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'Freeconomics' Fails To Hold For Music Biz

The Guardian's Helienne Lindvall is none too impressed by Wired Editor Chris Anderson's "freeconomics" theory, which will be outlined in his forthcoming book on the subject. After seeing Anderson's keynote at SXSW interactive, Lindvall says, "I was really hoping he would have the panacea he proclaims, but just as The Long Tail (his prior book) has its flaws, so does this one -- at least when it comes to music."

In fact, Anderson uses the music business in China as an example of how piracy creates celebrity, which in turn creates cash. "Chinese pop stars make money not off music sales, but from making personal appearances, starring in advertisements, etc," Anderson says.

It's not so easy, in fact, says Lindvall, who points out that, "touring is a loss-making venture until you can fill venues that hold a few thousand people or more. Then you can at least break even." Meanwhile, she adds that advertising hasn't been able to save newspapers or ad-supported music sites like SpiralFrog, which folded recently. Even YouTube, "a site that actually has people looking at the screen while listening to the music," can't afford to pay musicians more than what they're paying so far, which one musician claims is 6 pence for more than 10 million views. Says Lindvall, "either Chris Anderson's 'freeconomics' theory is faulty or Google, the owner of YouTube, is lying."

Read the whole story at The Guardian »

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