Mixtape Conundrum Exposes How The RIAA Is Protecting Bad Business Decisions, Not Artists

from the figuring-this-one-out dept

Following yesterday's story about the RIAA using a local SWAT team to shut down and arrest a well known DJ for his mixtapes, it seems that it's kicked off an interesting debate in the major media. As many people have been pointing out for years, there are ways to embrace unauthorized copying, by recognizing that the content has promotional value. That's not surprising to many folks around here, of course, but you almost never hear that admitted by the media, who seem to have bought the RIAA's line that any unauthorized copies are "piracy" or "theft" (when, in truth, it's neither). However, following that arrest, we're starting to see stories pointing out how these mixtapes have played a huge role in promoting various hiphop stars, and many of those whose content is used this way are absolutely thrilled about it. The only ones who aren't happy about it, apparently, are the RIAA, whose quote for the article was: "A sound recording is either copyrighted or it's not," which actually totally misses the point. First of all, a sound recording is automatically copyrighted, so he's not even correct in what he's saying. However, the real point is that whether or not it's copyrighted doesn't matter here. The discussion is about whether or not the use of mixtapes is actually helping or harming the music business.

What this is really about is the fact that the record labels that make up the RIAA wrote bad contracts. They wrote contracts based only on making money on selling CDs, not on selling music or the musical experience. Yet, the musicians themselves have recognized that there are plenty of ways to make money if your music is popular enough -- so they're thrilled to get any publicity that they can then turn into money (without most of it going to the RIAA). That is, via concerts, merchandise, sponsorships and plenty of other opportunities, and since none of that money is shared with the record labels, the musicians make out great. The real issue isn't about "protecting the artist" or "protecting the music," it's about the RIAA's bad business decision making. Of course, when other businesses make bad business decisions, they don't get to use the SWAT team to help them remedy the situation.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
    identicon
    Anonymous Jabroni, Jan 19th, 2007 @ 5:16pm

    I honestly hate the RIAA with all my might. If i could pick one thing to devote my life to destroying it is the RIAA, fuck racism and crime...im going after the RIAA

     

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  2.  
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    misanthropic humanist, Jan 19th, 2007 @ 5:46pm

    a silver lining

    This is a good thing in disguise. Sorry for another complicated analysis, but I think this possibly has some merit. When you sit back, take a long hard objective look at it and consider the entire debacle from the viewpoint of each player, the record company, the artist, the DJ, the audience and the RIAA, it makes perfect sense.

    Everyone else in the equation is operating according to classic capitalist economic principles as a Baysian utility maximiser (looking out for number one), except for one party who is creating the whole mess, and it isn't the RIAA.

    The audience have their need for search, added value through selection and aggregation. They're prepared to pay a modest sum for music they like. The DJ has his service of selection and promotion from which he obtains the reward of notoriety/reputation and a platform from which to perform and earn a modest fee. The RIAA have their protection racket and operate in classic criminal style demanding money by menace on behest of the record companies they represent. Economically the odd man out is the record company, who has been replaced by the DJ, or at least competes with him. The record companies still try to operate in the field signing artists and taking a cut for promotion and distribution. But both of those services are available for better value elsewhere (through the DJ/mixtape network, netlables etc)

    So if you're looking for someone to blame then oddly it's the artist. It's the artist who made the bad choice. In 2007, signing a deal with a record company is simply the worst thing an artist can do. There is no advantage, no gain or value to obtained by using a "recording company". They are obsolete relics of a bygone era.

    Everyone else in the equation is prepared to work for a much smaller cut. It is the greed, or naivity of the artist who signs a record deal expecting big returns that ultimately underpins the entire feculent pile of poo. But the poor artist is lied to. They don't realise that the record companies are paid huge subsidies to *not* promote them, but to moderate/control them. By doing so they maintain artificial scarcity and a narrowly focused market under their control.

    So, it's not that the RIAA wrote bad contracts. The RIAA don't write contracts, they protect the interests of people who do. The artists signed bad contracts. They cut their own throats in terms of promotion selling a realistic modest return down the river for the empty promise of a fortune.

    Since the DJs have the greatest power, as brokers between the audience and the artists, the best outcome is that DJs become scared of using RIAA protected material. If they realise that they should only mix artists on Creative Commons licences that will close the final pipe that supplies oxygen to the system.

     

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  3.  
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    Jon, Jan 19th, 2007 @ 7:09pm

    I don't really have anything to say that could remotely follow up your post misanthropic humanist, so I will stick with AJ and say... I hate the RIAA, and the MPAA, and politicians, and lawyers, and poker chips. I hate it when my interweb tubes get clogged.

     

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  4.  
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    Jon, Jan 19th, 2007 @ 7:10pm

    Re:

    I apologize for that comment. I was just reading some digg comments.

     

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  5.  
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    Dosquatch, Jan 19th, 2007 @ 7:42pm

    Re: Jon

    Hey! Leave my poker chips out of this! The rest of your list is fair game.

     

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  6.  
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    Tatiana, Jan 19th, 2007 @ 7:59pm

    Dumbest mistake EVER

    Most CREDIBLE hip-hop artists' careers begin and end with the mixtape. Point blank. I'm guessing some of these comments are from people who aren't TRUE hip-hop fans, cuz they don't see the bottom line even when it's right in front of us.

    Without the mixtape (which has been around since the 80s), there are artists whom we would have never heard of. Soem of the most memorable/important verses in hip-hop were spit on mixtapes and not on actual artists' albums (Ether and The Takeover spring to mind).

    Mixtapes are the only medium where hip-hop artists can be real. They don't have to format a mixtape to sell to a broad audience (i.e. white kids who are looking for pop more than true hip-hop). The mixtape is for the streets and is the only thing lately that THE STREETS aren't complaining about. Albums are watered down to the point where no one is buying them. But mistape sales are at an all-time high.

     

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  7.  
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    Relentless, Jan 19th, 2007 @ 8:12pm

    DOH!!

    Dont we (at least here in Canada) pay a levy on blank CDs DVDs and Tapes? I think the issue is someone else earning money from the performance of this music.
    Either way, some smart creative genius is going to come up with an effective, reliable distribution and marketing model for world class artists via the Internet and the recording labels are going to go the way of the do do bird.

     

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  8.  
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    Relentless, Jan 19th, 2007 @ 8:12pm

    DOH!!

    Dont we (at least here in Canada) pay a levy on blank CDs DVDs and Tapes? I think the issue is someone else earning money from the performance of this music.
    Either way, some smart creative genius is going to come up with an effective, reliable distribution and marketing model for world class artists via the Internet and the recording labels are going to go the way of the do do bird.

     

    reply to this | link to this | view in thread ]

  9.  
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    Hans gruber, Jan 19th, 2007 @ 8:20pm

    Beat me to the punch

    Damn, Misanthrope, good post. You're proof that there are good, insightful comments out there.

    I agree with you completely. I'm a (very amateur) musician myself, and record songs on my computer with very inexpensive hardware and software. I occasionally submit songs to songfight.org which is a fun community of players that compete with songs based on a different title each week. Submission range from drunken and rough-hewn to glossy and professional. It's always a hoot - but it's also made me realize just how outmoded the recording industry is. (To call it 'the recording industry' is kind of inaccurate - it's more like the 'hype industry').

    If a half-talented twit like myself can build websites and record my own music, what's stopping bands from doing the same? Why do they choose to sign away their profit and creative license?

    It's because of the glamor of the entertainment industry. They're in the very big business of packaging, marketing, creating an amazing illusion, which influences all aspects of our culture: economy, politics, and religion. For most people (myself included at one time) Music and Movies are the high Art forms of our age, and effect us on a personal level.

    Everyone wants to strike it rich on a beautiful vision and a guitar, gain artistic credibility, and be famous. You don't have to wear a suit (unless you're Robert Palmer) and the chicks are free.

     

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  10.  
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    ScytheNoire, Jan 19th, 2007 @ 8:21pm

    Artists don't make their money from the sales of CD's, they make it from their concerts and other products that they themselves own and control. Quote I heard a while ago:

    Bruce Springsteen made more from five concerts than he did from all his music sales going back to the first release (records, tapes and CD's put together).

    CD's fund the RIAA, stop buying CD's and starting buying directly from the artists themselves.

     

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  11.  
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    misanthropic humanist, Jan 20th, 2007 @ 10:15am

    Re:

    Tatiana: "Mixtapes are the only medium where hip-hop artists can be real.

    Precisely why the MAFIAA wish to stomp on them. By "real" you mean political/social speech. That is anathema to todays media companies.

    Hans gruber: "If a half-talented twit like myself can build websites and record my own music,.."

    Hans, imho you already display the qualities required for a modestly successful place in the new entertainments world. Good luck finding your path.

    ScytheNoire: "starting buying directly from the artists themselves."

    Mod parent up +5 insightful

     

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  12.  
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    teknosapien, Jan 20th, 2007 @ 11:07am

    This looks like a shot in the foot.

    This looks like a shot in the foot. Whats the next headline?
    "Radio Station Shut down for copyright infringement!" most bands get recognition from the fact that "some one heard them somewhere" this creates a an interest, thus generates the bands rise. I keep looking at the Grateful Dead who sanctioned recording and trading of music. I honestly believe this contributed to the bands commercial success. Of course they shunned the recording industry and started their own label.
    On another note:
    Does any one out there know of a list of that had current law suits and the artists that are represented? If not that should be a starting place. Boycott any one who is bringing these frivolous things to court. I think we have much better thigs to do with recourses we have at hand. to name a few homelessness hunger ... this list is endless

     

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  13.  
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    misanthropic humanist, Jan 20th, 2007 @ 3:03pm

    Re: This looks like a shot in the foot.

    Does any one out there know of a list of that had current law suits and the artists that are represented?


    www.boycottriaa.com

     

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  14.  
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    Tyshaun, Jan 20th, 2007 @ 3:51pm

    Re: a silver lining

    Misanthropic,

    I usually agree and look forward to your posts, but I have a problem with something you said:

    Since the DJs have the greatest power, as brokers between the audience and the artists, the best outcome is that DJs become scared of using RIAA protected material. If they realise that they should only mix artists on Creative Commons licences that will close the final pipe that supplies oxygen to the system.

    I think the statement is a bit naive in that it doesn't address the true state of the music industry. Most of the music outlets in the US are clearly under the control of RIAA companies, who definately represent the true brokers between artists and audience. Companies like Clearchannel control the radio stations, RIAA companies take up a huge section of the recorded media market, and 99.9% of the "undebateably" legal download sites are laiden with RIAA company stuff. I'm not saying it's right, but let's not delude ourselves into the notion that some guy selling mix tapes out the trunk of his car has anywhere near the influence of any of the big music companies.

    As I read the comments I keep reminding myself (and perhaps techDirt folks need to as well) that we are a self selected group that probably isn't representative of the larger public that still uses MTV and their local Clearchannel station as their primary means of selecting what music to listen to. Again, I'm not sying it's a good system, but it's naive to assume a bunch of multi-billion dollar companies will quietly die off or that they will not use every trick in the arsenal. We aren't seeing the end of the RIAA conglomerate monopoly, just the start of the fight and I'm not sure they've even started using the really big artillery yet.

     

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  15.  
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    random, Jan 20th, 2007 @ 6:01pm

    ummm yeah

    I LIKE SOUP

     

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  16.  
    identicon
    Jamaal Johnson, Jan 20th, 2007 @ 6:29pm

    Re: ScytheNoire

    Actually, once you get into business, you will find that marketing can be one of the most expensive aspects. Sales people get paid MUCH more than the grunts who actually do the work. Without the salespeople, though, the grunts would have no work.

    Artists may not make much money from CD sales, but the CD sales fund future albums, promotions, hype, tv advertising, radio advertising... The recording industry puts the CD's in thousands of stores. If the CD does not sell well, then they will not promote future CD's and the artist will virtually disappear. Generally speaking.


    "Artists don't make their money from the sales of CD's, they make it from their concerts and other products that they themselves own and control. Quote I heard a while ago:

    Bruce Springsteen made more from five concerts than he did from all his music sales going back to the first release (records, tapes and CD's put together).

    CD's fund the RIAA, stop buying CD's and starting buying directly from the artists themselves."

     

    reply to this | link to this | view in thread ]

  17.  
    identicon
    Jon, Jan 21st, 2007 @ 9:21am

    Re: a silver lining

    @Misanthropic, how many of these recording artists the RIAA is "protecting" signed contracts in the last year, much less the last 3-5 years? I would argue that the vast majority of music that the RIAA goes after people for are contracts that are at least 3 years old, if not 10 or 20 years old. So I think the whole "artists should have known better" argument holds water with only a very small portion of artists on major labels right at this point.

    I hope that in the coming years ahead the A&R rosters at major labels start to thin out, then become downright anemic as new talent realizes that a "major label" deal will probably not make them any money, and indeed, injure their fan base.

     

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  18.  
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    Anonymous Coward, Jan 21st, 2007 @ 12:22pm

    "Artists don't make their money from the sales of CD's, they make it from their concerts and other products that they themselves own and control."

    Another thing to note, artists that are signed with labels never lose money on CD's sales. The vast majority of CD's that are released lose money. The financial risk is taken by the record label not the artist.

    As was pointed out earlier, if an artist doesn't like the RIAA, then don't sign a record contract.

     

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  19.  
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    weebit, Jan 21st, 2007 @ 11:02pm

    riaa

    I had heard, but not sure of the truth to it, that the riaa can halt a radio station from even playing someone's music. If this is true along with everything else that the riaa has been doing, they sure sound like a monopoly to me. Why hasn't someone done some research into this and a possible law suit? They should not have that kind of control. I want to hear the music, and I don't want the riaa dictating what I can hear. Choice is good.

     

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  20.  
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    dataGuy, Jan 22nd, 2007 @ 5:57am

    "so they're thrilled to get any publicity that they can then turn into money (without most of it going to the RIAA). That is, via concerts, merchandise, sponsorships and plenty of other opportunities"

    One thing that is starting to annoy me is repeatedly listing merchandise sales as one of the areas that musicians can make money on. While it's true that do make some money off of merchandise sales at concerts, for the most part the merchandise contracts are just as slanted and unfair to the artist as the recording contracts.

    Acts that are small enough to handle the sales of merchandise themselves can make some money off the effort (assuming they actually have a following). Once they get enough traction that they have to outsource merchandise sales, then they usually get screwed.

    I agree that there are many ways to make money in the music business other than selling CDs. However, please keep in mind that merchandise sales are just as rigged "toward the house" as CD sales are.

     

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  21.  
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    John, Mar 31st, 2007 @ 11:38pm

    Re: Dumbest mistake EVER

    Tatiana. mixtapes are not at an all time high. That is because the RIAA has been getting stores shutdown and vendors locked up. People are shook to sell mixtapes. That is one reason why hiphop sales are horrible.

    And the RIAA is making their money. Cause they reporting back to their board of directors, with reports that they are doing something. That is how they get paid. And we have to remember, eventhough the board of directors are members of the record labels, these indivduals are very elite of them. They don't know shit, especially how their own label works and operates.
    But anyway, everyone should check out this website, I checked it out, very interesting. www.HipHopAgainstTheRIAA.com

     

    reply to this | link to this | view in thread ]


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