Better Than “Free”

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Hundreds of startup companies came to the marketplace each year.  The biggest challenge these brave startups faced is to compete with “free” illegal alternatives. As the sellers of cable television have known for thirty years, and the sellers of bottled water for much more than that, there is nothing impossible at all about “competing with free.”[1] One company has managed to thrive against “free” by simply being more user friendly than its illegal competition.  As experts predicted when Apple launched the Music Store, it could beat “free” by being easier than free is.[2]

A different approach to competing with free was successful for Indie911.  Indie911’s CEO, Justin Goldberg, believes traditional gatekeepers were an inefficient way of allowing music to flow to the public and sought to create a place where the public could find artists that were slipping through the cracks.[3] In his tenure as an A&R person, songwriter, and employee of Sony Music Publishing, Mr. Goldberg took issue with the fact that less than 1% of the music out there would ever be heard.[4]

Sadly, many artists fall through the cracks at large record labels and receive little in the way of promotion.  Furthermore, Mr. Goldberg added, politics, corporate concerns, and egos each can play a role in a label’s decision to promote a particular artist as well.[5] Due to the sincerity of its unique mission and rapidly expanding roster of artists, Indie911 quickly became one of the most popular independent media destinations on the Internet, generating almost four million monthly page view since its launch in 2004.[6] With revenue splits of music sales as high as 80% going right back to the artists, Indie911 has grown to host over 25,000 artists and labels.[7]

Mr. Goldberg’s biggest concern at the moment is with the Internet marketplace as a whole.  He reasoned, “[t]he Internet is still very new, only about 8 years old, when compared to other technology like the telephones, cars, or railroads.”[8] Being such a young technology, it is difficult to predict in changing market conditions.  Unfortunately for Indie911, the poor state of the economy has caused Internet-based businesses to lose some of their resolve.  Furthermore, the market has affected startup business’s funding levels, and some deals that were already in play are falling through.  This is a particularly tough market climate for smaller players because venture capitalists are tightening their money in this area.

[Photo by Neubie @Flickr]

[1] Lawrence Lessig, Free Culture (2004) at 302.

[2] Id.

[3] Telephone Interview with Justin Goldberg, CEO, 
Indie911 (Mar. 17, 2009).

[4] Id.

[5] Id.

[6] Id.

[7] Id.

[8] Id.

*Ian Gibson, Esq. is an attorney licensed to practice in the state of California. This article is for informational purposes only and is not intended to constitute legal advice. Visiting does not create an attorney-client relationship. This material may be considered advertising under applicable state laws. Copyright © 2012-2013 Ian Gibson, Esq.

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