After a Tidal Wave: Why the Music Industry Has Its Finger in a Dyke

There's a story from Holland. A boy notices water coming from a hole in a dyke. If he doesn't do something, the hole will get bigger and turn into a crack, which will turn into more cracks, until the dyke crashes down, flooding his village. He puts his finger in the hole and waits until he can alert someone to the danger. They fix the hole; the village is saved.

The water is illegal downloading; the music industry the boy, only now he has ten fingers, ten toes and his bodyweight up against the dyke.

Is there a way to stop the 'water', to save the 'village'? Yes and no. You can save the village but to do so, you must change your attitude towards the water. Instead of stopping the flow, the music industry needs to control it. Illegal downloading won't go away, so make it legal. Instead of plugging hole after hole in increasingly desperate attempts, let it flow and build canals. Water can be controlled; so can downloading. By controlling it, the industry could increase music and artist sales and internal job growth.


It's called 'Reverse Consumerism'.

Take Madonna as an example. On April 10th, 2012, Hollywood Reporter Mary Ellen Skawinski wrote a piece titled "Madonna's 'MDNA' Suffers Biggest Album Sales Drop Of All Time". Skawinski's article stated that "after topping the Billboard 200 in its first week with 359,000 copies sold, the singer's MDNA is expected to suffer an 88 per cent drop in sales to 46,000 units, according to Forbes."

First week sales figures were boosted by over 50% due to the album being part of a concert ticket deal, but the drop wasn't from a declining interest in Madonna. It was because... wait for it... it was now online for free illegal download.

Madonna's 'first week sales' will always be made up in large part by lifelong fans bagging the album the minute the 'pre-order' link goes online. The rest of us? Yes we want the album but pay for it? Why should we, when we can get it for free?

So how could Reverse Consumerism save Madonna's profit margins?

Hypothetically, Madonna announces her next album 'Age Ain't Nothing But A Number'. Using Reverse Consumerism, six versions go online, all free to download. Each comes with the album plus a different 'add-on'. Album A comes with a remix album. Album B includes an acoustic album. C has interviews with Madonna's collaborators, D comes with a behind-the-scenes documentary, E has exclusive digital artwork and F, the chance to meet Her Madgesty in LA.

As a music fan, I'd download albums A, B, C and D. I'm not bothered about Album E but it's free, so why not? Album F - the more times I download, the more chance I have of winning. A serious Madonna fan will download it multiple times. I know several people that will sit there for a week constantly pressing that refresh button.

"OK, that's cool, but how does she make money off that?" you ask.

Say I'm the Head of Advertising at Barclays. Looking at the figures, Madonna's profile and the press circus surrounding the album, I know traffic to any of these variants will be huge, particularly in the first week. Do I want to advertise on one of them? Of course!

Varying prices across different platforms on MDNA's original release make it difficult to pinpoint one set cost price. If we take today's price - £7.29 (generous seeing as Amazon originally charged $5 ) - and times it by the 1.8million copies the International Federation of the Phonographic Industry states Madonna sold from March 23rd 2012 to December 31st 2012, gross profit comes in at £13,122,000, a weekly average of £328,050.

With Reverse Consumerism, Madonna charges advertisers £1million per week on each album set. Because the album is already free, there's no reason for fans to use one of the peer-to-peer sites. They can go straight to the source. Those 'fans' who would normally get their copy illegally for free now click the 'download' button on Madonna's controlled websites. Figures stay strong, advertisers continue to pay high revenue and in two weeks, Madonna has made almost as much gross profit as she did for the entire 40 weeks of 2012.

"That's great," you cry, "but what about artists who don't have Madonna's influence?"

Let's take another three artists: Jay-Z, Mumford and Sons and unknown, fictional band Purple Cabbage. Using the same Reverse Consumerism Model, this time we've constructed platforms that allow us to push multiple artists, with six levels for advertisers to utilise - Premium A (Madonna, Jay-Z, Beyonce etc) down through B, C, D, E and F.

The first week of sales and executives are negotiating with top tier advertisers for Jay-Z's album. We know it'll be big, so it's £1 million plus per set. Mumford & Sons are Category B, so £500,000 a week per set. Purple Cabbage? As no-one's heard of them, it's Category F and £1000 a week per set.

After one week, Jay-Z's done as expected and is strong for the second. We'll keep him in Category A. Mumford & Sons move up to Category A for the US and the UK after stronger-than-expected downloads, but move down to Category C for other territories. Purple Cabbage? With fans sharing officials links across social media their buzz goes stratospheric. We're projecting bigger Week 2 figures so they move up to Category D.

Reverse Consumerism give fans the product for free, artists revenue and allows smaller acts to secure reasonable income. It also allows the music industry to boost jobs by employing new sales staff.

The music industry must wake up and control the tide. Times have changed and we need to do a total 180. If we listen, understand and change before it's too late, the damage done in the past decade is reversible. If we don't, we'll be washed away by a tidal wave of our own making.