Adele, Taylor Swift, Beyonce’, Coldplay and more artists are fully understanding the value of not giving away their work for free right out of the gate. This is especially important during the biggest consumer spending season of the year. Why would anyone with a solid fan base and known demand for their work give it away for free during most profitable window of the year? This then begs the question how many more records would you be selling this holiday season if your record was not available on free streaming platforms?
Spotify and other free streaming services should be structured more like Netflix. The film industry understands the value of strategic pricing in the context of time based value propositions. Friday night block buster movies are not available on Netflix at the same time for a good reason.
There has been a lot of good work and innovation by the film industry to create “day and date” titles that are available both in theaters and as video on demand at the time of release. However none of these are made available free to consumer on an advertising supported platform. In fact, all the major film and tv streaming services require payment of some kind, be it subscription (HuluPlus, Netflix, Amazon Prime) or transactional fees for rental or permanent download (Itunes, Amazon, Vudu).
“Or Else They’ll Steal It!”
The only argument that is ever made against the use of windows is that tired old song that they like to sing in Silicon Valley called, “Or Else They’ll Steal It.” The problem is of course, they’re already stealing it, and will continue to steal it until there are real consequences to not do so. But the film and tv industries are not listening to the song of Stockholm Syndrome. Instead the film and tv industries continue to innovate and experiment with new windows, digital distribution models and competitive pricing based on the new value propositions.
Converting consumers from “pirate 2 paid” is dependent upon giving consumers more value and pricing options, not less. If the record industry doubts this for even a split second the proof is expressed in a single word, “vinyl.”
By contrast the record industry has given away valuable profits to tech companies like Spotify who give little in return for the high value products that are being licensed. The ubiquity of distribution on streaming platforms drives the price of all products to zero.
Windowing allows for price elasticity and rewards consumers who are willing to spend more for the premier product or experience. Of course, for windowing to work there has to be a fair and regulated marketplace where artists and rights holders actually can withhold their work from various platforms should they chose to do so.
If we’ve learned anything at all in 2015 it is that YouTube is probably the single greatest threat to the ability of artists and rights holders to have a long term sustainable business. There can be no windows if everything appears on YouTube via User Pirated Content anyway.
The grand irony here is that in a well controlled and regulated distribution system, it is far more likely that all stakeholders would have the ability to generate greater profits within their sectors. We now have a decade and a half of data behind us while heading towards the second half, of the second decade, of the new millennium. It’s time to for the adults to put an end to play time. It’s just math and common sense.
Windows work. Period.
Business decisions need to developed through common sense, innovation and time tested principles of basic economics. We’ll repeat our previous suggestion for an industry wide, consistent windowing platform strategy below.
Windowing works better when there is a reasonable amount of consistency. Our friends in the film business have been highly effective at windowing for decades and there’s no reason why it can’t work similarly well for the record business.
Every new release should have the option to determine the release windows when the record is being set up. For example the default could be 0,30,60,90 day option for transactional sales, followed by 0,30,60,90 day option for Subscription Streaming prior to being available for Free Streaming.
Windowing is not new for the record business. The industry has never had pricing ubiquity across all releases, genres and catalogs. There has always been strategic and flexible pricing strategies to differentiate developing artists, hits, mid-line catalog, and deep catalog. An industry wide initiative to re-allign time proven price elasticity is the key to growing the business and developing a broad based sustainable ecosystem for more artists.
- Windowing allows for Free Streaming to exist as a strategic price point.
- Windowing allows for Subscription Streaming to exist as a strategic price point.
- Windowing allows for Transactional Downloads to exist as a strategic price point.
- Windowing allows for artists and rights holders to determine the best and most mutually beneficial way to engage with their fans.
Windowing is the key (as it always has been) in rebuilding a sustainable and robust professional middle class that will inevitably lead to more artists ascending to the ranks of stars. Some will become superstars and legends capable of creating the types of sales and revenues currently achieved by Adele, Taylor Swift and Beyonce’. To get there however we need to abandon Stockholm Syndrome and embrace windowing that works for everyone.