Sweden’s Hybris is an exemplary internet-savvy record label. The other day, on their blog, they reported on a seminar they held in Stockholm along with also-exemplary label Songs I Wish I Had Written, to discuss the future of music:

It was never said out loud, but in some parts, our original aim seemed to be there all along as a background in the discussion at the seminar. We never fell down the trap. Ah, yes, the trap. It is very hard to talk about the future of music, music that deserves respect, and not fall into the trap of the filesharing debate. The filesharing debate is over. There are nothing more to discuss. Unfortenatly that is mainly what is going on. Endless talks, discussions, laws, propositions and what nots about what to do about the big ‘problem’ of file sharing. Not much discussion about what to do if you are lost in music however. Or why to do it. Or for whom. Or how. Or where. And so forth.

There need to be discussions though. What are we going to do with our love for music? etcetera. [...] We feel that there haven’t been a lot of discussions between people in this crazy business. So far the discussions have been done in small circles of friends, in confrontative style in big media or at blogs, leading up to progress in some parts but no-one is really talking. Or maybe mainly, listening.

I recently interviewed their top guy, Mattias, who is an exceptionally articulate analyst of how labels should adapt to this new terrain. He articulated his stance on filesharing a bit more in our interview.

I view file sharing as a positive. It’s affecting the culture, listeners who are into our kind of music, they are more music fans than the general listener. That kind of person has increased in number over the last 5-6 years. In Stockholm now there are tons of clubs that play our kind of music. It’s 100% file sharing and the internet that we have to thank. All people involved in indie music have known that if we could only get exposure we’d be huge. The majors had marketing and budgets, but the internet made it easy for the independents.

mp3 bloggers are important in the development of mp3 culture. In the beginning there weren’t many mp3 blogs, it had very big impact if we put up our own site because everyone would go to the site. Nowadays mp3 blogs have taken that place. The label isn’t enough of a filter anymore. It’s great for us. If a big mp3 blog puts up a track by one of our artists it gives it credibility. It makes it easier for people to like it and accept the music.

Some more quotes from other label people are here.

He is quite right that what discourse there is remains stuck in the endless cycle of “what will we do about file sharing” instead of “how can we create a new model that works in this environment?”

Hybris’s website is worth exploring for the ways in which they are building a new model: giving some of the music away (on video too), emphasizing their global nature, blogging and maintaining a presence on many different online spaces (MySpace, Last.fm, Facebook…).

On a related note, today Its A Trap contributors listed their 10 favorite 2007 Scandinavian releases, and many of us included Hybris/Adrian Recording’s Familjen on our top 10. Familjen is nominated for a Swedish Grammy and is getting Pitchfork adoration for their super super supercool video for Det Snurrar I Min Skalle, and recently won a huge online voting competition in which both labels made heavy use of social network sites for recruiting votes. This crew knows how to work the internet.

Before it slips away, I wanted to draw attention to this excellent article in the Toronto Globe and Mail about the interpersonal elements of the Radiohead pricing experiment. It draws on an article I’ve used often when I teach nonverbal communication about tipping, which I thought was a clever link on the writer’s part:

But so far, economists don’t understand much about what motivates people to make payments voluntarily—and those of us doing the paying don’t understand it, either. When it comes to restaurant tipping, for instance, a “gifting” practice that continues to baffle economists, research indicates that the actual quality of service doesn’t make much of a difference to the tips a server receives. Although patrons invariably cite service as a major factor in how and why they tip, research data show that it only accounts for a 1.5% difference. What makes a greater impact, according to studies done by Professor Michael Lynn of Cornell University, is the degree of interpersonal connection we feel with a server. One subject in the study who made the simple change of introducing herself to diners by name saw her tips increase from 15% to 23%. Tricks such as touching customers on the shoulder, writing “thank you” on the bill and crouching beside the table to take an order were shown to generate even greater monetary rewards.

Another piece, also exploring the extent to which this model might be expanded into other products appeared recently in AdWeek. Its author speculates that games are ripe for this sort of pricing scheme, and quotes me (this is getting old, I know) making the interpersonal point:

In general, game developers build successfully on a key element of consumer-generated pricing: passion. According to Nancy Baym, an associate professor of communications studies at the University of Kansas who studies online fandom, that factor is the assumption or reliance on “an audience that cares about you enough to pay for something they can get for free.” It’s a dialog, she says, that “melds a commercial relationship with a social relationship. There’s something more than commerce.”

At any rate, both articles are notable for replacing hype with reasoned comparisons to other phenomena that rely on user-generated pricing.

____

On a personal note, my apologies for my irregular posting to anyone who misses more regular updates. At least until the new year posting will stay sporadic: We are hosting 4 job candidates in my department this week (during an ice-storm that has left Kansas in a declared “State of Emergency”) and next week I am headed off for an exciting little combined work and pleasure jaunt to Oslo and Copenhagen. Sunlight? Who needs it!

I spent the latter half of this week in Princeton. I was invited by the Center for Information Technology Policy and spoke on the topic “Understanding the Networked Audience.” Here is a super-short summary of my talk:

The “audience” has been constructed in many ways: as passive receivers, as market segments, as reader-responders, analysts who work together to interpret texts, and most recently as producers of new materials, publicists, outlaws and collaborators.

Audiences have always been and done all of these things, but the internet enables them to be more active, more social, and more productive because it expands their reach, bridges time and distance, supports archiving, lessens social distance, and supports new forms of engagement (e.g. vidding).

Audiences were networked before there was an internet: witness Grateful Dead’s touring fans. They traded bootlegs using cassette tapes and tape trees long before there was P2P file sharing. They produced fanzines, art and other forms of cultural production.

When the internet (invented in part by sci fi fans) developed, fans were early adapters, creating mailing lists, usenet groups and, as soon as there was a WWW to do it on, fan sites. Meanwhile, the bands and other forms around which audiences rallied had boring websites that no one visited.

In today’s media environment where it’s easy to make one’s material public, it’s ever harder to get (potential) audiences to pay attention.

The old gatekeepers like journalists and disc jockeys have not been abandoned and are still the focus of even independent publicity campaigns. Bands and other forms of cultural producers have learned to build more interactive and engaging sites, but fan sites often remain better than official ones.

MySpace was huge because it offered bands a means of constructing their own identities and building relationships with their audience without mediation from the record companies or the press. But even on MySpace you have to get noticed, and audience word of mouth is key to that.

In the context of music, fans help bands get attention by writing mp3 blogs, archives, wiki entries and news sites. Smart bands and labels adapt and feed the fans by distributing free music and videos.

Into this mix, third party “Web 2.0” platforms seek to supplement and monetize this audience-as-filter role with things like recommendation systems, personalized radio streams, social networks (e.g. Last.fm for music, Flickster for movies), library sharing, Facebook applications, portable playlists, widgets, and more.

Smart entertainment providers need to be represented in all of these venues as well as representing themselves offline (enter street teams, touring, etc). Indeed, even though music audiences are more international than ever, touring matters as much as ever and arguably more than ever. This is helped by the fact that online fans become (impoverished) booking agents in order to bring the bands they like to their towns and countries.

Because entertainers of all sorts now need fans in order to gain attention (and credibility), the relationship between entertainment providers and consumers is becoming increasingly egalitarian, less commercial and more interpersonal. Instead of being viewed as “audience,” fans become collaborators in producing not just an audience, but a culture in which some forms of popular culture can thrive (e.g. underground music scenes).

The personal relationships formed are rewarding for both fans and artists, providing motivation for fans to serve as publicists and for artists to continue making their art. It’s not just about money.

As a result, the culture industries are undergoing massive transformation. The puzzle of how to treat audiences as equals, honor their creativity and importance, give them materials to play with, yet still make money is not yet solved. Radiohead’s choose-your-own-price experiment and sites like Amie Street where the cost of an mp3 depends on its popularity are two of many test-strategies that people are using.

If one thing is clear in this scenario, it’s that anything that alienates fans, that makes them actively dislike you, or that squelches their creativity in the name of control will not work in the long run.

We need models that put the art and the human relationship at the center of the equation in place of control (i.e. hierarchy) and profit.

The Radiohead experiment demonstrates that the future of the music industry is forgetting about fans as customers of labels and instead recognizing them as people who want to have social relationships with bands. I’m not talking about pathological obsession. I’m talking about what happens when bands maintain a blog, which in effect says “we want to you to know what’s going on with us,” when they provide comment spaces and forums for fans to talk to them and then respond. I’m talking about MySpace friends links, answers to emails, free downloads, mailing list missives. These things move people from thinking about music in economic terms toward thinking of it in social terms. That brings with it a different system of trust and obligation from the one that governs economic relationships, though money may still be exchanged.

Economists seem to be shocked that more than a million people have paid an average of somewhere around 4 pounds to download the Radiohead album. “It’s not rational!” Why pay for what you can get for free? Is it some “touchy-feely” “warm glow?” An editorial in the New York Times over the weekend read:

One could argue that rationality isn’t everything. Radiohead fans might just be altruistic beings who out of the goodness of their hearts would like to give some money to a spectacularly successful and probably stinking rich rock band. But somehow, that doesn’t work as an explanation.

Or does it? Some economists suspect that what is going on is that people get a kick from the act of giving the band money for the album rather than taking it for free. It could take many forms, like pleasure at being able to bypass the record labels, which many see as only slightly worse than the military-industrial complex. It could come from the notion that the $8 helps keep Radiohead in business. Or it could make fans feel that they are helping create a new art form — or a new economy. People who study philanthropy call it the “warm glow” that comes from doing something that we, and others, believe to be good.

[...]Today, music lovers are left but two options: pay list price for an album, or perform what a fan might call a free download and a record company would call theft. Radiohead’s experiment suggests a third way out: let fans pay what they want and give them lots of touchy-feely reasons to want to give as much money as they can.

It’s important not to be dismissive of “touchy-feely reasons,” pit them against rationality, or think of them as weaknesses to be exploited for financial gain. Before people were customers embroiled in economic entertainment systems, we were humans whose rewards all came from our relationships with other people. This is true of listeners and bands. This is true of each of us in our own individual development, and in the historical development of relationships between audiences and entertainers. Music moves people. Its effect is highly personal and often highly social. When the band shows its listeners respect and treats them as they want to be treated, people want to give back because they have learned through a lifetime of social experience that in any functional relationship you have to give as well as take.

______

I’ll be in Vancouver all week so forgive light and maybe not even any posting.

UK-based music industry news subscription service, Record of the Day, is running a survey asking people buying the Radiohead record how much they paid and why. You can read MANY sample answers. I have too much to say about their data to say anything and still get done what needs to be done this week, so I’ll just post a few to give you a feel for how rich and value laden the the audience’s economic relationship to music is. Radiohead have opened a broad public discussion of this whole morality play. All those tacit values we have about our relationship to music, to artists, our rights and obligations, our value to them, how some people just don’t think about this stuff while others obsess on it, and the many logistical issues at stake are laid bare:

£0.00 (United Kingdom)

I’m not even sure I like Radiohead, I found OK Computer really hard going. So I’m taking a (free) punt and seeing what it’s like, either I’ll become a new fan or continue on my way.

£15.00 (United Kingdom)

Paid this amount not only for the music but also for the chance to participate in the experience of consumer spending power being kindly given a boost by Radiohead’s new business model. That to me was worth more than the music alone. As all the pundits keep saying, musicians will make money from live events because of this move – well, this felt like participating in a live event. The fact we were allowed to choose gave the experience more value – as the exercise meant the value of money became, for a moment in time, subjective.

£5.00 (United Kingdom)

I think it’s a very smart move – Radiohead have taken a huge moral high ground but have also given their fans the opportunity to do the same.

£40.00 (United Kingdom)

boxset. great idea. moving the industry forward. i hope music fans are honest.

£0.01 (United Kingdom)

It was quite a half-hearted offer from Radiohead – they should have actually GIVEN the album away, instead of offering a pay-what-you-like deal which makes a ton of money for credit card processing companies.

£0.00 (Canada)

I’ll listen to it first. If I like it, I’ll buy it when it’s formally released in three months or so. That’s what I do with most releases that catch my attention. I also write about music, so the artists get some honest feedback that, assuming the “product” is good, will further help sales and distribution.

£1.50 (United Kingdom)

Tried to pay £1.55 to make it an even £2.00 with the card fees, but their website only charged me £1. I’ve paid enough for all their gigs to deserve their music for free!

£5.60 (United States)

I actually meant to pay less, but I accidentally converted Dollars into Euros and not Pounds like I should have. Basically, I meant to pay $8 American. My bad. Oh well. I’m just glad to be able to finally hear the album.

Kudos to Record of the Day for making this information public instead of hoarding it for themselves! And extra kudos to them for the “Sign up here to get the results via email” link on the side.