It may seem counterintuitive, but a growing body of evidence supports the argument that free content shared online leads to more people buying your stuff.
In the music industry, this realization is finally beginning to take hold, showing even the most frugal bean counters that content distributed free of charge generates more revenue.
For years, the music industry has been operating under the false (yet once true) assumption that music was its core product. Social media, file sharing and changes in how content is distributed changed that.
Earlier this year, Seth Godin wrote a blog post outlining the lessons businesses could glean from music industry woes. The lessons Seth oulines still hold, but another important realization is beginning to surface: Free content makes money.
A recent post in Digital Music News by Paul Resnikoff outlines some of the lessons learned regarding the leveraging of free content in the music industry.
In Paul’s article, he quotes Scott Cohen, cofounder and vice president of International at The Orchard. The Orchard is a music licensing and distribution company that facilitates the delivery of audio content to hundreds of digital stores and mobile carriers. During a panel discussion at Popkomm earlier this month, Scott shared the following observation:
“It used to be that you gave away a free track to sell the other stuff, like the album. Now, when we give away a track, that track sells more.”
This realization is huge. Giving stuff away for free is risky business to consider but, as Paul points out, savvy musicians, promoters and investors in the music industry are beginning to understand the benefits of including free content in their business models.
Benefits of shared aka “free” content include:
- More engaged consumers
- Permission in the form of registration information and feedback
- Increased merchandise sales
- Increased music sales (really)
If you apply this lesson to other businesses, it ends up looking like David Meerman Scott’s example of Brand Journalism. But, what about other types of businesses, like those in B2B sectors? What are other benefits of giving away free content? How can businesses be convinced that free content actually increases profits? Are there examples to the contrary, pitfalls to be avoided? Please share.