I read on Slashdot this morning that Phish is selling soundboard recordings of its live concerts online, in unrestricted format.
For $10, fans can download concerts in MP3 format, or for $13, they can download in lossless format.

Record industry and bands take note: People are far more likely to have heard of whatever artist you happen to be listening to right now than they have Phish. But chances are Phish makes more money than whoever it is you’re listening to right now. The Rolling Stones had problems selling out venues on their last tour. Phish never has problems filling the house.

I’m not a Phish fan. To my knowledge, I’ve only ever heard one Phish song, back in 1996 when they had a song in heavy rotation on the AOR-oriented station I listened to in college. They’re a quirky alternative band. I like quirky alternative music, but my favorite quirky alternative bands are quirky in different ways than Phish.

Phish’s absence from most radio stations tells you that a lot of people aren’t into their quirks. Yet a lot of other people are. Phish proves that narrowcasting, as opposed to broadcasting, can be profitable. You don’t have to be a manufactured sellout to make it in the industry. Phish was around long before the current crop of manufactured boy bands, and after all of this crop is just a memory like the Bay City Rollers and the New Kids on the Block, Phish will still be making records and touring.

So what’s the secret? The willingness to sell unprotected copies of its concerts online gives a good clue. Phish allows things like tape recorders and cameras in their concerts. And if you want to trade live tapes with friends or give them away, that’s fine too. So people can get introduced to the band very cheaply.

How often have you heard a new band, liked their stuff, and then run out and bought more of it? I know I’ve done it a lot. But if I only kind of like a band, I don’t become obsessed, because I don’t run out to buy a $15 disc that I kind of liked. But when a friend is free to give me a copy of something I kind of like, I get more chances to acquire a taste for it. Obviously, not everybody who copies a Phish concert becomes a fan. But the economics show that some people who copy Phish concerts must end up running out and buying records and concert tickets.

Still not convinced? The Dave Matthews Band has a similar liberal policy towards taping shows, and you can download all the DMB concerts you want, for free, at archive.org. You probably have heard of them. I know you’ve heard them on the radio.

People are going to copy the Phish MP3s they download. Friends will split the cost of downloading one concert and then make copies for each other. I know that, and I’m sure that Phish knows that. They ask people not to do that. Some will anyway.

But the companies that sell dirty JPEGs online don’t protect their wares. They’re smoking crack if they think their stuff isn’t getting passed around. A cursory glance at the headers tells you the whole alt.binaries.sex tree is one massive copyright violation. But the players you read about in the mainstream press in the mid-’90s are the same players you read about in the mainstream press today. Piracy isn’t putting those guys out of business. They get people hooked on their product and they come pay for it when they can’t get enough of it for free.

Doesn’t music pretty much work the same way?

I’m not saying this makes piracy right or ethical, but if someone pirates something and then ends up buying more stuff than they pirated in the first place, then the copyright holder isn’t exactly hurt by the action.

About six years ago, there was a Web site called The Cure MP3 Audio Archive. You could go there and download everything imaginable–basically everything that had ever been recorded by the band that didn’t appear on the albums you could buy in record stores–from demos Robert Smith, Porl Thompson and Lol Tolhurst recorded when they were in high school and called themselves Easy Cure to recordings from their most recent concerts. Eventually a band representative asked them to remove all of the studio recordings. They complied. Then a couple of months later, Elektra Records stepped in and shut the site down completely.

I’ve often wondered what would have happened if Elektra, or Robert Smith himself, for that matter, had simply bought out the archive and turned it into a pay site.

I think we’re about to get an idea.