Archive for January 28th, 2011

h1

The Music Industry is Dying. I’ll Get the Shovels and Champagne.

January 28, 2011


Robert Verbruggen over at National Review Online asks “Can We Save the Music Business?” The first obvious question is “Why?”

[This post is nothing more than a reprint of my overly-long comment left at NRO. I’ve emphasized a few things with BOLD and corrected a couple of grammatical errors, but otherwise it’s intact.]

An “effective” plan?

I don’t know how anybody could willingly believe that the music industry legislating itself back into business with the aid of an all too cooperative government will actually save them for eventual implosion. All this would do is stick them on life-support on the taxpayer’s dime.

Equally stupid is the assumption that a graduated response, especially one that aids one industry (recording) while punishing another (ISPs) would be any less troublesome than straight-out “deputizing ISPs.” If both the government and the entertainment industries are involved, there’s is no way that any internet watchdog can ever be considered “independent,” as is dubiously stated in relation to France’s current anti-piracy program.

Speaking of which, you cite a 53% reduction in infringement (at least according those polled) but fail to provide any numbers showing a correlating rise in music sales. My guess is that there will be little change or at best, a short-lived uptick while everybody figures out how to get back into the free music business. This may come as a shock to the record labels, but it won’t surprise anyone who is aware of the fact that a pirated album does not equal a lost sale.

More troubling is the fact that your internet usage information is now in the hands of both the government and some very self-interested parties, both of whom have shown an ugly willingness to abuse the public’s trust.

Every dollar spent (taxpayer/music industry) on combating piracy is a dollar wasted, one which would have gone to better use pretty much anywhere else. Every time a file sharing service or data hosting site gets shut down, another two pop up. The music industry continues to view online piracy as the equivalent of a guy selling burned discs out of his trunk. They cannot seem to understand that this is millions of individuals acting alone, rather than under the control of some overriding directive.

They also don’t seem to understand that these “pirates” aren’t making any money off these “transactions.” What little they do understand of it causes them to scapegoat hosting services and ISPs. They know this isn’t directly their fault but I think they believe that going after services earning money will allow them to show some return on their lawsuit investments.

The more draconian the action, the further underground file sharing goes. New hosting will pop up to replace RapidShare, MegaUpload, et al. Limewire will be succeeded by others. With every step they fall further behind. Hosts will operate under masked IP addresses and innocuous URLs. And when they finally do decide to sue or kick someone off the internet, the only people they can victimize are those who are that many steps behind themselves. This is why they end up dragging clueless grandmothers and 8-year-olds into court.

Once everything is disguised enough, they’ll start booting people off for false positives. The government and the record labels have already proven they’re far from tech savvy and will start harassing citizens who’ve never considered piracy just because of a spike in usage.

They also fail to understand that kicking people off the internet will do nothing to increase their sales. Do they honestly believe that Joe Q. Pirate is going to trot to the nearest store and make up for his infringement by purchasing several shiny plastic discs? He’s not going to be able to buy digitally after all. And trust me, he’ll find another way to get back online. He may be dumb enough to get caught but he’s still smarter and faster that the ad hoc committee pursuing him.

There’s no equivalent for “free.” Just because someone downloaded Lady Gaga’s latest for free is not an indicator that they would have purchased it if there were no alternatives. Lots of people get stuff they don’t particularly want or need just because it’s free. It’s like going to a garage sale and picking up a half dozen drill bits and some Cussler paperbacks from the “free” box. It doesn’t necessarily follow that Black and Decker lost a sale or that I would have grabbed two Cussler books down at Barnes and Noble otherwise. Maybe I just figured you can’t have too many drill bits and I was tired of reading well-written books.

And as for the “poor artists” the labels are constantly using as penniless strawmen in their arguments? Well, he’s got fewer options and potential customers thanks to their actions. Fewer hosting sites. Fewer people online.

The claim that artists somehow deserve to get paid is just plain stupid. That’s a holdout from the good old days of the music industry, where they’d state that as an excuse to levy fees on blank tapes and CDs. But they’ve never been too keen on actually paying their artists. There are hundreds of stories of bands that got screwed by their labels, whose unrecouped amounts never seem to go down and how clever accounting and label finance opacity has allowed them to hide their gains from the prying eyes of their stable of musicians.

Look at the wonderful things Warner Bros. did to Too Much Joy.

Not only that, but if you’re getting into art to get paid, you’re doing it wrong. If you manage to make a living at it, congratulations. You’re part of the 1%. No guidance counselor ever recommended a student drop out of school and buy a guitar. No parent ever breathed a sigh of relief when their offspring told them they were quitting college to form a band. No one owes an artist a living wage. Art is supported, not purchased. The record labels have a hard time differentiating between “product” and “art,” which explains why most of their output is considered lousy.

I’m not saying music should be free or that piracy is ok as long as it’s from a normally unprofitable field. I’m just saying that demanding upfront that your contribution to the music world immediately start showing positive returns is an annoying combination of false entitlement and ignorance.

This sentence is troubling: “...if we want artists — and, by extension, everyone who works with and for artists — to be paid for their creations…” This is part of the music industry’s problem. While piracy is bad for their business, and by extension, artists, ensuring that everyone else on the overextended food chain gets their cut is unsustainable in this day and age.

The only artists that can feed this extended family at this point in time are the top 5-10% of their roster. Everyone else gets to wait for minute amounts of royalties to make their way down from the top, spending years attempting to get recouped and finally start making money on their own.

At some point you, the artist, get a small slice of whatever's left after taking care of everyone else.

With the distribution options available to artists today (bandcamp, Facebook, Myspace, Beatport, Amazon, iTunes, etc.), I see no reason why any of them need a major label to act on their behalf. Some people (mainly record execs) argue that without their assistance they’ll never get heard. They tend to assume radio airplay is still the only game in town. (And it won’t be for much longer, not with all the fees being extracted by ASCAP, BMI, PRS, etc.)

But those people, the “everyone” that “works with or for” artists are the ones doing most of the complaining. They’re swiftly realizing that they could easily lose their non-essential positions. The artists themselves rarely complain about piracy as most of them realize it will only alienate part of their potential audience. (See also: Metallica.) The few artists that do complain are from the stratospheric layer of fully-recouped and highly successful acts. Bono (and U2’s management) spend a lot of time griping about the unavailability of “ivory backscratcher” money. Bono has even gone so far as to ALMOST recommend we follow China’s lead in privacy violation and institute their internet tracking program. (He stops just short of siding with one of the world leaders in human rights violations in his NY Times editorial. He just kind of throws it out there and, I assume, hopes that our overzealous government will run with the ball.)

Now, like many people on the other side of a long-winded rant, you’re probably asking yourself if I have any solutions to this dilemma rather than just reciting a litany of problems. It’s a good question. I don’t see any. The industry gouged customers, screwed their artists and tried to sue their way back into profitability rather than actually deal with the shift to digital. The only option they have is to deal with what’s left of their market. Short of building a time machine, heading back 15 years and trying again, I really don’t see that they’ve got many options left.

But there’s a larger question that rarely gets asked in these sort of editorials: WHY do we need to save the recording industry? Who, beyond those employed by it, really needs them to continue on in any capacity, much less in a legislated pseudo-return to the money-burning days of the CD?

I honestly don’t think that their collapse would do any lasting damage to the economy or society as a whole. The music industry likes to pretend (and are aided in their delusion by pieces like this) that they are the gatekeepers for ALL OF MUSIC and that without their endless generosity over the years, we would be a cultural black hole.

There are thousands of bands waiting to fill the void should they finally collapse and thousands of indie labels, self-producers and hosting services will to handle the distribution. Who knows? Radio could even re-emerge once freed from acrimonious performance rights groups. The only ones feeling the pain would be the former employees and the upper echelon of bands, who without a label-supplied collection of flunkies, would be forced to do some of the heavy lifting themselves.

The last question is for you, Robert. Why this sudden show of support for over-reaching and potentially dangerous legislation? In fact, why bother to stand up for the music industry at all? I can’t see anything else in your archive that would lead me to the conclusion that you’re a major label apologist. I’ve read other pieces of yours that I’ve enjoyed and agreed with but this one just seems to be horribly misguided at best, and incredibly ill-informed at worst.

I’d recommend checking out Techdirt.com where Mike Masnick has been putting together a solid body of work refuting pretty much every point in this piece and others like it. With a couple of quick topic searches, you can probably gain a better understanding of how the music world will continue to function just fine without the major labels.

-CLT

Advertisements