Wednesday, May 7, 2008

Ad Supported Music – Part 1

In a recent digital media survey concerning ad supported, subscription and pay per play business models, 62% of senior media executives stated an expectation that content creators will develop ad-supported business models by 2013. Twenty-five percent considered content creators would focus on subscription-based models and only 11% favoured pay-per-play services. While this survey did not specifically consider the pay per download model, the anticipation of an increase in adoption of ad supported services reflects current trends within the music industry and is a reasonable prediction. With this is mind it is pertinent to consider the ways in which such a model could develop, with the potential for both positive and negative attributes.

Traditional notions of free speech suggest that public spaces enable a market place of ideas which further the ends of liberty and justice. This conception of free speech depends on three vital assumptions – active public participation facilitated by equality in access for speakers; the mode of communication and its influence on audiences, and the independence of the opinions of speakers. The degree to which these attributes exist in the digital music environment reflects the potential opportunities for, or impediments to, free expression.

In this post I will outline some of the conditions least likely to realise the benefits cyberspace offers. In a follow up post I will counter this discussion with an outline of the ways that ad supported business models could be used to produce conditions favourable to creators and society.

The Worst Case Scenario
The use of advertising to supplement or replace direct consumer payments for music could have detrimental consequences if developed without adequate foresight. Where ad supported music services are owned privately and operated on a for-profit basis there are inevitably implications for free expression and democracy. These manifest primarily in a negative way by reducing the equality of access to speakers, in the selection of communication models and by influencing the content of creations. At present there is already a low level of competition within the legitimate digital music market. The natural tendency of capitalist corporations is to consolidate through mergers and in the event that a reasonable level of competition could not be maintained between web services, there would again be further threats to the diversity of culture, free speech and democracy.

In evaluating the ability of creators to equally access digital music services, the position of independent artists is of fundamental importance. Artists should have equal opportunity to communicate their works to the public and the same opportunities to produce financial rewards. Where such web services are related to major record labels there is an extremely high possibility that independents will not be given equal treatment. Even if such web services are owned and run separately from major content providers, the profit seeking motive of a private enterprise may nonetheless be enough to create a similar level of favouritism. This could occur in direct ways through limiting the participation of unsigned artists altogether or through indirect ways such as the allocation of prominent spaces, reviews and other promotional activities in an unfair manner.

The internet itself is a communication mode separate and distinguishable from others such as the mass media. Within this mode of communication a number of architectural models can be employed. For-profit, private music services are more likely to engage closed architectures. These include structures such as streaming subscription services, digital media stores and closed peer to peer networks. Whilst a continuum and matter of degree in each instance, a closed architecture by definition limits the ability of creators and consumers to participate by imposing requirements such as formal identification, entry payments and limiting the range of file formats. In addition to this, restrictions on the life span and subsequent uses of the content through the use of digital rights management technology influences the reception, interpretation and mediation of expression.

Another important factor in evaluating the ability for ad supported music services to achieve these goals is the independence of opinions expressed by creators. Two important factors are the strength of the connection between individual artists and commercial sponsorship, and the content of the advertising itself.

If implemented in a way that created direct sponsorship arrangements with individual artists, the use of advertising to supplement or replace the income of creators could amount to a level of commercialism within the music industry not seen even today. While many consider the present concentration of major record labels as harmful, by directly tying commercial sponsorship to the production of music and remuneration of artists, there would be a further constriction of free expression. If on the other hand, ad supported business models were connected only to the internet based music services themselves, there may be less influence over the content of creations and artists that are rewarded.

The nature of advertisements available on such web services also raises an interesting issue. It is feasible to suggest that whilst such services could cater to an enormous range of sponsors, that any site with a critical level of popularity will attract specific and demanding corporate advertisers. The size and the placement of the advertisements may be one factor to consider but the content and the nature of the advertisers is also a central concern. As Mike Masnick of TechDirt writes, advertising is a form of content just as content is a form of advertising.

Where corporate interests determine what music is produced and which artists will succeed, this inevitably results in a lack of cultural diversity and an absence of political or thought provoking material. This leads to less social and political awareness, therefore reducing civil participation and progress.

Further Reading
ArsTechnica, Report: ad-supported content will soon dominate digital media (5 May 2008) <> at 6 May 2008

TechDirt, Advertising is Content; Content is Advertising (19 March 2008)
<> at 6 May 2008

TechDirt, Content Is Advertising... On TV (23 April 2008) <> at 26 April 2008

TechDirt, On Content, Promotions, Basic Economics... And Loutish Statements (25 March 2008) <> at 27 March 2008

TechDirt, Just Because Content Is Free Doesn't Mean It's Worthless (15 April 2008) <> at 17 April 2008

Digital Music News, We're Number Three: SpiralFrog Claims Third-Place Download Crown (28 March 2008) <> at 30 March 2008

Wired Listening Post, Qtrax Inks Deal With Universal for Legal P2P Music (6 May 2008) <> at 7 May 2008

Christopher J Sichok, The Free Market: An Erosion of Free Speech, eLaw - Murdoch University Electronic Journal of Law, Volume 7 Number 3 (September 2000) <> at 6 May 2008

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