Chalk One Up For The Armchair Economists

from the getting-it-right dept

Mike Arrington, over at TechCrunch, has written up a post about "The Inevitable March of Recorded Music Towards Free" which will sound mighty familiar if you're a Techdirt reader. It's pretty much the same thing I've been saying for almost a dozen years at this point, pointing out the economics and inevitable trends facing the music industry -- and also noting why that isn't necessarily a bad thing. While he's dealing with emotional responses in the comments (again, that'll sound familiar...), it's more interesting to watch an "industry analyst" trash Arrington as an "armchair economist" without backing it up... and then getting his own economics totally screwed up. In this case, we need to chalk one up for the "armchair economists."

The analyst, David Card of Jupiter Research (the same analyst who incorrectly said that Radiohead's new offering would only work because the band was well known), dismisses Arrington's economics as "oversimplified analysis," but doesn't explain why it's actually wrong -- and that's because it's not. Card goes on to say that based on Arrington's analysis "software, filmed entertainment, soda at McDonalds, and the classic example, high-end perfume, should all be free," using that statement as a reason to dismiss the economics. But it's actually Card who's way off on the economics here. Like many of the folks who respond emotionally, Card seems to be confusing what he thinks Arrington is saying with what Arrington is actually saying. Specifically, he's confused "should" and "will." Neither Arrington nor I have been saying that music should be free -- but that it will be free based on the economics at play. People who read the "will" as "should" then get bogged down in moral arguments over "should" or "should not" that don't matter. You can say that companies "shouldn't" pollute, but it doesn't change the fact that they "will" pollute. At that point, whining that they shouldn't is meaningless -- you simply have to figure out how to deal with the reality that they will. If you can then take that reality and figure out ways for musicians to make even more money (as the economic research and history suggests is likely) than the whole moral issue goes away.

It's not worth going through each of Card's "examples," but if you look at the economic trends in play for each situation, you can see that Arrington is a lot closer to the mark than Card is. For software and filmed entertainment, the inevitable shift is to a service model rather than a product model (which is the same as music). A services model recognizes that the creation (not the distribution) of content is where the marginal costs are. In reality, they've always been services models -- just disguised as product models. In other words, the trends in both cases support Arrington, not Card. As for soda at McDonald's and high-end perfume, neither is a zero marginal cost good -- and both have a number of different economic factors dealing with them. For example, soda at McDonald's is a complementary good that people drastically overpay for as a convenience. There's value in convenience -- and since customers in McDonald's are a "captive market" for soda, there isn't the competitive market to drive the price down. It's too bad that a supposed industry expert would accuse Arrington of getting his economics wrong, and then clearly show both that he didn't understand Arrington's statements -- nor does he understand the economics of other products and trends. It reflects a lot better on the "armchair" economists than the supposed expert.

Disclosure: some might say that my company, Techdirt, competes with Card's employer with our Techdirt Insight Community. Then again, others might say that this blog competes with TechCrunch. Neither is directly true, but I might as well disclose rather than have to deal with it in the comments.


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    Brian Walsh, Oct 5th, 2007 @ 12:59am

    A masterpiece

    Brilliant, Mike. Brilliant. I award you a box full of gold stars...

     

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    Anonymous Coward, Oct 5th, 2007 @ 1:36am

    "...the same thing I've been saying for almost a dozen years.."
    Does that mean you have foresight or just that you no better at predicting the future than any one else - if after another dozen years music is predominantly free will that mena you were right and everyone should have listened to you, or does it just mean that you were irrelevant ?

     

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      Mike (profile), Oct 5th, 2007 @ 2:05am

      Re:

      Does that mean you have foresight or just that you no better at predicting the future than any one else - if after another dozen years music is predominantly free will that mena you were right and everyone should have listened to you, or does it just mean that you were irrelevant ?

      Ha! Good point. :) Though, in my defense, I didn't say *when* music would reach that point. However, if you do follow the trends, I've been pretty dead on in where it was (and still is) going. It would have gotten there a lot faster if the recording industry execs had any ability to understand basic economics. When you add in recording industry short-sightedness, it pushes out the timeline.

       

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    Cameron, Oct 5th, 2007 @ 3:54am

    Not free yet?

    Music is already predominantly free for a large group of people (if not most) because of downloading and file sharing software. The recording industry just won't realize that freely distributed music is not something they can reverse or control at this point.

     

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    Paul Bainbridge, Oct 5th, 2007 @ 4:08am

    Value of free

    The BBC has an interesting news article today on the value of free at

    http://news.bbc.co.uk/1/hi/magazine/7024728.stm

     

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    Mike F.M, Oct 5th, 2007 @ 4:38am

    Trying to keep a grasp

    I have been following this for a while now - admittedly not as long as Mike - and it seems to me that the recording industry is trying to keep a desperate grasp on a situation to which they have very little to no control over.

    People WILL download music. Fact! The only thing they are doing by trying desperatly to grapple a hold of the situation and stopping people from doing this is showing how little they know.

    If they were to relax - and even promote this - it would give them a much better face to the public.

    To promote this sharing is the only way they will regain control of something they lost many years ago.

     

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      Danny, Oct 5th, 2007 @ 6:18am

      Re: Trying to keep a grasp

      Precisely. The reason I have no sympathy or pity for the recording industry is because they could have taken the lead in digital distribution and come out smelling like roses. But no some executive realized that he would only make millions a year instead of the hundreds of millions he is used to making and chose to "protect" his livelyhood.

       

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    Anonymous Coward, Oct 5th, 2007 @ 5:40am

    It's easy to talk about free, but if music really was free there clearly would be no music industry : even if you use music as promotional material to sell something else the promotion must make some identifiable ecconomic contribution to whatever is being sold otherwise it wouldn't be used.
    The hard part here is figuring out an actual strategy and no-one seems to have a real grip on that, for example the recent story of some band allowing fans to pay what they think the music is worth seems quite desperate - particularly in the US where our track record of responding to the charity style appeal is quite appauling (and music bands arn't even charities).
    I doubt it will be organisations like the RIAA that figures out the way forward, but it seems similarly unlikely that blogs such as techdirt will either, and untill someone somewhere comes up with something original everything else will continue in it's present vein.

     

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      Mike (profile), Oct 5th, 2007 @ 11:05am

      Re:

      It's easy to talk about free, but if music really was free there clearly would be no music industry

      That is simply, factually, empirically and historically incorrect.

      You are confused by thinking that because one input is free that there is no money to be made. In fact, history has shown the opposite. As you decrease the cost of one resource, it opens up many new opportunities to make money.

      Stop thinking of the music as "the product" and think of it as one component towards satisfying a buyer's desire.

      even if you use music as promotional material to sell something else the promotion must make some identifiable ecconomic contribution to whatever is being sold otherwise it wouldn't be used.

      But it does. It increases the value of all those other things that are sold. Even if it, by itself, is free, it increases the value of other things.

      The hard part here is figuring out an actual strategy and no-one seems to have a real grip on that,

      Why do you say no one has a firm grip on it? We've been pointing out artists who have a very firm grip on it for years.

      the recent story of some band allowing fans to pay what they think the music is worth seems quite desperate

      You seem to be ignoring two things. First, the band is getting a lot of money already from fans signing up for this. Second, the "pay what you want" part was only a very small piece of the overall strategy -- which included selling a collector's item discbox with lots of stuff that people would want.

       

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        Anonymous Coward, Oct 5th, 2007 @ 1:45pm

        Re: Re:

        I hesitate to send to a thread which is pretty much dead but you get it so wrong !.

        You split the first para' to ruin it's meaning so you can say its wrong !.

        You are confused by thinking that music used as promotion is a free product - the cost of the music needs to be accounted and measured against the benefit of the promotion, and if it's not cost effective it will be dumped (you also have to understand music is no longer the product - it's just promotion).

        To achieve your goal there is need for expertise on how to make music somewhat similar to what the current industry makes (and musicians want to make) but which can fairly reliably and effectively be used as promotion (or some other "free" use) - this does not yet exist.

        It's clear that no-one has a grip since all the bands who are trying new things are all trying different things and all having wildly different results. It's not clear that any success can be maintained and even those relatively successful can't yet threaten the old model. The old model is still the best so it's obivous why the industry is protecting it - they won't stop until someone gets a good grip on the new environment.

         

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          Mike (profile), Oct 5th, 2007 @ 1:55pm

          Re: Re: Re:

          You are confused by thinking that music used as promotion is a free product - the cost of the music needs to be accounted and measured against the benefit of the promotion, and if it's not cost effective it will be dumped (you also have to understand music is no longer the product - it's just promotion).

          No, we agree here. Obviously the cost of *creating* the music needs to be accounted for, but recognize that the ongoing cost of distributing that music is now free once created.

          To achieve your goal there is need for expertise on how to make music somewhat similar to what the current industry makes (and musicians want to make) but which can fairly reliably and effectively be used as promotion (or some other "free" use) - this does not yet exist.

          I'd argue not only does this exist, it has always existed. Most musicians don't start out signed to record labels, you know. They start out playing music (and sometimes recording music) for free, hoping to use it to promote themselves to get to the next level.

          What we're saying is that such a next level is more easily achievable if you don't go through the traditional routes.

          It's clear that no-one has a grip since all the bands who are trying new things are all trying different things and all having wildly different results.

          You are wrong to think that all bands need to employ the same business model. In fact, part of the point is that there are so many different available business models now (as opposed to before).

          The old model is still the best so it's obivous why the industry is protecting it - they won't stop until someone gets a good grip on the new environment.

          No, the old model is the *easiest* but not the best -- and it's been getting harder and harder for it to work. That's the point. As more bands figure out these new models, it gets harder and harder for the old model to keep working.

           

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    Graeme Thickins, Oct 5th, 2007 @ 6:19am

    Mike, great post -- you should do more like this! Did you see the latest jury verdict in favor of the music industry yesterday here in Minnesota? Shees.... Here's the story.

     

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    sam, Oct 5th, 2007 @ 7:46am

    hey mike...

    once again.. we come to the free .vs. paid. looks like we're not going to get away from this anytime soon.

    here's my take:

    an artist/owner has the right to make/create music, and to charge whatever he chooses.
    an artist/owner has the right to give it away for free if he chooses.
    an artist/owner has the right to use his content pretty much anyway he/she chooses.
    an artist/owner can tell me what i can/can't do with the content that i'm going to buy from him.
    an artist/owner has to disclose the rights/obligations upfront (prior to purchase) in really bold/clear language!!

    i don't have the right to take the content and do what i want with it, unless the owner has told me i can.
    i have the right to use the content i've purchased from the owner, provided i'm willing to abide by his conditions.
    i also have the right to not purchase the content from the artist/owner, if i don't want to abide by anything the artist/owner thinks i should...

    if you agree with the above, we're pretty close.

    having said that, i'm not going to get into the secondary arguments of whether it makes sense for the music industry to sue it's customers, etc... to be honest, if people are ripping you off, instead of actually buying your content, are they really your "paying customers"...

    you see mike (and others), while it's easy to say that you can create additional rev streams, and use music to promote it, i'm pretty sure it's not that easy, and in fact a musician shouldn't have to... (although he might starve as no one would buy his music..!!)

    futhermore, i'm not sure how i get your statement that the price of music will be free... if i decide to put a price of $x on my music, it's not free, unless you take it from me without paying. and in that case i guess it's the same as me taking your car and saying i got it for free...)

    if i'm an artist, and i price my content, it's not free. just like software that i've written isn't free, unless i choose to give it away.

    seems to me, that if you make this statement and you hold onto it, then you really have to ignore the fact that someone's rights/space has been violated. (see above rights statements)

    the fact is, tech, has made it easy to create identical duplicates of digital content, and put a good deal of content creators w/r digital items in a bind.

    this is also a secondary a key driver behind the SAAS businesses, if you keep the software/content/etc on your own server, then you have little to worry about when it comes to someone taking your app, and giving it to some p2p network..

    peace...

     

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      Mike (profile), Oct 5th, 2007 @ 11:11am

      Re:

      Sam,

      You seem quite confused about how the market works. The market sets the price, not the seller. Yes, you're right that the seller can set an initial price, but if the rest of the market is pricing something at zero, then you're not going to get away with charging more than zero -- unless you can significantly differentiate the product.

      That's what I mean when I say the market will set the price to zero.

      Also, you're wrong about the fact that the seller should be able to set the conditions of what someone can do after they've *bought* his or her product. That's not quite how a purchase works. What you really mean is that a seller should be able to put conditions on things when they *license* their product -- but people don't think of it as a license. And, again, if everyone else is doing quite well by not putting conditions on the license, then you're not going to get away with putting conditions on your license.

      That's all I'm saying. More and more musicians are going to figure out that they can make more money and do much better by not putting conditions on their content and not charging for it. Then those that insist on still doing so will make less and less money.

       

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      Zergy, Oct 5th, 2007 @ 8:33pm

      Re:

      Looks likes sam went moral on this Mike. You can't argue with "should" and "will". People "will" download things for free no matter how much "morals". The artist has the right and I agree with that, but most people don't care about that.

       

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    4-80-sicks, Oct 5th, 2007 @ 8:24am

    dystopian future

    Looking at where things are going...MTV doesn't play music, and physical media is outmoded. Labels are demanding that radio pay THEM, and radio has been getting ever more homogenous for years anyway.
    I imagine that the music industry will eventually come around to the idea of other avenues, but will consolidate efforts down to just a few national acts, throwing all weight behind those who can support reality shows, etc., like the Pussycat Dolls. All music that comes from mass media will be from sources like that, and there will be one or two superstars from each label who carry nearly the entire weight of their current catalogs. If you don't want one of the "big ten" acts, your music choices will be only independent acts, small local labels, underground venues, and things like that. It would be hoped that underground labels that provide interesting, diverse, varied music could rise up and become very popular in this world, but we're going on 120 years of recorded music and it hasn't happened yet.

    I don't think it will really play out this way. But looking at the current state of mass media music (and being a science fiction reader) it's fun to think about.

     

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    The Man, Oct 5th, 2007 @ 8:58am

    Makes sense....to a point

    My main problem with your music for free rant is not that music is going to end up free, it is that you constantly talk about how artists can make even more money. You have never explained how they are going to make more money. I am assuming that if you actually knew, you would be consulting for the record industry a not writing a blog. I obviously am not smart enought to figure it out either. Outside of live performance and trinkets like shirts and coffee mugs, how would they make money. There are very few bands that are recognizable by name. It takes quite a bit of money to promote a band enought to get their name out. I have had many bands through my club that are better than bands on the radio, but they have not yet been promoted. Word of mouth and a good following that would bring people in to my business will get them about $400 for 3 hours. In my opinion we will see fewer famos bands in the future. Many musicians will give up the low money bar gigs and get a real job, and some will just put mediocre produced music they made in their house for fun. Once people figure out that they will no longer even have a slim chance of making money in music by starting out as a garage band, their will be less and less music available. I do not see many band members scraping together a living by working every night for $100 a piece.

     

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      dorpass, Oct 5th, 2007 @ 10:43am

      Re: Makes sense....to a point

      To "The Man"

      How can artists make even more money through something other than music... Now that's an original question that probably hasn't been asked before and no artist even made a lot of money through something other than music. Oh wait, ever heard of KISS? As much money as they have made through selling music, they have made even more money through concerts and merchandising. Yes, playing live music is a way to make money even though it's not a very attractive option for those that lip synch.

      Your rant about few "recognizable" bands is silly. There are a lot of bands you haven't heard on your cookie cutter radio, but they still have a loyal regional following. If you don't know what I am talking about, you might want to expand your listening tastes beyond Clear Channel owned radio stations.

       

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      Mike (profile), Oct 5th, 2007 @ 11:19am

      Re: Makes sense....to a point

      My main problem with your music for free rant is not that music is going to end up free, it is that you constantly talk about how artists can make even more money. You have never explained how they are going to make more money.

      Nope. I've never explained that at all. Other than the fact that I have.

      http://www.techdirt.com/articles/20070503/012939.shtml
      http://www.techdirt.com/articles/20 070118/013310.shtml
      http://www.techdirt.com/articles/20030912/1032238.shtml

      And there's a lot more from where that's coming from. If you want me to start citing the economic research (as I've done in the past), I can do that to. However, the simple fact is that in *every* industry, where the price of a specific resource drops, it tends to open up many more avenues to make money than in the past. This trend has been repeated over and over and over and over again. I've yet to find a significant counter example.

      I am assuming that if you actually knew, you would be consulting for the record industry a not writing a blog.

      You do realize this blog helps promote our corporate intelligence services, right? I wouldn't be so quick to assume that we don't have customers in the entertainment industry.

      Outside of live performance and trinkets like shirts and coffee mugs, how would they make money.

      Go read some of those other posts. There are lots of ways to make money. Live performances can be a big part of that, but they don't need to be.

      There are very few bands that are recognizable by name. It takes quite a bit of money to promote a band enought to get their name out.

      Yes, yes it does. But you know what's cheap? Giving away your music for free as a promotion. Go read the last link above about how you can use free music (especially as a no name) to start building up a following, and then leverage that to become much bigger.

      Word of mouth and a good following that would bring people in to my business will get them about $400 for 3 hours. In my opinion we will see fewer famos bands in the future.

      Sure, initially. But that's only the start, and it's no different than things are today. If bands start to learn how to use the tools available to keep promoting themselves, they can start to build up an even bigger following (assuming they're any good).

      In my opinion we will see fewer famos bands in the future. Many musicians will give up the low money bar gigs and get a real job, and some will just put mediocre produced music they made in their house for fun.

      Actually, we're seeing the exact opposite is starting to happen. More musicians than ever are making a living from their music, because they no longer have to get official record company approval to get a big enough following to make a living.

      Once people figure out that they will no longer even have a slim chance of making money in music by starting out as a garage band, their will be less and less music available.

      Again, the opposite is happening. More bands are making more music because it's easier than ever for a band to build up an initial following than ever before.

       

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    My 2 cents, Oct 5th, 2007 @ 9:13am

    Should vs. will

    I also agree with Mike both on mathematical grounds and my own experience.

    Mathematically there is something called information asymmetry (see http://en.wikipedia.org/wiki/The_Market_for_Lemons) which, although not directly applicable here, is similar in that it shows that the price of something tends to decline in certain markets, and is not related to the value but rather to the perception of the product. An economist might not agree with me, but to me it seems analogous.

    From my own personal experience in the past month I have received many, many "free" services and items. Everything from retirement planning, contractor estimates, product samples, mortgage refinancing, free meals, etc. and I have no doubt that someone, somewhere put the money up front to pay for each of those things, and that I an many others have contributed in subtle ways to creating revenue streams that make it back to those folks who are footing the bills. I don't feel taken advantage of, I doubt the other folks giving out those services and products feel that way (since they keep doing it) and the world continues to spin along.

    I whole heartedly agree with the importance of separating will and should. In the real world those are entirely different things.

    By the way, you don't seriously think the only way a Bank makes its money off loans to you is the interest rate spread between deposits and the loan interest rate? There is a whole lot more to it than that. (just another example from a different industry).

     

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    Anonymous Coward, Oct 5th, 2007 @ 9:18am

    Your analysis is terrible if you are going to complain about schematics then you really have no argument. Make a real rebutal.

     

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      Loose Bree, Oct 5th, 2007 @ 9:33am

      Re:

      Punctuation and grammar are your friends.

       

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      My 2 cents, Oct 5th, 2007 @ 9:36am

      Re:

      Anonymous Coward, which analysis is terrible? Were you typing while I was posting mine, and really meant someone else's analysis higher in the thread? Also did you mean schematics or semantics? I just got lost and thought maybe others might be confused also.

       

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        Anonymous Coward, Oct 5th, 2007 @ 11:53am

        Re: Re:

        To "My 2 cents," I was writing about Mike's analysis. Semantics...he was looking at form over meaning. I was not really talking about circuit design. And to Loose Bree, thank you for proving my point exactly.

         

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    deadzone (profile), Oct 5th, 2007 @ 9:38am

    But

    Quoting Sam from above:

    "an artist/owner has the right to make/create music, and to charge whatever he chooses.
    an artist/owner has the right to give it away for free if he chooses.
    an artist/owner has the right to use his content pretty much anyway he/she chooses.
    an artist/owner can tell me what i can/can't do with the content that i'm going to buy from him.
    an artist/owner has to disclose the rights/obligations upfront (prior to purchase) in really bold/clear language!!"

    I am pretty sure no one will disagree with the assertions you make here because it seems like a reasonable thing to expect for the work an artist does when he creates.

    Here's the disconnect in my mind though. I don't think that most of the artists/distributors/backers etc.. have understood or even acknowledged the fact that it's a different world now. It's not like it used to be in which there was a focus on physical media. The focus is moving away from physical media formats and it will continue. There is no going back.

    Given that, a new game plan and a new business model is needed in order for them to survive. With the new digital media age comes new problems, issues, and ideas that all need to be worked out between those who want to sell the media and those that want to consume the media. Right now, the emphasis still seems to be focused on media cost and how to make the most profit possible from the sale of media. My contention is that this is the wrong way to go about it. Emphasis should be placed less on price of the media itself and more on the value of it through promotions, advertising, etc...

    There really is a middle ground somewhere that I think both sides could agree to. We just need to somehow find a way to let go of some fears and take the plunge.

    The cat is out of the bag now, there is no way it's gonna be put back in the bag, so it's time to move on and accept it. This seems to be the biggest hurdle that the RIAA/MPAA and others seem to have. Ironically, so called "piracy" will continue to happen, no matter what. It is a simple and undeniable truth.

    Anyway, rambling nonsense poster guy, signing out...

    Good Luck

     

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    Schooley, Oct 5th, 2007 @ 10:41am

    I don't think that most of the artists/distributors/backers etc.. have understood or even acknowledged the fact that it's a different world now. It's not like it used to be in which there was a focus on physical media. The focus is moving away from physical media formats and it will continue. There is no going back.

    Oh, we understand. It's just that there's no way for the average artist to take advantage of this "different world." I've got free mp3's on my webpage (check 'em out! Please!) which means more people can now hear my stuff, as I never would have gotten played on the radio. BUT - I can't afford to tour enough to reach those people, or to make up for the lost cd sales by selling t-shirts and whatnot. Gas costs 3 times what it did a few years ago, but you are still lucky to get a hundred bucks for a gig on a weekday evening somewhere in middle America. With 4 hour drives on either side of that gig. Most bands I know make very little money touring.

    At least have a label that presses up 180-gram vinyl to sell to the record nerds (a loyal, though small, group). I'll keep working my crappy day job and saving my vacation days to tour Europe, where at least I get paid decently and treated better than at clubs in the US...

    In my opinion we will see fewer famos bands in the future. Many musicians will give up the low money bar gigs and get a real job, and some will just put mediocre produced music they made in their house for fun. Once people figure out that they will no longer even have a slim chance of making money in music by starting out as a garage band, their will be less and less music available. I do not see many band members scraping together a living by working every night for $100 a piece.

    More like $100 bucks for the whole band! But yeah, that's about the size of it...used to be Basie, Ellington, etc. could afford to keep a huge band on the road, get a decent hotel and pay for dry cleaning for the suits (well-dressed cats, those guys). Then it went to small combos, then 5 piece rock bands...now I play everything myself, sleep on people's floors, and it's still hard to make a go of it.

    I'll still keep playing music, though. Maybe this will just weed out the poseurs.

     

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      Mike (profile), Oct 5th, 2007 @ 11:24am

      Re:

      Oh, we understand. It's just that there's no way for the average artist to take advantage of this "different world."

      Huh? There are MANY, MANY ways for the average artist to take advantage of this different world. In fact, many are. Just because YOU haven't figured it out, don't assume that it's not possible.

      BUT - I can't afford to tour enough to reach those people, or to make up for the lost cd sales by selling t-shirts and whatnot

      Then you're not doing a very good job marketing things. Plenty of artists are figuring this out. There are some who ask fans in a certain area to pony up in order to get them to go there. Also, you're selling yourself short by claiming you can't sell CDs. Look at what some artists are doing to encourage more CD sales. The thing you can't do is assume that you just make music and then sit back and wait for the money to come. You need to be out there providing value and giving people a *REASON* to give you money.

       

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    Chris Brand, Oct 5th, 2007 @ 10:51am

    sam said "an artist/owner can tell me what i can/can't do with the content that i'm going to buy from him."

    Why do you think that ?

    If I buy a copy of a piece of content from somebody, it's mine. Because I'm not the copyright holder, there are some things that I could otherwise do with my property that I'm not allowed to do without permission, but this is an explicit list (with some exceptions even then). Everything not on that list is my right as the (physical) property owner.

    So I'm free to destroy it, enjoy it when, where and how I please (in private), change it (subject to moral rights in some countries), tell people my opinion of it, etc, etc.

    Every right not explicitly granted to the copyright holder is mine as the tangible property owner.

    I don't know why people think that "IP" rights should negate tangible property rights.

    Of course in some cases you license, rather than buy, a copy of a work, and that's different.

     

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    BullShifter, Oct 5th, 2007 @ 11:10am

    More of the same

    Mike, I see you still haven't given up on the "something for nothing" welfare state mentality. Obviously the court system and the rest of capitalist America don't agree. Free music "won't" be free because the act of downloading from share sites "is" piracy, it "is" the act of illegally obtaining an intangible asset, which, therefore, "is" illegal. I think your emotional attachments to this issue cloud your thinking and you should, thusly, re-examine your position.

     

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      Mike (profile), Oct 5th, 2007 @ 11:36am

      Re: More of the same

      Mike, I see you still haven't given up on the "something for nothing" welfare state mentality. Obviously the court system and the rest of capitalist America don't agree. Free music "won't" be free because the act of downloading from share sites "is" piracy, it "is" the act of illegally obtaining an intangible asset, which, therefore, "is" illegal. I think your emotional attachments to this issue cloud your thinking and you should, thusly, re-examine your position.

      Hi BS. You seem to be missing the point (again). I'm not saying that piracy is okay. Not at all. I'm saying that more and more musicians will figure out they can make more money by giving their content away. That is capitalism at work -- and given the trends in the industry, I'd say that capitalist America absolutely agrees.

      So, I think, perhaps, given that my position keeps getting vindicated each time yet another band figures out how to build a successful business out of giving music away for free, that perhaps it's you who should re-examine your position. As a start, you might consider reading what I've actually said, rather than what you think I've said. Might help.

       

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    Schooley, Oct 5th, 2007 @ 1:05pm

    Then you're not doing a very good job marketing things.

    Yeah, probably so. I'm a musician and not a bid'ness man.

    The thing you can't do is assume that you just make music and then sit back and wait for the money to come.

    Uh, yeah. I've been playing about a decade and it hasn't happened yet.

    Don't misunderstand, I'm not a troll. I totally agree with you Mike that the current model is dying/dead and some other model is going to take over the music business. Sometime in the future. For right now, nobody knows what the hell is going to happen or what the new model will be, and most musicians haven't a clue how to make things work in the present environment.

    So it's a bit annoying to see posts like the one by dorpuss above, on the one hand saying KISS, for chrissakes, is the model to emulate, and on the other admonishing that the previous poster should expand his taste beyond Clear Channel! Whaa?? KISS is about the pinnicle of a business first, music second, whoreporate mentality model and I hope to god that isn't the future as that's as bad as what we have now. (Plus, the example of KISS is rather unapplicable to most smaller current artists, as they rose to fame in the 70's thanks in good part to massive radio airplay and major label promotion. Yeah, they sold lots of KISS-merch, but that's like saying to a guy opening a taco stand "You should just do like McDonalds!")

    I'm just sayin' is all, for a post talking about "armchair economists" I get tired of all the armchair musicians posting like they're seasoned road warriors and have it all figured out. My comments aren't directed at you but more at the "armchair musicians" on here.

    My main point, again, is that gas costs have skyrocketed while bands are still getting paid the same amount for a show, and that most musicians I know don't make any money touring (Yeah, yeah, I know - boo hoo!), so people should just think about that for a minute before being so sure they have this new music business model completely figured out and getting on bands/artists cases for not being KISS...

     

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      Mike (profile), Oct 5th, 2007 @ 1:12pm

      Re:

      Yeah, probably so. I'm a musician and not a bid'ness man.

      And a pretty good one too. I checked out your site. I was recently marveling musician I know (as an acquaintance, not well) who has been doing some "one man band" stuff (despite a modest success as part of a larger band) and it's pretty impressive in the first place -- and to do it well...

      Anyway, I actually think your point above is what the record labels should be focusing on. You're a musician, not a marketer -- and record labels are the opposite. If they just learned to embrace the tools and the trends that are out there, the end result could be something special...

      Sometime in the future. For right now, nobody knows what the hell is going to happen or what the new model will be, and most musicians haven't a clue how to make things work in the present environment.

      The thing is, I don't think it really needs to be in the future. I think there's a lot of noise out there, but some are figuring it out and doing a pretty good job of it.

      My main point, again, is that gas costs have skyrocketed while bands are still getting paid the same amount for a show, and that most musicians I know don't make any money touring (Yeah, yeah, I know - boo hoo!), so people should just think about that for a minute before being so sure they have this new music business model completely figured out and getting on bands/artists cases for not being KISS...

      Gotcha. And on my side, I should be clear that I never meant to imply that it's "easy" to make money. But, then again, it's never been easy to make money as a musician -- but there certainly are more opportunities to do so today than in the past. While gas prices are a good point, it seems like there are many other avenues for making money beyond touring...

       

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    Billy K, Oct 5th, 2007 @ 2:26pm

    TechCrunch Mike

    When I read this earlier today I had to do a double-take to see if it was the same Mike from TechDirt.

    I think TechCrunch Mike has been reading TechDirt Mike. I'm just sayin'...

     

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    Danny, Oct 5th, 2007 @ 2:49pm

    I wonder...

    why is it that someone mentions the idea of charging little or nothing for music people go on about how the musician will be left out in the cold when in fact musicians hardly make anything off of an album. While I'm sure it varies by artist, label, and who knows what else it's safe to assume that muscians are not paid exccedingly well from album sales.

    If the music distribution model is drasically changed to point where music is sold for little if sold at all the musicians will not be ones left out in the cold, the record excutives that would no longer have a choke hold on distribution would be left out in the cold.

     

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    Anthony Kuhn, Oct 5th, 2007 @ 3:25pm

    Music industry continues to play ostrich

    Michael Arrington is right on. David Card is off his rocker. Instead of suing one's customers to profitability, how about selling a product in a means that creates demand, instead of killing it? Silly music industry executives and their lapdog legal stupidities via RIAA.

     

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    Calvin Smith (profile), Oct 5th, 2007 @ 7:25pm

    making money from music

    I live in the UK and recently went to see 'Tegan and Sara', a Canadian duo, in Leeds. I looked in the local record shops prior to the concert and couldn't find a single one of their CD's on sale. The concert was a sellout, as were most of the other venues on the tour, yet the artists mentioned that their record company had put nothing into promoting the tour. All the fans were there because they'd found the music on the web and bought tickets the same way.
    Some of the discussion here seems to revolve around covering the cost of making the original recording if the digitized form is 'free'.
    Why not view concerts as a sponsored recording sessions ?
    Which will be the first venue to automatically record and digitize ALL artists that perform there and then use those recordings to promote both themselves and the artists, maybe both sound and vison.
    Until I retired a few years ago I would take short trips to the US to go to a particular concert because some of the artists I really enjoy don't tour Europe often enough.
    So if I'm prepared to pay a few hundred dollars to get to a concert how much do you think I'd pay for a live webcast of a concert ?

     

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    Zergy, Oct 5th, 2007 @ 8:53pm

    Mike

    I certainly enjoyed this thread. Mike you rock. You are very polite when people are obviously upset with you. I may not agree with you on everything, but you have my respect. To deal with the responses you get everyday. I think I would have told them all to go to hell along time ago. Thats why I don't own a popular site. Thanks again.

     

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    Andrew D. Todd, Oct 7th, 2007 @ 8:59am

    RIAA As Cargo Cult

    What impresses me overwhelmingly about the whole discussion is the incredibly "needy" tone of the remarks of the musicians who think they are being deprived of a livelihood by music copying. I mean "needy" in the sense of a drug addict in withdrawal symptoms (I was reading Stern a while back to improve my German, and I discovered, to my surprise, that the German term for addiction translates as "poverty"). These people are not Britney Spears-- they have no reasonable expectation of making money from music royalties, any more than they have a reasonable expectation of winning the hundred million dollar jackpot in the state lottery. They get upset because someone is telling them the truth about themselves. Karl Marx said that "Religion is the Opiate [narcotic] of the Masses." I wouldn't know about that, but fantasizing about being a rock star is very definitely the opiate of a certain type of burger flipper. These burger flippers don't really want to be musicians, at least not enough to work very long and hard at it. They want to be rich, and their symbol of richness is the rock star. It's a kind of religion, what the anthropologists call a "cargo cult." The RIAA is not really in the music business, so much as it is in the "Opiate of the Masses" business. Its basic function is to make sure that burger flippers remain burger flippers, and remain poor, by telling them that they don't have to finish school, or to learn substantial jobs skills. The recording industry creates someone like Britney Spears, in about the same sense as dressing up a Barbie Doll, and effectively pays her to be conspicuously rich and to act out like a spoiled child in public. A certain kind of nut cult leader sometimes miscalculates and gets ritually eaten by his "devotees." That is roughly what is happening to the recording industry with P2P. Don't you think they deserve it?

    People talk about the supposed lack of incentive to create things. Creating things is fun. If you don't find it fun, you're never going to be any good at it. People write books all the time for fun, always have. There are maybe a couple of hundred writers who make a living at writing books. The rest, the authors of nearly all the books published, are writing because they want to. It used to be that if you wanted to have your book published, you often had to pay to have it published, and getting a book published was not by any means the same thing as getting it into the bookstores. Nowadays, you can just stick the book up on the website, which costs very little. And that is of course what people do.

     

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