Nine Inch Nails’ Ghost I-IV was the best selling MP3 album on Amazon.com in 2008 despite legally being available for free download under Creative Commons licence. Seems to me the music market is working just fine that a good product sells well. Why, then, government should do something about digital music copyright and downloading?

Nine Inch Nails' Ghost I-IV album cover

Nine Inch Nails' Ghost I-IV album cover

I’m seriously asking you for an answer to that question, not setting myself up to give you an answer. I’m a government regulatory analyst, and I know a little about regulations. Maybe just a little, but at least a little. However, I’ll speak for myself here and not government.

One of my main philosophies about regulations and government involvement is not to get involved when we don’t have to get involved. Seeing NIN’s success above, I am tempted to tell anybody complaining about lost revenue from free downloading to try a new business model of giving it away while also making it available for sale. After further analysis, I will!

Amazon is the second biggest seller of MP3s next to iTunes, though selling only 10-20% of all MP3s (US sales only for fair comparison), pending which source you believe. However, it is a big enough sampling to make the result valid. Imagine how much you’d trust a poll of 10% of all Canadians or Americans instead of one of these 1,100 people polls that’s within 2.5% 19 times out of 20.

Amazon does differ from iTunes with respect to what is called Digital Rights Management (DRM). An MP3 you buy from Amazon will play on anything you have whereas iTunes tracks only play on select Apple products. Amazon also doesn’t sell any music with DRM due to the record labels’ greed so a lot of music NIN might have competed against wasn’t available for purchase on Amazon. However, there was plenty of competition. Viva la Vida by Coldplay, top selling album on iTunes, was available on Amazon… at #2. So throw out that argument. Despite Amazon’s relatively small marketshare, the sampling is accurate, as claimed.

Coldplay

Coldplay

Ghost I-IV was not released on iTunes in case you wanted the reverse comparison. I can see the logic why iTunes would not take it given it was available for free download, but I’m not sure if it was NIN who decided not to release it there. Still, revenue lost for iTunes and they should pay attention if it were they who did not take it.

Reviews, particularly customer reviews since it is they who buy the albums, can really answer the product quality question with regards to sales. Rolling Stone reviews for Ghost I-IV was at 3.5 stars of five, just like reviews for Viva la Vida. Interestingly enough, customer reviews on the same site was 4.5 stars for Ghost I-IV and 4.0 stars for Viva la Vida. On Amazon, given they distribution of ratings, if you do the math, you’ll see Ghost I-IV edged out Viva la Vida 4.11 to 4.03 (as of Jan 28 evening). Now you know why Ghost I-IV edged out Viva la Vida.

There is the moral argument to do what is right to protect intellectual property. Some musicians are upset people swap their songs and give them away due to lack of copyright laws deterring the public from doing so. Considering the small portion of musicians in this situation among the whole general public, I’d bet anything the social joys the general public derives from being able to swap digital music tracks outweigh the social pains incurred by the musicians. Besides, people are doing what’s right in the NIN case in buying it, still, and success was obtained with a good product.

Next is the astounding fact that NIN’s main audience is the young Net generation who are Net saavy and who would no doubt know how and where to download the free album. That’s the free album they hyped to be available for free, not kept quiet about. This wasn’t a case where old people dominating the demographics and scaring us about health care’s economic burden in the next decade were buying cause they didn’t know how to download torrent discographies.

Honestly, I don’t know what to make of NIN’s success. Is this a case of Freakonomics where economics were just wacky? Probably not. How’s about Predictably Irrational hidden forces that shape our decisions? Maybe, but I’m more optimistic than that. Free usually makes us do other things rather than pay for the free stuff. However, this is a perfect case where behavioral economics trumps economics that’s for logical Vulcans who would never do such a thing as pay for free stuff. Behavioral economics wouldn’t have to explain this, for one thing, just use it as an exact model. How’s about Wikinomics, the economics of free? Well, it’s not mass collaboration, but it is the economics of free. Emotional Intelligence? Very possibly. There is an innate goodness natural to all of us. I like to believe that even if people weren’t breaking the law to get NIN’s album for free, they knew the right thing to do was to buy it and many did. Compound that with the digital generation main audience that has such a sense of entitlement to everything, want everything for free and demand instant gratification, I must say they have regained some level of respect from me.

But does it matter what is the reason behind NIN’s success? Maybe, but I’m willing to bet it’s nothing so unique it won’t work with other such attempts by other music artists. All I know is I have one darn good example that trumps a lot of things. I only wish I had more such examples of a well-known band putting out a quality product that could compete with most others and would likely show similarly successful outcomes, though I don’t mean #1. NIN’s #1 result might have been a small anomaly to be ranked so high, but I don’t doubt good success can be had by other quality albums popular with people. That is, I think this success can be replicated by similar business models done by other good bands with good products. But having NIN at #1 shows the model can work at the extremes, not just in the middle. That’s all I need to know to say that the Canadian federal government should burn its Bill C-61 copyright law reform efforts for winter heat.

It’s also enough for me to tell anybody wanting such copyrights to get with the times, get a new business model or, if they annoy me enough, to get a better product!

If you don’t agree, please, do tell me why in the Comments section below. Thank you.

p.s. As self-disclosure for factors potentially influencing my point of view, I have a small interest in songwriting and recording. It is not my main source of income and I never want it to be. However, I will pledge right here that if I ever release any music recording, it will either have Creative Commons free download to it only, or any money made from it will go to charity in its entirety… and you can quote me on that!

Flesch-Kincaid Grade Reading Level: 8.6

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