After Napster Part 2
Music on the Internet: Free Ride Case Studies
This story isn't about Napster. Not entirely, anyway. It's about a practice Napster made very convenient: not paying for music.
At its peak in February 2001, more than 17 million Internet users were logging onto Napster servers and "trading" (downloading) compressed music files known as MP3s, while not paying a cent to anyone for the ability to do so. Not to the company supplying the technology and infrastructure, not to the record labels owning the rights to said music, and not to the musicians who made it.
And yet, somebody had to pay. All those computer servers aren't free. Napster, for its part, had millions of dollars of venture capital poured into it. Investors paid. So did the artists whose copyrighted material was traded without them ever seeing a dime from the exchange. In fact, it can be said that they more than anyone footed the bill for Napster's innovation. What impact did Napster have on them?
Here are three stories to answer that question. One is intuitive, another is counterintuitive, and the third is about Radiohead -- because the kids love Radiohead.
The Recording Industry Association of America cites a polling of 2,555 college students by the Field Research Corporation as demonstrating "a direct correlation between Napster use and decreased CD sales." Language of the study itself, however, only "suggested" Napster displaces CD sales. Moreover, the CD-buying population isn't composed solely of college kids.
Still, the RIAA went after Napster, because as it claimed in a May 2000 press release, "Napster isn't only causing irreparable harm to plaintiffs and the entire music industry, but to the perceived value of copyrights as well." Eventually, the RIAA successfully lobbied a U.S. district court to issue an order for Napster to stop the exchange of copyrighted material on its servers.
The question is does anyone know for sure their album sales were diminished by Napster? While no statistical evidence exists, that's not a rhetorical question, because if anyone was hurt by Napster, it might well have been Austin's Dynamite Hack. George Couri, the band's manager, has no doubt.
"I felt there was a negative effect on record sales from Napster for sure," asserts Couri.
In mid-May of 2000, Dynamite Hack had the most-requested song in the country with its Caucasian-slacker take on NWA's "Boyz-N-the Hood," besting even Eminem, whose "The Real Slim Shady" went to radio at almost the exact same time. Understandably, the Hack was expecting to sell well right out of the gate.
"A week before our record actually hit stores," remembers Couri, "when kids had been hearing the song for six weeks, seeing it on [TV show] Farmclub, and the whole thing had gotten whipped up, we were saying, 'Wow, we're going to have a good first week.'"
Couri estimated the band would sell 45,000 units those first seven days. That number wasn't pulled out of the ether, either. Before the national debut of Superfast, Dynamite Hack had been servicing the album to radio and retail themselves in Austin and Dallas, and was selling 1,100 units a week in those markets. With 50 major markets and kids being the same pretty much everywhere -- plus better distribution -- Couri expected the band to sell what they had in Austin and Dallas in the other 48 markets.
"Then when it comes out, even though we had a really good first week for a new artist, it was at 18,000," says Couri. "So we thought, 'Huh, that's great, but having done the math, we would have figured it would have been at least 30,000.'
"Then we looked into Napster, some people at the label looked into it, and we heard that 'Boyz-N-the Hood' was a very, very actively traded song. I think it was the kind of song that was so catchy that kids wanted to hear it right away. And when you want to hear it right away, what's the fastest way to do that? Go to your computer, and get it. And that satiates their appetite for that really funny song they wanted to hear over and over again."
The timing couldn't have been worse, as it turns out, because the week before the album's release, MTV aired a two-hour special on Napster enough times to ensure that any teen who didn't already know about the service would now be scrambling to their computers.
"So, just as everyone had the option to go out and buy our CD, they realized they could get the funny, quirky song for free," laments Couri.
Moreover, "Boys-N-the Hood" wasn't like the rest of Superfast, meaning those in search of the "quirky, funny song" could get their song off the Internet and save themselves $17 for the full album. It was RIAA's worst-case scenario.
Ironically enough, by the time the album was released in May, Napster had already hit its user peak and was starting down the other side of the bell curve. In February 2001, the site reported a high of nearly 17 million users. After a March 5 injunction forced Napster to block the trading of copyrighted material, use plummeted.
According to Jupiter Media Metrix, two months later, the number of users had fallen to 10.9 million. Even that number may be high, as it accounts for browsers who logged on, found the songs they wanted no longer available, and left empty handed. By July, Internet music news source Webnoize estimated the file-swapping drop-off at a hefty 86%, a more accurate reflection of how much activity had declined.
With Web browsers no longer stealing copyrighted material off the Internet, retail sales of music should have been up, right? That's what the RIAA would probably hope. According to SoundScan, however, CD sales from January to March were actually up 5.6% from the previous year. Starting March 5, the day Napster had its plug pulled, until the second week of June, sales were down 0.9% from 2000 figures. Oops.
Since the figures don't quite corroborate the RIAA's assertion that Napster undermines the whole of the music business, it turns out there are other factors to consider in this case. Maybe, just maybe, the whole thing isn't so black and white. Maybe it's green and white.
College radio deejays circa 1990 and witnesses to the embryonic days of alternative radio might remember a band from Scarsdale, New York, called Too Much Joy. They made several good albums, both indie and major-label, and even got some radio play. Then, like legions of acts before them, they stopped without ever having become superstars and got on with their lives.
Too Much Joy
Now, they have a Web site, sayhername.com (it comes from a lyric). Big deal, right? Well, consider that they have a Web site where they give away their entire back catalog. Everything they ever recorded. Free.
"And I made more money off the site in one day than I ever did selling records for labels," says Tim Quirk, the band's singer and guitarist.
In reality, that's not as an amazing a feat as it sounds, because Too Much Joy, like most bands, never made a dime selling albums. They sold thousands, but it was never enough to pay the labels back for the recoupable expenses the band racked up during the recording process. So the second they made a dime on the Web site, they literally made their first dime in sales. How do you make money giving stuff away? Well, that's the million-dollar question now isn't it? Correction: million-dollar answer.
For Quirk, the way it works is that the Too Much Joy site has a "patron of the arts" icon where passers-through are welcome to donate money to the band via PayPal, an Internet payment service popularized on eBay.
"Everything on the site is free," asserts Quirk. "You're welcome to take [the music] and run away. I don't give a damn. But if you want to support us, you can contribute to the fund."
Quirk acknowledges the band is only making in the thousands of dollars, roughly $10,000 to be precise, but that's sufficient for the purpose of the site. And the site does have a purpose.
Too Much Joy doesn't really exist in an active sense, but Quirk and Jay Blumenfield, TMJ's other guitarist, have started recording again under the name Wonderlick, and they pay for it with the money that patrons donate (see accompanying article). Through sayhername.com, Quirk and Blumenfield post a new Wonderlick song as a free MP3 each month. That's the goal, at least; a peek at the site shows they're currently a song or two behind.
"I'm not sending my daughter to college this way," explains Quirk. "What I'm doing is financing the recording of new material, and at the end of the year, I will have at least broken even. I'll have 12 new songs -- an album's worth of new material -- that I own free and clear."
Not bad for a bunch of has-beens, huh?
Certain things about Too Much Joy's situation might make it impractical as a strategy for college kids just starting a band. First, they all have normal lives and day jobs. They don't need that money to survive. Also, they did have a run on Giant Records, a Warner Bros. imprint. With that came Warner Bros. money and Warner marketing power, which helped the band gain their fan base in the first place. They don't have to spend big bucks getting people to know who they are. The latter point is an argument Quirk has heard before as to why this may work for him, but isn't feasible for others. He has a response.
"We went up the normal way that it was supposed to work," he notes. "We put out our own record, got a little bit of college radio airplay. We used that to get an indie deal. Put that out, toured a little bit more, had more people buy the record, got more college airplay and a little bit of commercial airplay, made a video and got it on MTV after midnight.
"That attracted the attention of the major label, which swooped down and got us on MTV in the middle of the day and got us on a lot more commercial radio stations. But we had done commercial radio, and we had MTV without the major label. What happened was we totally spiked up from having 10,000 fans to having 100,000 fans.
"But that spike disappeared the second they pulled their support, and we were off the radio. So basically, Warner Bros. didn't get me my audience. Warner Bros. got me a spike in my audience that disappeared as soon as Warner Bros. did."
Great. But who cares about Too Much Joy, except for maybe those 10,000 fans still floating around? Plus, they have nothing to lose by giving their stuff away. So what about a band that did have something to lose, some act that's enormously popular as well as critically and commercially successful?
In what had to be one of the worst-kept secrets ever, all the tracks to Radiohead's recent release, Amnesiac, were available for download as MP3s off a fan's Holland-based Web site, ateaseweb.com. Adriaan Pels, who runs the site, acknowledges he put the tracks up without either the band's consent or their label Capitol's, but claims it didn't impact sales.
"I don't think it hurt the band in any way," claims Pels. "I guess it kind of helped the band. And I think Web sites like mine keep the fans connected with the band and other fans. It's basically a lot of free promotion for the band. I think all Radiohead fans bought the actual CD on its release date. Radiohead is more than that disc of music. It's also the artwork. I didn't feel that I had an influence on the sales. If I did, it's because they probably sold more."
The tracks were up on the site in March for a record that had a release date for the first week of June. When Amnesiac finally hit the shelves, it debuted at No. 2 on the Billboard charts with over 230,000 copies sold. Maybe Pels is right.
After all, he also had all the tracks for Kid A prior to its release date in October 2000, but he decided not to post those to his site. Kid A sold fewer copies -- a little over 200,000 -- than Amnesiac in its first week on the shelves.
Certainly, a number of factors go into sales, and it would be nearly impossible to measure whether one person's site made a difference. The small irony here is that for Amnesiac, Capitol Records also did a giveaway of sorts prior to the release of the album.
Using a tiny little application called iBlip and a network of fan and radio-station Web sites, Capitol allowed people to not only stream the entire Amnesiac album, but pass it along to their friends (not the album itself, but the iBlip that let you stream it). According to Robin Bechtel, head of New Media at Capitol Records, the promotion was wildly successful. The iBlip had a click-through rate of 167%, compared to about .05% for banner ads, and between 5%-11% for viral marketing campaigns.
"How do you have a rate greater than 100%?" asks Bechtel. "Because people would pass it on to two to three friends on average.
"What we found through our marketing on the Web is that if people get to hear it and they like it, they're going to buy it. On Kid A and this record, kids wanted a copy of the CD early, but they also went and bought it, because Radiohead fans are die-hard, and they want the booklet and the artwork, and they want to own that record."
Hmm. That sounds suspiciously similar to Pels' comments, and suspiciously contrary to the RIAA's general position in its assault against Napster and the "file sharing" of copyrighted works in general. Funny, then, that on April 20, the RIAA sent Pels' Web site host service a letter instructing them to inform Pels to remove the links to the Amnesiac MP3s from his site immediately. He complied.
Radiohead is going to sell hundreds of thousand of albums out of the gate with or without the free music, so what's the point, right? Sure, circumstances might point to Dynamite Hack having been burned somewhat, but there's no evidence that proves Napster hurt record sales. There is evidence, however, suggesting that the decline of Napster might have contributed to a slowing of sales. It accompanied it, at the very least. Point is, maybe free music isn't the bugaboo the RIAA or some artists might think.
"There were four years when we didn't have a record contract," says Quirk. "We were recording all the time, we just didn't have a way of getting it out to people. I would love -- love, love, love -- to be a baby band just starting out and have these tools at my disposal, because everything I'm doing right now, the $10,000 we've made, has been done literally sitting on my ass."
Giving away music for free might not mean musicians have to alter their business model to that of selling T-shirts to make ends meet. It can be used promotionally in conjunction with sales, or it can be used promotionally by itself with a little faith that people who take it and like it will cough up some dough because they know it's your work. That's a big leap of faith to make, probably a little too big for many musicians and artists. But it is being done, if only by a couple of has-beens.