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.



  1. […] Plans… and Pants to Match Now proudly feeling ways about stuff! « The Music Industry is Dying. I’ll Get the Shovels and Champagne. My Thoughts on VerBruggen January 28, […]

  2. I write this as a dude who actually has a degree in music business and spent lots of time studying intellectual property and hoping to profit from intellectual properties.

    Record labels have nothing to do with intellectual properties. They’re just big shitty banks that view artists as commodities and consumers as the enemy. They loan money, the artists who aren’t pop never fill back in the pit that is the recoupables, the artists are then dropped and generally unable to do much else because of the debt, and then they vanish and start selling cars or drinks. Ergo, the labels have so furiously protected the intellectual properties that no one can have them. We won’t buy without label backing, right? Why, then, even allow the possibility of sales.

    I have some friends who have a minor label contract and also sell via iTunes. These friends will often give me a backdoor to their website through which I can download their tunes. Recently, I went to iTunes and paid $4 to download an EP. See, I’m not hostile to the concept of paying, I’m just not interested in shelling out $12, $16, $20 so an artist can get $1, assuming the recoupables are covered. Give me a chance to pay the artists themselves for their work, even if someone else is getting a fraction, and I’ll do so. No lawyers, no bullshit, no dinosaur industries.

    But it’s really better not to go that route. Capitalism is scary. It’s always advisable to get the govt involved so that winners and losers can be selected.

    And I haven’t even touched on the real future – small companies that are large enough for some economies of scale and distribution deals – in this meandering rant. I’ll pass that ball to you, Cap.

    • I’m sure the major labels are aching a bit now that they’re the ones running their collective asses off for whatever scraps they can grab. I’m thrilled to see the continuing shift from supporting a many-mouthed leviathan to supporting an artist directly.

      Sure, with more music out there, it may be tougher to “hit it big.” But really, does anyone think the odds have slipped that much? The only difference now is that we’re more aware of how many small-time artists there are out there as opposed to the good old days of the one-way stream when those who weren’t on a label may as well have never existed.

      I’ll be doing some amateur crystal balling in the near future, Ulysses. Thanks for the great comment. It’s always good to see you.

  3. This whole argument was well articulated and erudite. I’m afraid that I couldn’t do any more than agree with you because I have no real knowledge other than what you and The Pirate Bay (which I use every day but more for movies and tv), tell me.

    You belong on the pages of Rolling Stone brother man. And I mean that sincerely.

    • I’m probably telling you pretty much the same thing that the Pirate Bay is telling you, other than I’m not advocating piracy so much as I am pointing out the flawed arguments behind saving an industry that has no idea how to save itself.

      It would be one thing if this industry had a history of being supportive of its artists and customers. But being that it’s been a colossal, greedy prick for 50 years running, who gives a shit if it goes under?

      Thanks for the compliment, Scott. Personally, I think RS is in bed with The Man far too often for my liking, although they’ve hosted some mighty fine writers.

  4. […] This post was mentioned on Twitter by AMISS , Aaron Bethune. Aaron Bethune said: The Music Industry is Dying. I'll Get the Shovels and Champagne:… http://fb.me/RteRL6Fi […]

  5. Good comment that touches most of the bases. I especially like the way you slipped in a shot at Cussler onto a national magazine’s website. Nice touch.

    This National Review douche-bag seems to be just another on a long list of toadies making a living defending whatever the rich & powerful do to increase or maintain their wealth & power. These kind of enablers make me wish Cossacks would ride their horses into Washington, Wall Street and Hollywood and decapitate every “capitalist running dog lackey” they find.

    I don’t get this “graduated response” nonsense, but I’m sure it boils down to one thing; giving undeserving entertainment industry cocksuckers more power & control while taking away rights & freedoms from the ordinary person. Whatever the plan is, anything short of shutting down the Internet, or putting it the hands of the very companies seeking to control (aka destroy) it will achieve nothing. Even then, it may not work.

    You can’t force somebody to buy a product, especially one they can get for free, without either seriously mind-fucking them, (see: cable TV) or turning a nation into a totalitarian state with corporate profit as its top priority. (see: America) Whether they realize it or not, this is where their policies are heading.

    Computers didn’t kill the music industry. They only sped the process up. The music industry has been making suicide attempts for decades. Not that it’s actually dead. Profits are slipping, but it still makes more money than it deserves, but far less than it THINKS it deserves.

    Just like their movie business brethren, they mistakenly bet everything on blockbusters. Listeners’ tastes and artists’ sounds continued to diversify and segment, but they insisted on cramming “big things” down everyone’s throats. People might tolerate some of it for free, but little was inspirational enough to pay the kind of money the industry was demanding.

    They priced music out of the reach of their target audience. The average CD in my collection cost $26 bucks. But somehow, I could buy CDs by Indy artists for half that, despite puny fan bases and tiny economies of scale. The sound quality wasn’t the same, but the entertainment value was higher.

    One of my favourite albums of the 90’s was recorded on 4-Track by some kids (http://www.myspace.com/ericstriphome) in their basement between doobies. I bought their CD halfway across the country at an Indy record store for $10. That was probably my turning point. If some teenage potheads made the most inspiring stuff I heard all year without a major label or retailer being involved and charged me $16 less, what good were the big boys living in mansions? The entire music industry instantly became an expensive, unnecessary, roadblock between me and the music I wanted. The only thing MP3s changed for me was that the ensuing battle just added “evil” to my list.

    The abusive, ego-maniacal, practices of music industry dictators were unsustainable. Eventually, they pissed off so many musicians (aka indentured servants) and so many customers (aka suckers) that revolution was in the air. Computers proved useful, but the same outcome would have arrived with 80’s technology, only slower.

    If, at any point, they humbled themselves and restructured around supplying niches with physical recordings of music they wanted instead of inventing more Britney Spears to shove into everyone’s ears, not only could they have survived, people might not know what an MP3 was. Even now, it might not be too late. Shockingly, enough people are STILL willing to buy actual CD and Vinyl recordings to turn a mild profit.

    Like Hitler after Stalingrad, the music industry needs to realize the war is lost and start negotiating surrender instead of fighting to the last man for a cause they can’t win. But they won’t. They’d rather die for the cause of making people buy what they want to sell them. Ultimately, they’ll initiate Operation Clausewitz in a futile attempt to cling to power as everything burns down around them.

    • Thanks for the very thoughtful comment and for noticing my Cussler cheap shot. I can only hope that a few NR readers caught it and chuckled to themselves, thinking “That man does write some shitty books.” Of course, this could be the reason that some of the classier online venues have their comments shut off.

      I don’t mind capitalism as long as everybody operates under a free market but there’s nothing “free” about rewriting laws to favor certain industries, which goes on all the goddamn time. There’s no consumer protection in this country, just a whole lot of assumptions that maximum government interference will work out best for those who matter. The average American’s money just doesn’t talk loud enough.

      The MPAA is making things worse with their obsession with “release windows” and little plastic discs. If they had any intelligence they might have viewed the music industry’s woes as a cautionary tale rather than a business plan. None other than the forward-thinking Bono, in his op-ed for the New York Times (linked in the post), suggested they do everything the music business did wrong, only harder.

      Apparently, God and our government both have a soft spot for fools.

    • “Like God, a Free Market is a myth perpetrated by the few to manipulate the many, who wish it existed, into doing their bidding.” -Sedate Me

      Nothing even remotely approaching a Free Market has existed in America since Mark Twain coined the term “Gilded Age”. The elites figured out a long time ago how to manipulate the economic and political systems for their own benefit (and theirs alone). Today’s Robber Barons make those of the First Gilded Age look like amateurs. They’ve got it down to a science. The public are the lab rats who get handed the bill for the experiments preformed upon them that make others ludicrously rich, even when they fail. (See: Too Big To Fail)

      In this case, the entertainment Robber Barons get their government bitches to punish us purely for not buying enough of their product, all the while prattling on about “morality”, “theft” and other completely hypocritical bullshit.

      Just look at the type of person it’s coming from. This hypocritical motherfucker!!! http://en.wikipedia.org/wiki/Edgar_Bronfman,_Jr.
      He “earned” his fortune by inheriting it from his grandfather. Gramps made his money working with the mafia and every other Boardwalk Empire motherfucker smuggling Canadian booze during US prohibition.

      His entertainment empire is built on smuggling a drug declared illegal and immoral by the US government. He continued the family legacy with dodgy financial dealings that resulted in an insider trading conviction. He somehow avoided jail and continues like nothing happened.

      Motherfuckers! Motherfuckers all!

  6. It is a well-reasoned essay CLT and I find it compelling. The times they are a changing (I am paraphrasing someone here). The genie is not going back in the bottle, artists that accept that fact are proving that it can be done and done well. Well played sir.

    • I’m not sure who you’re paraphrasing (Professor Griff?) but he’s right: things will never be the same. (And now you’ll have a song stuck in your head.)

      Thanks for the compliments, RXJ. Usually there’s no going back but it looks as if the major entertainment industries are aiming to sue and legislate us back to the Stone Age (B.CD.)

  7. […] rant a lot about the music industry. And it never fails to give me plenty to rant about, especially when label […]

  8. I miss ♥ ♥ ♥ Clifton ♥ ♥ ♥.

    • I do, too. I’ll post another of his ramblings soon. He was much more prolific when I had 15-20 hours a week to do the blogging thing. The good news is I’ve got 7 or 8 pieces just laying around the hard drive.

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