There was a lot of talk last week about Radiohead’s decision to release their new album, In Rainbows, as a free (well, free-ish) download. It has been widely dismissed as a publicity stunt to sell the deluxe £40 CD/Vinyl edition to follow. This might be a factor, but such cynicism is perhaps missing the point in this case.

Radiohead are employing a “donation’ system to pay for their work, something not very common for major label recording artists (Radiohead are “between labels’ right now), but quite familiar to some webmasters, myself included, who rely on this source of income to keep a site live. The internet, with it’s abundance of information, has been forging new ways of thinking about economics for fifteen years now, so it was inevitable that they would begin to escape into the economy at large eventually.

Information, the commodity that webmasters, digital service providers, and anyone in digital media (including recording artists, newspapers, television channels, film-makers etc…) are dealing in, is not a scarce resource. It is in abundance. Traditional economics is based upon scarcity, with prices determined by laws of supply and demand. It is very difficult to fit these systems into Post-Scarcity economics.

The music industry are one of the first to suffer the winds of change, as the bits and bytes they deal in are extremely vulnerable to copying. The corporate approach to this seems to be DRM (Digital Rights Management) which is perhaps the stupidest thing I have ever heard of. The idea is that the mp3s they sell are locked to a certain player. For example anything bought through the iTunes store is locked to only play through iTunes, limiting what a consumer can do with their purchase. What they are effectively doing is making sure that the mp3s they are charging money for are actually of less value to the consumer than the illegally downloaded, free equivalent. This can only encourage file sharing, rather than combat it.

The sensible solution, obviously, is to embrace post-scarcity. I’ve been banging on about this for months now, ever since I discovered agalmics, Robert Levin’s theory of post-scarcity economics. With our information technologies copying data is the easiest thing in the world, so it would be fool-hardy to try to fight it. Five years ago we had the technological capacity to store and copy the entire works of one recording artist between hard-drives. Today we can store and copy the entire works of a film director with ease. Where once we could transfer a book’s worth of information, now we are able to trade in entire libraries worth of data. We have to be prepared for a market place, not many years away, where we will be capable of storing and copying the entire digital output of a culture.

This is why the idea of charging for information is already starting to seem rather archaic. In agalmic economics the main commodity to be traded will be reputations, kudos, respect, all of which are earned in a variety of non-Capitalist ways. Information will be abundant and free.

It’s good to see the first signs of this trend taking hold. Prince, in need of a comeback, chose to give away his new album with a Sunday newspaper recently. This, I’m very pleased to say, had the executives threatening murder, which is now the surest sign of a powerful phenomenon. Paul Quirk, chairman of the Entertainment Retailers Association, is quoted as saying “The Artist Formerly Known as Prince should know that with behaviour like this he will soon be the Artist Formerly Available in Record Stores”. Big deal Paul, kids don’t buy their music in record stores these days, surely in your position you should know this.

Meanwhile, smaller bands are happy to give their work away, as the struggle to be heard in a crowded marketplace is a much bigger concern than making money from CD sales (the majority of which goes to the label anyway). They can then make a living from touring, when they get to cash in their kudos.

There are clearly some exciting things going on in economics at the moment. There is a similar movement going on in publishing, with many authors making free downloads of their books available at the same time as they see print. Also last month, one of the bastions of ‘old media’, The New York Times announced its decision to stop trying to charge for its online content. About bloody time really.

I’ll be observing and reporting upon further developments of this trend with unrestrained glee, so watch this space. But if you require further reading now, I recommend the following articles:

Agalmics, by Robert Levin
Free Data Sharing Is Here To Stay, by Cory Doctorow
(and the rest of his Digital Rights, Digital Wrongs series for The Guardian)
Clicks and links will bring all the walls tumbling down, by Jeff Jarvis

See also my earlier posts:
Grow Your Own Sofa
Agalmics

This entry was posted on Monday, October 8th, 2007 at 12:50 pm and is filed under agalmics, open source, philosophy, society, tech. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.