Piracy vs. Obscurity

Tim Lee's got an awesome post about eMusic and its lack of DRM. I'm used to folks' jaws dropping when I tell them at seminars that they should not worry at all about people ripping off their albums. And, in fact, that piracy might be the best thing that could happen to them when it comes to building an audience. All of this makes sense when you understand that:

  • Album sales are the LEAST profitable revenue streams for working musicians.

  • Fans that already have your album are more likely to support you by purchasing other items (which are more profitable for you).

  • A fan sending your MP3 to ten of her friends accomplishes the same net result as about $100 in advertising. (I pull that figure from my a**, based on my experience with co-op retail and radio promotions -- I have seen labels spend $1,000 in advertising to sell 100 CDs, or less.)

Of course the major labels hate eMusic, and anything else that doesn't put more money in their pocket. If you're in the business of selling albums, you'd be silly not to. Labels that will survive will either muscle their way into alternate revenue streams, or they'll change their compensation model altogether. If Kodak and Fuji can shift gears and sell more memory cards than film without losing their core identities, Warner and EMI can look beyond CDs. If they can stop trying to lowball each other, that is.