Shadow play: artists moving to “the dark side”

Last week’s news about DJ Shadow giving away a bundle of content through BitTorrent and potentially making money from it was a big story. But with many labels unconvinced that there is a firm business model here and that it’s little more than a headline-grabbing gimmick, BitTorrent has work to do if it wants to win more high profile converts to its cause.

To recap the details first: DJ Shadow is giving away a bundle of digital content including three tracks from his new Hidden Transmissions album, plus archive photos and video footage.

Anyone downloading the bundle through BitTorrent will also be offered a piece of software from a BitTorrent advertising partner – users in the UK get RealPlayer, although it varies by territory. This is optional, but RealPlayer will pay BitTorrent for every download, with Shadow getting a cut of those payments.

He’s certainly not the first music artist to release a BitTorrent bundle – Counting Crows, Death Grips and Pretty Lights are other recent examples. The difference here is the chance to get paid for it.

“This is the first time in history that anybody’s tried to monetise the BitTorrent ecosystem in a way that naturally plays into its value,” the company’s marketing boss Matt Mason told us last week.

“We don’t know if this is going to work, we just want to try something new and see if we can figure it out. If it does, it’s huge: it changes the future of the music industry and opens the floodgates for all kinds of creators to see this as a new way to monetise content.”

BitTorrent’s pitch to artists, managers and labels is mainly about sheer scale – the chance to put their music in front of its 150m active users in a way that might actually make money. But how is that pitch going down? It’s fair to say there remains plenty of scepticism in the wider industry.

Some compare the BitTorrent/DJ Shadow partnership to Grooveshark’s licensing deal with EMI and smaller labels: a fig leaf of respectability on a business model based on massive levels of copyright infringement – and also an attempt to get good PR before accusing other rightsholders of being inflexible and unreasonable.

These views should come as no surprise to BitTorrent. But even among labels who’ve listened to its pitch and been open to a potential partnership, there are doubts – these ones based on whether its proposed business model has legs, rather than any intrinsic distrust of the company itself.

“It’s not a business model, it’s a one-off gimmick. While I can see it working for a few people, I can’t see it working out in the long term,” says one label insider familiar with BitTorrent’s plans.

These doubts come back to the question of scale. For example, 150m active users is a lot of people (10 times the size of Spotify), but where are they based – Russia is thought to be the largest market – and how relevant are they to music – as in how many of them are downloading music rather than films, TV shows or games?
BitTorrent’s pitch is based on its ability to expose an artist to a huge audience, but is that audience large and relevant enough for the music artists who might take part in such promotions? A large audience in one (free) context doesn’t necessarily translate to a loyal, paying fanbase in another, as the original Napster showed.

More importantly, though, can the bundled software download model really pay off? How many BitTorrent users are likely to even consider switching their existing media player to RealPlayer, for example? These are tech-savvy people likely to be aware of Tomahawk and open alternatives, let alone iTunes.

It’s easy to opt out of the software download part of DJ Shadow’s bundle, but if the vast majority do, the artist doesn’t make much money, and the likes of RealPlayer probably won’t run such a campaign again.

All this is before you even consider the thorny question of whether artists encouraging their fans to download and use a BitTorrent client to get their content bundle is a wise thing to do – will their second download be the full Hidden Transmissions album, in this case?

In short, there are lots more questions than answers about how well BitTorrent’s bundles can work when it comes to directly making money for artists – and they’re questions that aren’t just being asked by veteran label execs who hate BitTorrent.

And yet… BitTorrent’s Mason was upfront in his admission that this is all experimental for now. The company is planning to publicly share data on how the DJ Shadow campaign goes over the coming weeks, and it’s planning to run more campaigns with other artists, filmmakers, game developers and software creators in the months ahead to keep evolving the model.

Matt Mason makes a much more convincing figure than Megaupload mogul Kim Dotcom claiming his own still-to-be-launched Megabox service will be “changing the music industry forever and giving the power to the artists”, it should be noted.

Perhaps this is the best way to look at BitTorrent’s efforts: don’t judge DJ Shadow’s campaign until some figures are released.

Don’t be surprised if other artists follow in his and Counting Crows’ footsteps, especially if they control their rights and have a digitally savvy management team behind them willing to take risks.

So, judge BitTorrent by the way its business models for artists evolve over the coming year, rather than just this particular campaign. Optional downloads of media player software may not pay off, but iterative experiments are much more useful and interesting than Megabox-style vapourware boasting.

Or to put it in a nutshell: the two main objections to BitTorrent’s music pitch are: a) we don’t trust them; and b) we don’t think their business model can work. Both would be better judged six, nine or 12 months down the road, rather than now.