculator and experiment with the numbers. Ask yourself how many of the people who downloaded your album would need to buy something, before you make money.
5 Tell people about it
“When the supply of one product increases, the demand for its complimentary products increases”
One place you can see this principle is with iPods. The more people that have iPods, the more people buy iPod speakers, extra headphones and iPod protection covers.
This is the economical principle behind giving recordings away for free. More the people that have your music, more will be the people who want to buy concert tickets, merchandise and extra material CDs
Following this logic, it is in your interest to distribute your music as widely as possible. So instead of trying to stop people from downloading your stuff, downloading is actually what you want them to do.
So in order to make your model successful, you have to spread the word.
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