Posts Tagged ‘Major Labels’

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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

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Tom Silverman Condescends to Save Music Industry from Itself; Crap Internet Artists

July 27, 2010

Tom Silverman for City Councilman: Intensity You Can Rely On

[Thanks to Overconfident Orientalist for pointing me in the direction of this story. Also, thanks (sort of) to Sedate Me, whose made several points in the follow-up comment that I’m sure I’ll be rehashing. A quick note: any emphasis below has been added by yours truly. You know, to emphasize stuff.]

The long and the short of it is this: Tom Silverman, representing Tommy Boy, has come to the conclusion that the normal (read: rapacious) label/victim artist relationship is broken. The upshot is that he has a plan to fix it: a true, transparent 50-50 split with the artist on all income, whether it is online streaming, record sales, merchandise, licensing, etc. 

The interviewer starts things off on the wrong foot shortly into the introduction, when this statement rears its malformed head: 

“The basic recording contract upon which most of the popular music business has been based for the past 50 years is fundamentally broken. 

This is not the sentiment of one of the countless critics who throw stones at the music industry from afar, usually for vague philosophical reasons, but rather the pragmatic opinion of a true insider..” 

Consider briefly those throwing stones. Are the artists who have been complaining about being indentured-servants-for-life via the truly fucked “advance” system just a bunch of stone-throwing whiny-ass philosophers? Are those who run artist-owned labels tinpot soapboxers bitching just to bitch? Are all the millions of people who spent millions of dollars buying overpriced plastic discs and paying outsized service charges for live gigs just a group of misfits whose opinions can be waved away in a few dismissive sentences? 

Apparently so. And Tom Silverman agrees with interviewer Eliot Van Buskirk, when he marginalizes (by proxy) every bedroom indie artist who has ever recorded and self-published without the aid of a major label: 

“Who uses Photobucket and Flickr? Not professional photographers — those are hobbyists, and those are the people who are using TuneCore and iTunes to clutter the music environment with crap, so that the artists who really are pretty good have more trouble breaking through than they ever did before.” 

Well, if you wanted to get the unwashed internet to side with this brave new world of 50-50, you certainly couldn’t have stuck your foot any deeper into your mouth, Tom. Quite the feat of contortionism, as the rest of interview indicates it’s currently located deep within your ass. 

This is old news, though. Old school industries who have been rendered extraneous (at best) by the encroaching internet have pitched this fit for years. Those in the high-minded sphere of print journalism have been insulting their potential audience incessantly. Former DJs and talk-show hosts who have seen their audiences shrink have dismissed Twitter, Facebook, MySpace, etc. as moronic and its users as even worse. 

However, Tom goes further. Not content to simply bash millions of enthusiastic amateur photographers and musicians, he goes on to take a swing at Twitter and internet marketing in general: 

They’re not tweeting, they don’t give a shit about any of that stuff. They’re out gigging, that’s what they do. The word is spread through the shows — they’re not marketing through the internet.” 

He’s right about one thing: nothing works quite as well as live performance. Most artists (indie-wise) have already come to this conclusion. They’re out gigging incessantly and connecting with their scattered fans in any way possible. 

Ah. Those were the days. Nonsensical fashion. Nonsensical headspins. Nonsensical CD profit margins.

But Tom doesn’t think that works. Without providing any examples as to why it doesn’t, he expects the reader to take that as fact and write off the power of the internet as nothing more than some widely believed urban legend. 

What he’s really saying, though, is this: it doesn’t work for us. He hasn’t seen it improve anything for his major label artists. There are several reasons for this: 

1. The major labels’ inherent distrust of the internet. They already believe it’s composed solely of thieving morons, so why would they put any genuine effort into marketing via the web? 

2. The major labels have no understanding of the internet. See above. Thieves. Morons. It’s the unmovable force of an industry that desperately wants everything to go back to the way it was. To go back to the halcyon days of CD sales, before Wal-Mart, digital distribution and a bunch of pissed-off music buyers sided with the new forces rather than shell out $18 for 70 minutes of music, most of which was crap. 

(If “90% of everything is crap,” then you’re paying $18 for seven minutes of good music.) 

The labels are not unlike the mullet-headed 50-year-old who drives a primer-grey Camaro and rocks out to whatever the hell it is he was listening to back in the glory days of high school, when he was voted 2nd Runner-Up in the Prom King competition and nearly got to second-base with the B-team cheerleading squad co-captain. 

3. They’ve never really tried. Sure, they might see some bumps for the top 5% of their artists, but the top 5% are the only ones they’re willing to go out-of-the-way for. “Recouped” = GOD in major labeldom. And the only benefit of these actions has been to slightly increase sales on platinum records. 

Everyone else on the roster can go fuck themselves. They won’t get any help because “sales are down” and they’re already way in the hole, thanks to thousands of dollars worth of advances. So, the bands that could use the bump the most are being shoved into the cellar and told to behave. “If you had just had a hit song, we might be able to help you out.” 

Not only that, but because of their contracts, they’re prevented from making moves on their own to improve their situation. They can’t pursue independent licensing deals, switch labels or release new music until the label says it’s OK. 

Tom’s not done going after the internet yet, taking a swipe at Chris Anderson’s “Long Tail” theory with this confusing statement: 

“So it’s possible that around 35,000 releases didn’t even sell one copy last year. That means not even the artist or their mother bought a copy, and all those artists are out there gigging, they’re all on social networks, they’re all doing stuff to clutter the marketplace.” 

What is one supposed to gather from this statement? That there’s “too much” product available, producing an unacceptable (to label heads) amount of noise? That there are 35,000 artists out there so unlikable not even their family will spring for a copy? That maybe, just maybe, these 35,000 aren’t really doing any of those things listed, but instead have shoved a slice of recorded music somewhere towards the back of iTunes or the like? 

As for the amount of “noise,” brought on by “too much” product? That’s just a label problem. Anything that isn’t earning them money is just so much noise, pulling people away from their superior craftmanship and amazingly talented roster of artists. 

I would think this is the kind of “noise” music fans have been waiting on for years. Now no one has to sit on the other end of a label-enforced bottleneck, waiting for them to drop new music into their local brick-and-mortar shops or allow it to hit the airwaves of their favorite radio station. 

At this point in time, the cost of entry for artists and fans has never been lower. Bad news for major labels. Great news for artists and fans. Somehow Tom and many others still believe that if it weren’t for them and their Herculean efforts to keep bailing water out of their sinking ships, music fans everywhere would be left with nothing but a vacuum, completely devoid of music. 

I guess we didn't all buy her albums. It just felt that way...

And what do they have to offer? Let’s take a look, as Tom bemoans the fact that this collection of masterpieces was somehow unable to bump CD sales: 

“In America, Michael Jackson died, we re-released all of the Beatles stuff, and we had Susan Boyle, the Black Eyed Peas and Lady Gaga — and we were still down 12.7 percent and 16-something percent physical.” 

Holy shit! Two-shit-demos-tacked-on reissues! And not just any shit re-issues, but re-issues of albums everybody already owns! Tremendous! 

OMG! Susan Boyle! BEP!! LADY MOTHERFUCKIN GAGA!!!!!!!!!!!!!!! 

Christ on a bicycle! How did we poor internet morons get so lucky? How could we restrain ourselves from rushing to the store to pick up physical copies of CDs by dead artists with re-issue after re-issue under their corpses already, a reality-show contestant and two over-exposed pop stars? How were we able to resist the lure of this cornucopia of audio delights? How. The. Fuck… 

Good lord. If this is what the majors think should be moving units, they’re more fucked than they could ever imagine. Long tail or no, not every person out there wants the same old shit, endlessly repackaged and cynically hawked. If I want the fucking BEP, I can watch Target’s in-store advertising for 10 minutes or so. If I wanted a Michael Jackson re-issue, I only had to pick one up during the last quarter century. 

So it all comes down to this: Tom and the major labels want music fixed. They don’t want things to necessarily work better for consumers or their roster. They just want what they had before: skyrocketing profits and insane margins. 

You’ll notice that the independents artists aren’t clamoring for some makeover of the distribution system. Many like it the way it is. Some would like a few changes. A few anomalies hum along with the majors. 

I don’t hear anything from the fans. They’ve never had it better. 

If Tom really wants to be bold, he should grandfather his roster in under this new plan and issue back pay. That might help some of the endlessly screwed unrecouped see some daylight. He can stop charging bands for paid-in-full-and-amortized-to-hell-and-back studios. He can stop pushing them into incredibly expensive promos. 

Most importantly, he (and the rest of the labels) can stop trying to push back the clock, via lawsuits, threats and angry, ill-informed statements. They couldn’t stop what was coming and they didn’t even try to make it work for them. They just let file-sharing, etc. erode their business while they wrung their hands and paid massive retainers to lawyers. 

Without a doubt, this is a step in the right direction. But why now? Why not 20, 30, 40 years ago? Are they finally desperate enough to take 50% of something rather than 90-95% of nothing? I think they are. 

I’m sure there are some people who’ll say, “CLT, why don’t you cut him some slack? He’s trying to change things!” 

Don’t bother. There are a lot of people out there who will never earn the right to some slack-cutting (patent lawyers, divorce lawyers, lawyers, the RIAA, ASCAP & etc., career politicians of all stripes…) and “Major Label Executive” is right near the top of that list. 

You never gave anyone on your roster a break. You never cut them a little slack on the endless recoup. You never failed to let them know where they stood when times were tight. You insulted, berated and sued music fans. You bullied retailers and radio stations. You spent as much time as possible being part of the problem. 

Don’t expect me to humour you with your 50%-assed solution. 

-CLT