Taylor Swift, free-economics, and what business can learn about sharing
Apple Music’s new streaming service, launching next week announced that they would, after all, start paying royalties to artists whose songs are streamed during the free trial period. Largely thanks to Taylor Swift.
Swift is well known for tackling the streaming services on their fiscal attitude to the value of musicians’ work, and after penning an open letter to Apple, it seems this time, she’s won a battle for all musicians.
But most would agree that streaming music is better than pirating it, and that the ease of services like Spotify and of music sharing sites like Bandcamp are generally a good thing, both for listeners and for musicians. For musicians who are just starting out, being able to share music globally on social platforms or get crowdfunded for music projects on sites like Indiegogo allow them to build, not just an audience, but a RELATIONSHIP with their audience. It means they can ask people to pay what they think their music is worth, and the relational nature of it, means they can trust their listeners to see the value in what they do.
Once more established, this model of pay-what-you-think-its-worth begins to fail, and, as Taylor Swift rightly points out, a standard has to be set that establishes the worth of the product musicians make – whether it be classical compositions or pop songs.
In the same way in business, there’s a fine line between giving away what you do in order to win new customers or clients, and to establishing the value of your product. But it’s worth taking a cue from the innovations in music streaming and sharing to query whether allowing people to understand the worth of your product or service in its own right first is a way to build relationship that will then lead to long-term committed customers, in the same way as musicians might gain die-hard fans.
Taylor Swift fans love her all the more for standing up for her right to be paid because she has a relationship with her fanbase.
The moral of the tale? Sharing builds relationship and relationship is a strong foundation. If you build a firm relational base with your customers, they’ll be glad to pay for what you do, long into the future.