Guest Column: Craig Newmark's Lesson for Central Asia
By Sasha MeyerWhat can Patrick Kolla, Craig Newmark and Radiohead teach Central Asia?
A new business model: It's possible to work for free and still make a lot of money.
Patrick Kolla has been giving away his top-rated software since 2000. Already by 2002, his website was receiving 30,000 donations a month. It's a safe bet that the dollar amount of the donations exceeded that figure.
Craig Newmark, along with Jim Buckmaster, runs Craigslist, a wildly popular online business, with the sole purpose of making as little money as possible. Despite their efforts, Craigslist is quite profitable. With staff of 24, its revenues this year are forecast to reach $150 million. Moreover, the pair is busy resisting the pressure to make billions more by selling out: The company is valued at $2.4 billion.
A few days ago Radiohead pioneered the same concept in the music world by offering its latest album online free (Radiohead said that customers would set the price, donating whatever they wished to). On the first day of release, 1.2 million copies were downloaded, bringing in $10 million. Under a record label contract, Radiohead's cut would have been 10%. But, instead the band gets all of that money, instead of having to sell ten times as many albums to make the same profit. Also, this time more albums were sold in the first week than Radiohead's last three releases combined.
Singers and music groups in Central Asia could follow suit. They would have a curious advantage. Most of them aren't locked into contracts with record companies. The costs of offering music online are low and continue to drop. Today, $15 buys a web hosting package with a 2-terabyte monthly quota; that's equivalent to visitors downloading 400,000 CD-quality songs or 40,000 DVD-quality music video clips.
More good news: If the product is good, there is no need for any kind of marketing. Kolla's software has been downloaded by tens of millions of people and Craigslist has expanded to 450 cities in 50 countries – all through word of mouth.
Central Asian artists already have admirers in unexpected places. Fans in Peru and Mexico blog about them and an American musicologist offers a downloadable album of Uyghur music, complete with a beautiful CD cover.
And this new approach needn't be limited to performing artists. For example, some painters in Tajikistan already have a website with samples of their work. They could add downloadable, life-sized high-resolution scans that could be printed out. People throughout the world already decorate their homes with such artwork.
Nine Inch Nails is already following Radiohead's example. So could Musicola, Uly Tau and Shahzoda.
A new business model: It's possible to work for free and still make a lot of money.
Patrick Kolla has been giving away his top-rated software since 2000. Already by 2002, his website was receiving 30,000 donations a month. It's a safe bet that the dollar amount of the donations exceeded that figure.
Craig Newmark, along with Jim Buckmaster, runs Craigslist, a wildly popular online business, with the sole purpose of making as little money as possible. Despite their efforts, Craigslist is quite profitable. With staff of 24, its revenues this year are forecast to reach $150 million. Moreover, the pair is busy resisting the pressure to make billions more by selling out: The company is valued at $2.4 billion.
A few days ago Radiohead pioneered the same concept in the music world by offering its latest album online free (Radiohead said that customers would set the price, donating whatever they wished to). On the first day of release, 1.2 million copies were downloaded, bringing in $10 million. Under a record label contract, Radiohead's cut would have been 10%. But, instead the band gets all of that money, instead of having to sell ten times as many albums to make the same profit. Also, this time more albums were sold in the first week than Radiohead's last three releases combined.
Singers and music groups in Central Asia could follow suit. They would have a curious advantage. Most of them aren't locked into contracts with record companies. The costs of offering music online are low and continue to drop. Today, $15 buys a web hosting package with a 2-terabyte monthly quota; that's equivalent to visitors downloading 400,000 CD-quality songs or 40,000 DVD-quality music video clips.
More good news: If the product is good, there is no need for any kind of marketing. Kolla's software has been downloaded by tens of millions of people and Craigslist has expanded to 450 cities in 50 countries – all through word of mouth.
Central Asian artists already have admirers in unexpected places. Fans in Peru and Mexico blog about them and an American musicologist offers a downloadable album of Uyghur music, complete with a beautiful CD cover.
And this new approach needn't be limited to performing artists. For example, some painters in Tajikistan already have a website with samples of their work. They could add downloadable, life-sized high-resolution scans that could be printed out. People throughout the world already decorate their homes with such artwork.
Nine Inch Nails is already following Radiohead's example. So could Musicola, Uly Tau and Shahzoda.
Labels: Caspian, central asia, craig newmark, craigslist, nine inch nails, patrick kolla, radiohead
2 Comments:
Well, the Italians are already offering high-resolution images of some paintings, including Leonardo Da Vinci's Last Supper:
http://www.haltadefinizione.com/en/
There is this new company - Rcrd Lbl. It's a hybrid record label and blog; its releases are to be posted on the company's Web site for downloading, free and unrestricted by digital-rights management software that limits copying.
The company plans to make money through ads. Artists with songs on Rcrd Lbl won't get a cut of advertising associated with their music; they'll get modest advances for each song they give the label. These advances range from $500 a song for the least established artists, according to people who work in the music industry, and escalate for bigger names to around $5,000. Rcrd Lbl will divide with its artists any money that it makes from licensing their music to television shows, movies or TV commercials.
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