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Digital “Freeloaders”: Paying for the Pipes, But Not the Piper

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Should audiences have to pay for digital entertainment? Is it really true that they’re not willing to? Though it’s nominally about music, the controversy that has blown up around an NPR blog post—in which a 20-year-old intern casually confesses that she has paid for almost none of the 11,000 songs in her library—has something to say about the troubled state of most other entertainment business models today, including TV’s.

In her post, Emily White says that she’s paid for a total of about 15 albums, ever; the rest, she says, were mostly not “illegally downloaded” but copied from friends. White recognizes the cost of file-sharing on artists, and admits she knows that buying concert tickets and T-shirts don’t nearly make up for it financially. But, she says, unless there’s a “convenient” way of paying artists for music—she advocates for a Spotify-like service that would give artists a micropayment per play—that’s the way it’s going to be.

Her post inspired a long, detailed and impassioned response from David Lowery (who, if you are as old as I am, you may know from Cracker and Camper Van Beethoven). Among other things, he details the amount of royalties that file-sharers like White have cost musicians, argues that services like Spotify actualy pay artists very little as it is, attacks the moral reasoning of White’s post and compares the cost of buying 11,000 songs over 10 years to other monthly expenses that people unthinkingly pay. (That last argument, ironically, will be familiar to anyone who listens to NPR pledge drives. “For the price of a cup of coffee a day…”)

The ethics of file-sharing have been debated since the days of Napster. If you want to have at it again, more power to you, but I’m not going to wade into that here. The more interesting question to me here is the practical one—who pays for what and why?—and the particular point Lowery makes about how people do pay for digital entertainment.

After all—and here’s where music and TV companies are in a similar situation—it’s not like people are unwilling across the board to pay for digital entertainment. They pay, a lot, for computers and iPads. They pay steep monthly fees for Internet access and wireless data plans. They pay even more for cable bills. They may not like it, but they pay it—hundreds of dollars a month in some cases. And once they’ve paid that, many or most decide that they’re done paying.

Again, I’m not arguing the ethics. But it’s worth remembering that it’s not as simple as saying, “People won’t pay.” Demonstrably, people do pay. But it’s the distributors—Internet, wireless and cable providers—that have managed to jump to the front of the line and collect. Everyone else who wants to try to make a living off digital media—musicians, journalists, sellers of digital video—is much farther down the payment chain, and has a much harder time of it.

I don’t think most people who file-share (or torrent TV shows, or what have you) are naive. I don’t think, by and large, they believe that their Internet provider takes their monthly bill and divvies it up, penny by penny, among online newspapers and indie rock bands and makers of LOLcat images. But they do accustom themselves to paying this big monthly nut, which secures for them the Internet and all its wonders, and then decide that the paying stops there.

It’s a similar problem to TV networks who have been fighting things like DVR ad skipping, because they’ve found it hard to monetize online video, or news outlets, trying to make money from online journalism. It’s not that their audiences won’t pay for anything, at all. It’s that, suddenly, they’ve been caught in an environment where someone else has gotten upstream and diverted the flow of revenue away from them—and good luck getting the computer and Internet and cable companies to cut them in on that now.

I don’t have a good answer for that; nor do a lot of content makers, which is why they often focus instead on trying to morally persuade people like Emily White to pay directly. Which is their prerogative, of course, though I doubt it will work. But both White’s post (in which she claims she’d be willing to pay a monthly all-you-can-eat music bill) and Lowery’s response (which points out how much people pay for all-you-can-download online service) share a hidden common theme: so-called freeloaders actually do pay for things.

So the real challenge, not just for music but all media businesses, may be not to get to these customers through guilt, but to identify the ways in which they are willing to pay, and try to figure out how to get at that money—to get someone to pay the piper in the way that they’re now willing to pay for the pipes.

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