HOW TO: Take the Music Business Back From Apple

image from www.centennial.k12.mn.us Apple has the music business cornered. Or does it?

Chris Holmes has a radical idea that would help the music business free itself from Apple's stranglehold and reward the real influencers that distribute music. Apple might sell music, but it's the blogs and music pirates that distribute it. They're the ones that create the buzz that leads music fans to their storefront. Yet, while often viewed as parasites, these entities do produce enormous amounts of value. Rather than decry them, Holmes believes the business should reward them.

How would that work?

Change nothing and incentivize them. Parties will pursue their self-interests while still adding value to the whole. In what Homes calls the Privateer System, bloggers and music pirates are provided opportunities to make money while spreading music. Bloggers that laud an up-and-coming act would host their music and take a percentage of the sales. Fans too. Rather than sending readers and fans to Apple or Amazon, where they get a cut of the profits, the money would remain within the social ecology, help it grow, and gain new members.

The idea is that rather than allowing corporations to extract value from music communities, the value could be captured by the community. In the process, the ecology expands due the increased cash flow throughout. Homes has a very interesting idea, but, by all means, don't take my account as the final word.

"Privateer System could be a game-changer that frees music distribution from Apple's stranglehold.  

If it is widely accepted, The Privateer System would not only expand the size of the digital music distribution market, but the 30% gross margin that Apple currently earns on digital music sales would instead be absorbed by more active participants – the tastemakers – that would invest more of their earnings into the industry.

Again, this is part of a natural evolution.

As more profits flow through the grassroots distribution system created by The Privateer System, there will be more tinkering and innovation that will ultimately benefit the music consumer.

Privateer model provides a mode where tastemakers and file-sharers are rewarded and their contribution is encouraged, rather than in the current model, where they are looked at as a cancer that is eroding the system. We take that system, legitimatize it, and help the people doing the heavy lifting in the spread of music make a profit, all while making a profit for artists.

As Privateers, we, as artists for the arts, can create a symbiotic system where fans can support the arts, and artists can blossom. We have taken a lose/lose scenario for the artist and the consumer and turned it in to a win/win: creativity can flow, and tastemakers can be rewarded and incentivized for turning people on to cool stuff. This model also works with film, books, music and any digital media. It is not a total solution, but it is a start." (Read on.)

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  1. Thanks for posting this KB… This is a basic system that we have been promoting for some time now and I dont understand what is taking so long for this concept to materialize.

  2. while this sounds great on the surface, many pirates, perhaps even the majority of them, are motivated by an animus toward the industry of music and the very idea of art being monetized. to many of them, their biases and anti-corporate principles would likely get in the way.
    also, anytime you inject financial gain into the picture, credibility is compromised. if the music community knows or suspects that a pirate or blogger is being compensated for what they choose to feature, objectivity is damaged. they’ve sold out to the very system that they were ostensibly fighting.

  3. This is a really nice idea but I think forgets one of the main reasons why Apple has such a stranglehold. That is the quick, easy, convenient and familiar user interface and payment system that is iTunes.
    While the Privateer System will work for some people, and i’m sure artists hardcore fans will appreciate it, the majority of people will be much more comfortable and, I think likely, to stick to what they know.

  4. how about seeing if Apple does a better job at running (monopolizing) the music industry than the the present idiots have done before trying to demonize them.
    bloggers and pirates KNOW who the enemies are…. and its NOT Apple bitches!!

  5. A good friend of mine with major label experience wanted to introduce this very model three years ago via an “eBay meets myspace” style of site. Kind of a pyramid “liking” strategy where shared “likes” aggregate points, points aggregate to bigger items to share (concert tix, merch, etc) or dollars… People with a lot of points become brandleaders in their geographical market…
    but people want/need/only act upon simple, and iTunes is simple to transact. Can’t hate Apple for knowing their audience and creating a product that delivers…

  6. This is already being done in hundreds of other industries. It’s called an affiliate program!
    As many people realize, illegal downloading is going to happen regardless of what anyone really does. If artists created an added value in addition to a song download, bloggers and file sharers worldwide would have an incentive to join an artist’s “affiliate network” where they are able to supply would-be pirates with an option to buy the “premium” version of a product – and maybe even perhaps alongside a free download of the same song. Some will only take the free song, but the blogger, filesharer, etc will have added incentive to push the paid version.
    Simple. Not easy.

  7. “Stranglehold” how? Please explain your use of that term. You are free to sell your music on iTunes and any other method at the same time. We do. And guess what? Most of our sales happen on iTunes, because that’s where people like to buy. It wasn’t that way in 2003. They built it, it worked, it still works, and they pay/report more honestly than any distributor we’ve ever worked with. What is your fucking problem with that?
    Nice sensationalism for clicks, though.

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