In essence – yes.

The simplest way to think about it looking at the economics involved.

An economic good can only command a price if it is scarce in relation to demand, with air being the classic example of something too abundant in supply to command a price.

It used to be the case that the only way to own a song was to purchase a CD. A CD is a physical product, a scarcity, so it can command a price (and when combined with the music and the brand of the artist, you can command a nice high margin too).

The internet caused havoc in the music industry because it took away the important caveat that “the only way to own a song was to purchase a CD.” Legal issues aside, if your content (an mp3, a movie, a news article) can be copied and pasted it is effectively infinite in supply. This makes it next to impossible to command a price for this content.

So as for the goalposts question, the way I think about it is that an important element of the business model has switched from one side of the equation to the other.

Your content is now your marketing. It is another one of those intangible elements, like doing interviews or being on the radio, that increase your fame (brand equity?) So the more people that download your Mp3s for free, the more t-shirts, limited edition box sets and, as you mentioned, concert tickets you’ll be able to sell.

This theory is shown in the data too, the recording industry has been in freefall since 2000, but the music industry as a whole has been growing in value, driven mainly by live performances.

Interested in this business idea. Do you see the music model changing to one of free content (music) and growth in audiences to live events? Are the goalposts moving?

Keith.

Normal blogging should resume soon enough once I get the business up and running

Fair play to you! The best of luck on what’s bound to be an exciting adventure!

Ciarán.