Feb 26

Tim O'Reilly

Tim O'Reilly

"the free download isn't a frivolous act"

Peter Brantley writes: "harvey danger is releasing their newest album on the net, for free, and they have a well written essay on why -"

"We embark on this experiment with both enthusiasm and curiosity—and, ok, maybe a twinge of anxiety. Why are we doing this? The short answer is simply that we want a lot of people to hear the record.

"However, it’s important that people understand the free download concept isn’t a frivolous act. It’s a key part of our promotional campaign, along with radio and press promotion, live shows, and videos. It’s a bet that the resources of the Internet can make possible a new way for musicians to find their audience - and forge a meaningful artistic career built on support from cooperative, not adversarial, relationships.

"We realize that digital files are the primary means by which a huge segment of the population is exposed to new music; we also believe that plenty of music lovers in the world will buy a record once they’ve heard it - whether via radio or computer.

"We also believe there’s an inherent qualitative difference at work—not only between MP3s and CDs, but between clicking a mouse and finding a record on the shelves of a good record store. These experiences are not mutually exclusive - they’re interdependent facets of music fandom, and equally important considerations for a band in our position. "

I love that line "the free download concept isn’t a frivolous act. It’s a key part of our promotional campaign."

This is the same lesson that was learned years ago by free software authors. (See my 2001 essay for Nature, Information Wants to Be Valuable.) And in publishing, slashdot pointed a few days ago to a great essay about Baen's approach to free downloads of science-fiction novels.

The last time I wrote on this topic, in a blog entry pointing to my essay Piracy is Progressive Taxation, Nick Carr wrote provocatively in the comments:

"If these statements are entirely true, as I'm sure you believe them to be, then it follows that piracy is on balance a good thing from an economic perspective - that piracy increases overall sales in a market rather than decreasing them. If that is true - and correct me if I've misinterpreted your argument - then I don't understand why you, as a publisher, wouldn't allow free, unprotected try-it-before-you-buy-it downloads of every title you publish."
I replied:
"You ask a really good question, and I hope I can answer it to your satisfaction. It is indeed the logical endpoint of the argument, but it is not the whole argument. (See "There's more than one way to do it.") Maximizing economic benefit comes from a mix of many factors, and all seemingly similar situations are not in fact equal.

First off, for many types of publishing, I absolutely believe that giving away free copies is the best way to build the market. If I published works -- say fiction -- that users merely want rather than require, and for which there is practically an unlimited supply, then acquiring more visibility is critical. Cory Doctorow has used this technique quite effectively to become much more successful as a science fiction writer than he might otherwise have done.

Now, by contrast, consider many of the types of books I publish. They are already very well known to their limited target market, and some of them are unique goods (say the definitive book on perl, written by the creator of the language). Here, a different calculus might apply. Awareness is not the issue.

Would this argument hold water? Advertising is good for products. Therefore, why don't you spend all your revenue on advertising to increase demand? The oracle at Delphi said, "Nothing too much." Just because something is good doesn't mean that it's the only good.

I remember in Dune, Frank Herbert talked about the ecological "law of the minimum," that growth is limited by that necessary nutrient that is in shortest supply. Sometimes its awareness, sometimes it's conversion to paying customers.

A lot has to do with the ratio of possible consumers of the free product who might be converted to paying customers to the total market size. If I have awareness with .01% of the target market, giving copies away to raise awareness to 10% of the market, where 10% of those might convert (1% total) is a good deal. But if I have awareness with 60% of the target market, and give my product away, with a 10% conversion rate, I've lost a great deal.

That's why I said piracy was progressive taxation. If you have high awareness, my experience (from a number of experiments that I've reported on over the years) is that making copies available for free can reduce your market, but that if you start out with low awareness, it can enhance them.

Open source software is a great example. Projects start small, and use viral marketing to get sampled. Companies (say Red Hat with Linux) ride that wave of awareness and then introduce new products that monetize more limited access."

That's why "the free download isn't a frivolous act" is such a profound statement. We're still learning the science, if you will, of online promotion via viral distribution. We should be running lots of experiments -- experiments that we measure -- and sharing the results so that we can all learn what works, not just taking either redistribution or restriction as religion. I hope to change my mind and my business practices many times as we continue to learn about what works.

tags: web 2.0  | comments: 15   | Sphere It

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Comments: 15

  Jared Smith [02.26.07 05:54 AM]


I'm very interested in what you're saying here, and I was wondering if you'd respond in particular about some of the books that you've published under a more liberal license (such as the creative commons), and how you feel that's affected book sales. I'm obviously most interested in your take on sales of Asterisk: The Future of Telephony (as I'm one of the authors), which has sold amazingly well despite being freely available in PDF form under the Creative Commons license.

I realize this really isn't on the same vein as piracy, but I think the two topics are closely intertwined. Mind sharing your thoughts?


  Jason Berberich [02.26.07 06:35 AM]

One small detail: Harvey Danger released that album for free back in 2005. I wrote about it on my blog at the time.

I completely agree with your comments on this though.

- Jason

  Hazel Motes [02.26.07 07:41 AM]

If it did happen 18 months ago, I wonder how it all turned out for them? Were they happy with the experiment?

  V [02.26.07 08:39 AM]

Actually, I think that the word is much more complex, then you introduce it to us. (I think here also about your other related articles.) So, even in if now I can agree with you, and also in some other cases, I think it is good to see the situation in more depth.

Just a couple of ideas:
1. the first comers (almost) always win with beeing "nice guys". By this I mean that Harvey Danger will more probably profit from his initiative then the second similar guy, simply because he is not so nice, he just followed the "trend".
2. the users have customs, this is the same thing that you wrote in your Piracy is Progressive Taxation essay. This is another reason why the firstcomers will see different reactions, then later movers.
3. softwares are not books. Softwares induce both direct and indirect network effects, while only the best books have significant indirect network effects. For this reason that is Microsoft's profitmaximizing strategy to allow piracy for some users. (Read Joshua Slive and Bernhardt Dan, Pirated for Profit from, The Canadian Journal of Economics, 1998)

Basically all these ideas go against your 2nd point in Piracy is Progressive Taxation, and also put your actual article in a little bit different perspective.

  Jeremy James [02.26.07 09:36 AM]

Riffing off Tim's insights and what 'V' commented on, I have a question about releasing works of fiction for free...

I'm an author, still unpublished in novel form, working on the final draft of a work I feel very confident will find a home with a traditional print publisher.

My question for the forward thinking readers of this blog is: If a first-mover has an advantage--for instance Cory Doctorow releasing his science fiction books as free e-book downloads (acknowledging that he's probably not the first, just the guy I heard about first)--then would it be wise for an author such as myself to release works in progress on a serial basis? and to even encourage feedback from readers as I work on subsequent drafts of the manuscript?


  william [02.26.07 11:40 AM]

After reading an article (Steve Jobsí iTunes dance) by Cory Doctorow that can be found here

In particular I was struck by the following two paragraphs:

ìActions speak louder than words. Artists have asked ó begged ó Apple to sell their music without DRM for years. From individual bestselling acts like Barenaked Ladies to entire labels of copy-friendly music like Magnatune, innumerable copyright holders have asked Apple to sell their work as open MP3s instead of DRM-locked AACs. Apple has always maintained that itís DRM or nothing. These artists believe that the answer to selling more music is cooperating with fans, not treating them as presumptive pirates and locking down their music. ì

The take away here is that Most artist want their content to be accessible to their fans and purchasers of their music in a format that will give the owner the freedom to listen to the music on any device.

ìRecently, Warner Music chief Edgar Bronfman Jr. tried to get Apple to give him control over pricing of Warnerís tracks, so that he could charge more for top-40 music and less for back-catalog. Bronfman was handed his hat and laughed out of Cupertino. After all, what was he going to do, pull Warnerís music out of the iTunes Store and only offer it through stores whose products canít play on iPods? Itís no surprise that Bronfman responded to Jobsí music memo with an infantile tantrum: ìcompletely without merit Ö completely without logic.î Bronfman doesnít want no DRM, he wants a DRM that benefits the music companies without leaving any value on the table for the tech companies. ì

And here the take away is that Most labels want to have the ability to sell music in as many places as possible in many pricing and distribution formats. They also want to make sure that all of the rights holders, themselves as well as the artist are paid for the content they have created.

I though it would be good to write about these sides of the drm issue as they seems to have not gained as much attention as the consumer implications of drm.

The current debate concerning drm as it relates to the owners and rights holders of content is one that has been confused with issues that have more to do with controlling the choices that an artist/label/content owner have for distribution and pricing . I do not want to diminish the issue of purchasers currently not having the freedom to play the content on any device that they own and the right to have access to the content that they have purchased for their entire lifetime. This is important but for this entry I want to focus on two area that seems to be overlooked. Artist want their music to be in a format that gives the purchasers of the music the ability to play it on any device; and labels want the ability to sell music in many places at variable pricing points, while assuring that they are paid for the content that they own.

Currently none of the drm schemes that are offered by any of the prominent tech companies offers a solution for both the artist and the labels needs. In fact the current drm solutions lock both the artist and the labels into a complicated maze that has them giving control of pricing, distribution, and file format to the provider of the the very software that is touted as giving them the power to sell and to distribute with copy protection. I m willing to bet that of you ask any artist or label they will tell you that drm has not delivered on the promise of copy protection or of freedom of distribution and pricing.

It is also telling that none of the drm schemes are currently easily available or user and price friendly enough to become widely used by artist and labels. If drm is the an issue of copy-protection than artist should be given the choice to easily be apply drm to their music. And sites that distribute music should allow the sale of all formats so that artist and purchasers have a choice that is not forced upon them.

Labels want to sell music in as many place as possible at prices that they control. Artist also want this, as well as the ability to sell files in formats that give the purchasers freedom to play the music on any device that they own. The artist as well as the labels are aligned in the fact that the current drm systems do not deliver on these compelling needs.

  Colin Putney [02.26.07 01:18 PM]

William brings up some intersting ideas, but I wonder if "the law of the minimum" isn't enough to explain the music industry as well as book publishing. Some artists are experimenting with the free download because awareness is the limiting factor in distributing their music. Others (Metalica comes to mind) already have plenty of awareness, and their revenues are limited by something else. Big labels are against free downloads for two reasons. They can create awareness pretty much whenever they want, so free distribution doesn't help them. On the other hand, the ability to create awareness is their ace in the hole, and so they oppose free downloads because it's a means of increasing awareness that artists can do for themselves.

  Mike Morgan [02.26.07 03:09 PM]

I agree with Tim's perspective on this. The economic viability of the free download is directly related to the elasticity of the demand for the product.

Another diminsion to the matrix is the extent to which a free digital copy is a satisfactory replacement for the sold product. Since few people want to read novels on screen or print them, fiction publishers have been able to give away pdf downloads with the reasonable expectation that the interested reader would buy a print copy. However, in the sci/tech publishing world, users are more likely to be "dipping" into a book to consult relevant sections and then reading or printing only a few pages at a time. Given storage and searchability advantages, this makes the digital copy even more valuable than the print copy. This factor, combined with the limitations on promotional "echo" makes the free download unattractive to anyone trying to recoup costs in niche markets.

  V [02.26.07 04:11 PM]

To william: to state your comments in a cinical way I can simply say that everyone would like to control everything. :)

your remembered me about Lawrence Lessig's argument for bittorrent. In his The Future of Ideas he states that he prefers to buy CDs and videos, but if one of his favorites is not available any more in the stores then bittorrent is a really good alternative. I think that you pointed out the other side of the market in this situation. Good point!

To Jeremy: I think that it is a good idea to start gain popularity by making your work freely available, just never forget about finding the good equilibrium. After a while you will probably prefer to charge for some of your works for sure. Have a good relationship with your potential readers, so they will be happy to read you even if they have to pay, and do not introduce this fact abruptly, but prepare them first.

  Tim O'Reilly [02.26.07 08:47 PM]

Jared -- I've been corresponding with one of your co-authors, trying to get download stats for the free copies, so we can do some analysis and give some real substance to the post. However, I can tell you now that we're very happy with the sales of Asterisk: The Definitive Guide. It's done really well for us.

  lkratz [02.27.07 12:49 AM]

*** Disclaimer : I'm a founder of Jamendo ***

Hi Tim,

There are thousands of bands releasing their music on bittorrent under a Creative Commons License.

On Jamendo, Bands voluntary publish their albums on popular P2P networks : eMule/Kad and BitTorrent. We do the P2P hosting for them and we also do the indexation in search engine like or

So there's nothing new in this story, it's just sad that appear to be a "nothing to loose" strategy for an old album, instead of a "Everything to win" strategy for a new album.


  Tim O'Reilly [02.27.07 07:33 AM]

Jeremy, what V said...

  Dan Guy [02.27.07 07:55 AM]

I just wanted to say that I love it when you reference Frank Herbert.

  Rufus Polson [02.28.07 09:07 AM]

William said,
"And here the take away is that Most labels want to have the ability to sell music in as many places as possible in many pricing and distribution formats."

Seems reasonable.

"They also want to make sure that all of the rights holders, themselves as well as the artist are paid for the content they have created."

Sounds unlikely. The big labels are well known for doing their best to make sure that both rights and money accrue to them, not the artists or anybody else. These are the people busy trying to redefine songwriting as "work for hire" so that the people who write the songs don't own the copyright. They've had some legislative success.

As to DRM not delivering on what one might call its promise in terms of flexible applicability--it seems to me it's unlikely to. Effective DRM as I understand it violates the laws of physics. The result is that by the time any given DRM scheme is reaching the kind of maturity that would allow features that give that kind of flexibility, it's been extensively hacked or otherwise worked around. Then they'll have to start over.

Plus, there's a tacit assumption in the discussion of flexibility that artists' and labels' interests are the same--kinds of flexibility useful for different groups are mixed together indiscriminately. It strikes me that flexibility useful for labels (or in the case of Apple, for the tech firm) are much more likely to come into existence than flexibility that would help artists independently do their own DRM. Between digital downloads, CD burning, and good printers, the role of labels as middlemen is becoming more and more fragile. If artists can generate their own DRM, why wouldn't they just sell their CDs directly off their own or some co-operative aggregate websites? People could download the full .wav, burn it to CD, print the cool cover etc. and put it in, and bingo! No label needed, and no more chance of copying and fileswapping than with the big labels' product. It does mean a bit of effort on the buyer's part, and stores still have a role. But if that were a major and viable source of artist income, their hand for deals with labels for CDs in stores would be massively strengthened, their dependence on the labels reduced drastically. The labels don't want that. Probably Apple doesn't either. So they won't be designing DRM that artists can use and control if they can help it.

  Andrew [07.31.07 05:29 AM]

I agree with Tim's perspective on this. The economic viability of the free download is directly related to the elasticity of the demand for the product.

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