Having recently returned from Norway, where I was impressed at the optimism and the willingness to embrace new technologies and services, it's disappointing to read the following story (found via brokep) of a Norwegian band who recently released an album on their own label and decided to put it up on The Pirate Bay themselves, as more and more indie labels are doing. Except... the band members are a part of the Norwegian music collection society TONO, who is among those fighting to have The Pirate Bay blocked in Norway. Since the band has allowed TONO to enforce its copyrights in performance situations, TONO is claiming that it can forbid members from putting their music on sites like The Pirate Bay (translation from the original Norwegian):
The management contract in TONO means that we can not allow the TONO-members post things on your own at some commercial sites.
Once again, examples of these performance rights groups working against the wishes of artists, rather than helping them out.
Last week, I had the pleasure of attending the Nordic Music Week event held in Stavanger, Norway. It was a smaller event, mainly involving those involved in the music industry in the Nordic countries (Norway, Sweden, Finland, Denmark and Iceland), with a heavy emphasis on independent musicians, as there were no major label representatives there. As such, the event was quite different than most of the typical music industry events I go to. There was very little fretting and worrying about "piracy" and such, and most of the discussions were quite forward looking and forward thinking. In fact, I'd say much of the event was downright optimistic about where the music industry was heading. While there were many great discussions (and I liked the fact that much of the event was focused around open table discussions, rather than just presentations), one of the most interesting presentations was by Òlafur Arnalds, an Icelandic musician, who started his presentation off by saying he disagreed with me and my presentation (which had been an updated variation on my NARM presentation), and had adjusted his presentation to be a response of sorts to mine. Except it wasn't. His presentation was yet another great example of a musician who understood exactly what works in the industry, even as he thought he disagreed with me. We later chatted briefly about it, and realized we're actually very much in agreement about where we stand on the industry. The confusion came about because he is really focused on the music, and felt that my presentation focused too much on the money aspect.
And, indeed, my presentation did focus somewhat on how to make money, but that's because if I just focus on the music, people complain that no one will make money and then no one will make music. But, of course, that's ridiculous. None of these models work particularly well if you don't make great music. And Òlafur Arnalds makes great music -- and once we started talking, even he admitted that in order to do what he does, he needs (and wants) to make a living (which he does). And his actual presentation was about how to do just that. It was all about how he closely connected with his fans and gave them a reason to buy (even if he didn't like to think that way). Instead, he noted that he needed to come up with a good story to go with the music, that would help attract his fans, better connect them to him while also giving them a reason to support him monetarily.
So, with that idea (having a story behind the music) as his basis, he came up with a great project called 'Found Songs', where he would write, record and release a new song every single day for seven straight days. He did it all out of his bedroom. His fans then stepped up and created artwork for each song, and in some cases, amazing videos, such as this one below, which is truly beautiful, and within days had thousands upon thousands of views:
You can watch the videos, look at the artwork people created for the songs and even download all the songs for free as mp3s. But, there's also a store where you can buy the beautifully packaged vinyl or CD versions of the album, and some higher quality digital downloads. In other words, it was yet another perfect example of connecting with fans and giving them a reason to buy (and, yes, it involved great music as well -- which is, in fact, key). The importance of having a good story to go along with things, as we've seen with other projects, is a particularly good point. And, again, it shows how an infinite good (a good story) can increase the value of a scarce good (the products you're selling). He also showed how his own fanbase increased massively after doing this project -- much more so than when he was out opening for Sigur Rós. So, in the end, we absolutely agreed, and I found out about some more great music and yet another great story and example to go along with all the others.
Beyond that, I met a bunch of fascinating people doing very interesting and unique things in the music industry in the Nordic region. All of the Nordic countries are working hard to help enable their bands to adapt to a changing music environment, and there are definitely some very creative indie labels, artists and managers who are thinking through and implementing some great ideas that left me quite enthusiastic for what comes next. I also got a chance to meet Moto Boy, who took part in our CwF+RtB experiment, and see him perform live (which was fantastic). Overall, a very encouraging trip.
As you hopefully know, back in 1999, the RIAA had a Congressional staffer named Mitch Glazier slip four words into a totally unrelated bill on satellite retransmission of broadcast TV, literally in the middle of the night, that effectively changed the way copyrights worked on songs by major label artists. It effectively took much of the control out of the hands of the artists and handed it right to the labels. Remember that the next time the record labels claim they're representing the best interests of artists. The use of four simple words, buried deep within the bill, which no one other than the RIAA knew about (seriously, those who voted on it later said they had no idea), turned songs recorded by artists signed to record deals to works made for hire. That meant that those artists could not reclaim the copyrights to their songs later on via a "termination" right, as any other content creator could. Glazier, the staffer who slipped this into the bill, ended up going to work for the RIAA just three months after putting this text into the bill. He was apparently hired with a $500,000 salary. Not a bad payoff for changing a key component of copyright law in the middle of the night when no one's looking.
Luckily, soon after this passed a few people did notice, leading to a big uproar from artists, and an eventual backtracking from Congress, who never did believe the RIAA's line that this "change" just "clarified existing law" rather than changed it entirely.
But, it's important to remember all of this when discussing termination rights for music. Back in October, we had discussed how the songs of many top musicians were quickly approaching those termination rights, and some of the major record labels stood to lose the copyrights on some of their biggest hit albums. Wired recently ran a similar article about this "ticking time bomb," and I wasn't going to post it, because I wasn't sure it added much new, until reader Mesanna pointed out one little factoid down at the bottom:
The second option is to re-record sound recordings in order to create new sound recording copyrights, which would reset the countdown clock at 35 years for copyright grant termination. Eveline characterized the labels' conversations with creators going something like, "Okay, you have the old mono masters if you want -- but these digital remasters are ours."
Labels already file new copyrights for remasters. For example, Sony Music filed a new copyright for the remastered version of Ben Folds Five's Whatever and Ever Amen album, and when Omega Record Group remastered a 1991 Christmas recording, the basis of its new copyright claim was "New Matter: sound recording remixed and remastered to fully utilize the sonic potential of the compact disc medium."
Now, of course that sounds ridiculous, to hear that record labels can get a new copyright on just remastering a work... but, that sounds an awful lot like the argument made by Bluebeat.com, concerning its "psycho-acoustic simulation" re-recordings of famous songs, that enabled it to claim a new copyright. Now, the record labels are crying foul about this, and the vast majority of copyright law experts say that Bluebeat's claim has no chance at all. But, if that's the case, then the record labels own attempts to get new copyrights on remastered albums to avoid the termination rights might also be in jeopardy. It seems like any argument that is made against Bluebeat can soon be used against the labels as well if they really do try to claim copyright on remastered albums.
I believe that we were the first publication to report on the study released by PRS in the UK, way back in July, indicating that overall music revenue was up, even as the sale of recorded music was dropping. It showed how live revenue was making up a good part of the difference, and other aspects of the business were making up more than the rest. While we've pointed to that study numerous times in the meantime, we've been quite surprised that no mainstream press picked up on this seemingly remarkable news -- as it went against the prevailing favored narrative (as pushed by the RIAA) that the music industry was in trouble. Especially when combined with the recent Harvard study by Felix Oberholzer-Gee and Koleman Strumpf, that also showed that revenue in the overall music ecosystem was significantly higher today than in the past, it really was quite amazing that the press (and politicians) continued to spread the lie that the music industry was in some sort of trouble. It's not. It's only the business of selling plastic discs that's in trouble.
The good news is that the mainstream press seems to finally be waking up to this. As a bunch of you sent in, the Times Online in the UK has published a nice study highlighting the PRS numbers, complete with some very nice charts, showing that musicians themselves are making more than ever. The other interesting part: for all the talk about how recorded music sales losses are hurting artists, the chart proves the point we've made over and over again: musicians see such a tiny part of recorded music sales that this has had almost no impact on their revenue at all. The amount of money musicians make from recorded revenue has remained just about constant.
Source: Times Online Labs blog
It's great that the press is finally starting to dig into this -- and the Times Online even admits that perhaps it should not have let Lily Allen claim in its own pages how much "harm" was being done to artists due to file sharing, because the numbers simply don't support it (of course, we pointed this out when the whole Allen mess was going on...).
Now, some people have raised some concerns over the numbers -- specifically, there have been some claims that the "live" numbers are distorted due to so-called "heritage" acts and legacy acts, who have been around forever and still pack large stadiums with increasingly higher ticket prices. And, indeed, that almost certainly has some impact on the numbers. It would be nice to see a similar report that starts to break out some of the details -- and we've been talking to a few people who are trying to dig deeper into the amount of "live" and "alternative" revenue streams to better understand where the money is going. Hopefully we'll have more complete data soon, but the initial things I've seen suggest that the original point remains true. Artists across the entire spectrum of the industry are making more in live revenues than they have in the past -- and, in part, the increase in live revenue is due to file sharing. In talking to different musicians, we've been hearing plenty of stories about how they're strategically pushing free versions of their songs on local audiences before embarking on tours or even individual shows -- and they're seeing larger turnouts than in the past because of it.
Hopefully, with more mainstream publications finally picking up on this, both the press and politicians will begin to recognize that the only real "crisis" in the music industry is for those who have stupidly relied on selling plastic discs for way too long. There are plenty of revenue opportunities for musicians, and because of that (in combination with better and cheaper tools for music creation), the actual music industry is thriving at levels never seen before.
A couple people sent in this rather interesting story from the Times Online about how Mariah Carey is reinventing the music business model. Well, that's basically what the article suggests. What's more accurate is that she's more or less scaled up the "connecting with fans" and "reasons to buy" to mega-superstar levels. She's working closely with various brands to help fund the business model. She's selling other product lines such as makeup. But, she's also come up with some unique "reasons to buy." For example, she got the magazine Elle to produce an entire issue dedicated to her -- but the only way to get it is to buy her new CD. In other words, she's giving people a reason to buy the CD. And... even better, she (or, her people) sold the ads that are in the magazine and gets to keep all of that money. It's the superstar blend of recognizing that content and advertising have really become the same thing.
She's also connecting with fans more and more using the internet -- even with such a huge following. So, for example, her people are carefully "leaking" her schedule and appearances to very targeted groups of fans online, so when she shows up places, there's a good number of fans, who feel special, rather than tremendous mobs.
And, no, of course this isn't the model for everyone. None of these models are -- but they all follow the same framework. She's working hard to come up with reasons for people to buy stuff, all of which is made more valuable by her music and her celebrity. And she points out that the record label execs should have embraced the internet ages ago:
"A lot of big powerful music-industry executives made a giant mistake," she says. "They gave the music business away on the internet. If they had just sat back and said, 'Maybe let's figure this internet thing out, it could be something cool,' we could have found a way to distribute music online on our own terms, not somebody else's. Prince had already shown them the way. He was so far ahead of the curve, putting out his own records on the web. Everyone else was stupid."
Indeed. While Prince eventually stumbled, his early efforts were incredibly instructive for the industry, but every time folks like us mentioned them, we were told it could only work for Prince and that it was a terrible model. Except it worked -- and, to be honest, every model we see these days is really a more modern reflection of what Prince started doing years ago.
But, once again, despite the naysayers, we're seeing that this basic economic concept of using the infinite goods of music and celebrity to sell scarce goods can work no matter how big or small the artist may be.
In the recent debate in the UK about copyright extension for performances, one of the key points raised by many who were against the proposal was that economic studies suggested that it would really only help a few big superstars (who probably were well enough off already) while harming up-and-coming artists greatly. Christian Zimmerman points us to a recent economics paper by Francisco Alcala and Miguel Gonzalez-Maestre that models why this happens, and points out that copyright extension actually serves to decrease incentives for the creation of new content. The full paper (pdf) basically points out that extending copyright really only helps the superstar performers, since, for everyone else, the economic value of the content is exhausted by the time the extension would matter. That's pretty obvious. But the more troubling part is that this also then negatively impacts the market for new artists, because money and attention that might have gone towards new works end up going instead to those older works.
Increasing the returns in the case of success may be counter productive
for helping new artistic careers. Most artistic markets operate in the framework of an
overwhelming machinery of promotion and advertising. Incentives to invest in the promotion
of the superstars rise as the prospects of superstars' revenues improve (as caused
by modifications in the regulation of copyrights or the size of global markets). In this
environment, the expected discounted return of a young artist' career may be reduced as
a result of a positive shock to superstars' revenues. As a consequence, larger high-type
artists' revenues may result in the long run in fewer numbers of artists, and therefore, less
high-quality artistic creation.
Nice to see more economists recognizing the problems of the current copyright system.
This one's from a few months back, but still quite interesting. Danny submitted this story of a series of lawsuits between a musician and a town tourism board over a song the singer apparently wrote. The backstory is that the musician, Cheryl Janky, was a member of a doo wop band called Stormy Weather (perhaps that should have been a warning), who had, as a founder and singer, a guy named Henry Farag. Janky wrote a song called "Wonders of Indiana." With Farag's help, the song was modified to become "Lake County, Indiana," "a doo-wop ode to the border county that rhymes 'ethnic diversity' with 'Hoosier hospitality.'" Farag then did a deal with the tourism board of Lake County, who bought 1,500 copies of the band's CD to sell in its gift shop, and used the song as hold music for callers. The tourism board also had the band (with Janky in it) perform at the opening of of the tourism board's new center. That all happened in 1999.
In 2003, however, Janky left the band, and suddenly was pissed off about how "her" song was being used. She filed a lawsuit in 2003, and since then:
The case has spawned at least three lawsuits, thousands of dollars in judge-ordered sanctions against the woman's attorneys, a three-day trial, estimated legal fees of more than $500,000, reams of paperwork and a subpoena issued to a federal judge.
And for what? Farag notes that the band sold less than 2,000 CDs total (most of which seem to be from the tourism board's purchase). And yet, Janky continues to pursue the case, with her lawyer insisting she needs to do this to "stand up for her creative rights." Meanwhile, this is the same lawyer who apparently "has been sanctioned twice by separate judges in the case for filing frivolous claims and last month was ordered to put down a $5,000 deposit before filing more lawsuits on Janky's behalf 'to cover the high probability of additional sanctions.'"
Ah, the crazy things that a misunderstanding of copyright makes people do.
We've noted the ridiculous and self-defeating efforts by many music collections societies around the world to jack up their rates by ridiculous amounts. None was more ridiculous than the attempt in Australia by the PPCA where some of the rate changes would rocket up from figures like $125/year... to $19,344/year. Well, it looks like it's already backfiring badly. Reader Dan alerts us to the news that the organization that represents night clubs and similar businesses in Australia, appropriately named Clubs Australia, has set up a system whereby the organization will specifically go out and seek music by artists not covered by the collections effort, and distribute that music to clubs and other establishments. Then, these clubs, gyms, restaurants and the like can tell the PPCA to take a hike, and still play music. We'd already seen that some clubs had started doing this on their own, but now they've teamed up to share such music with each other in order to get out from under the PPCA entirely. So, nice job PPCA. Once again, in your effort to get people to pay more for every single use, you end up making it that much more difficult for anyone to actually hear -- or care about -- the musicians you supposedly represent.
Missed this one when it first came out, but Copycense points us to the news that TV broadcasters have sued SESAC, one of the collections agencies for songwriters and composers (the smallest, after ASCAP and BMI), claiming that SESAC is violating antitrust laws in how it prices music used in television shows -- especially for syndicated shows. The details are really quite fascinating. Local stations quite often run syndicated shows (such as sitcom reruns). When they buy the rights to run those syndicated shows, the package includes all of the related copyrights except for performance rights for any of the music included. Those have to be purchased separately by the broadcasters themselves. Now, for SESAC, representing the songwriters, this presents a golden opportunity. It's the only thing standing between the broadcaster and being able to show the syndicated shows -- and thus, it can ask for extremely high prices, or -- more commonly -- pressure the broadcasters into a high-priced "blanket license." Since the broadcasters can't change out the music (it's in the shows already), they generally have no choice but to go along. So, the argument goes, SESAC effectively has a monopoly position, and is abusing it.
Of course, the real "monopoly" here is copyright. At a quick glance, it certainly looks like SESAC is doing exactly what copyright allows -- but the structure of licensing for syndicated TV content allows SESAC to make life difficult for the broadcasters. So, I'm not really sure SESAC should really be faulted here, as it seems to be doing exactly what it was enabled to do thanks to overly broad copyright laws. At the same time, it also makes you wonder why the broadcasters don't go back to the TV program owners themselves and demand that they bundle the music performance rights as well, since there's more negotiating power there. So, while it does seem unfair for the broadcasters as the market is currently structured, I'm not sure it's an antitrust violation on SESAC's part. More a problem with how the industry licenses are set up, combined with copyright being way too broad in such situations.
There's also a separate interesting element to this lawsuit -- which is why it's SESAC being sued rather than ASCAP and BMI. ASCAP and BMI are both already limited due to previous antitrust fights and consent decrees against them, whereas SESAC has been more or less free to act this way. Either way, it's yet another lawsuit concerning aggressive use of copyright to try to demand as much money as possible, even for music that is a small part of an overall presentation of content.
The concept of zero took ages for societies to recognize, let alone understand. Mike has explained before how it's been a stumbling block in economics for some libertarian and "free market" types more recently. People who think about economics in terms of scarcity get upset when abundance pushes price down towards zero, as if the economic equation were broken. But if you flip the equation and think of it as a cost of zero, you realize that the trick is to use as much of those abundant goods as possible, adding value to complementary scarcities for which you can charge. Zero doesn't break economics, it just requires a different approach.
But artists and other creators hit a different stumbling block than libertarians (libertarian artists aside...). Zero is a problem because they feel like their art is worthless; they aren't hung up on scarcity, they're hung up on "devaluation." We've heard it from journalists. I hear it most often from fellow songwriters. The economic theory makes them feel as though their work is just viewed as some sort of cheap commodity. The thing is, value and price are not the same. Price is monetary value, but value is so much more than money. Price is what gets driven down to marginal cost, but value factors into the demand side of the equation. Expensive things aren't necessarily valuable, and valuable things aren't necessarily expensive. I value oxygen a lot, but it seems silly to pay for the air I breathe each minute, given the abundant supply.
More importantly, songwriters who get hung up on "devaluation" confuse recordings with music. They equate the two. A recording is not the song, it's just an instance of it, and a digital audio file is just an instance of the recording. Equating these reduces music to recordings to files. As important as recordings are, there's so much more to music. When you think of a song, do you think of the recording, or a memory you had connecting with the music? Do you think of the file and how much it cost, or the emotions, people and experiences that the music conjures up? The recordings are just a means through which we experience the music. Songwriters (of all people!) should know that the value in music is so much more than the price of a recording. It's not devaluing music to give it away for free, but it can increase its value by allowing more people to connect with it, to know, love and understand it -- to value it. It's through that experience that music is valued, not price!
Ironically, the underlying concern ends up being economic -- how will we make money? A price of zero for digital audio files doesn't mean that no one values the songwriting profession, or that no one is willing to spend money on music and keep songwriters in business. Sharing digital audio files makes the music more valuable and leads to more opportunities for monetization. When you give music away and connect with an audience, the opportunity for monetization is in the associated scarcities -- access, containers, community, merchandise, relationships, unique goods, the creation of new music, etc. -- by giving people a reason to buy. Getting hung up on "devaluation" is a distraction from the opportunity -- the necessity -- to experiment with new business models.
So, can we please stop complaining that free means devalued?
Blaise Alleyne is an expert at the Insight Community. To get insight and analysis from Blaise Alleyne and other experts on challenges your company faces, click here.
Via Shocklee comes this story of a company that claims to have created software that can recreate live performances by famous musicians (even dead ones). Basically, the software learns (or so its creators claim) exactly how certain musicians played, and then can mimic that style exactly. Here's how Pocket Lint describes it:
Zenph Studio's approach is to work out how the musician and the instrument acts and responds, then get a computer to play that track again as a real-time, real-life performance, which in turn can be recorded using modern techniques. The new track isn't a re-mastering, but a re-performance, as if the musician was actually playing it even though the artist may or may not be dead.
The technology works by ascertaining how an artist strikes a note and then recreating that note again. For the piano, the company takes into account everything from how an artist strikes a note to their hand movement, how they play when tired (yes, it can recreate fatigue) and even, as for the case of Jerry Lee Lewis, how they play with their feet. For the guitar there is even more to take into account, like pad placement, fingernails, and bending of the strings, the list goes on.
The result is that songs recorded 100 years ago can and will be able to be re-recorded with modern recording equipment, allowing old songs to be revitalised and enjoyed once more "in surround sound or headphone listening".
And, of course, the technology goes well beyond just remastering. In theory, you could create entirely new recordings by long-dead artists, matching their exact styles. As the article suggests, you could toss John Lennon into a Rolling Stones song.
Of course, if this sounds sorta familiar, that's because we were just talking about the legal mess associated with Bluebeat.com's claims that the music it offers from its site for sale are not the original works by bands like the Beatles, but an entirely new recording through a "psycho-acoustic simulation."
So, now, take this software that supposedly can perfectly mimic a certain musician's playing, and have it record a song. Say it's a new song. Who owns the copyright? What if it's adding John Lennon to a Rolling Stone's song? Who owns the copyright? What if it's an old song, updated in some slight way? Who owns the copyright? What if it's just the same song but "remastered"? Who owns the copyright? The legal questions raised by this kind of software are going to keep copyright lawyers busy for a long, long time.
One of the common criticisms we hear around here when we talk about the various business models that are working for more and more musicians these days, is that it's somehow "unfair" or even "wrong" that musicians need to think about business models these days, since they should just be spending all their time creating music. Of course, this assumes (incorrectly) that the same thing wasn't true in the past as well. For years, musicians have always teamed up with business managers and music labels for that very reason: to delegate some of the business tasks. That doesn't change in the modern era. What does change is that the different opportunities have grown significantly. Either way, Andrew Dubber (who's always worth paying attention to on these topics) recently put a comment on a blog post on this particular topic that is so good it shouldn't be buried as just a comment, so I'm going to highlight some of the key parts here:
Musicians deserve more money than they get. Most train harder and for longer than brain surgeons in order to do what they do, and then they earn less than checkout operators for what they do. I strongly believe that more money should go to more musicians more often than it does....
Making music is not (usually) a job of work. It is a creative act. You don't have the RIGHT to make money from your music. You only have the opportunity.
If you make music speculatively - that is, you create it in the hopes of making money from it, then you are a music entrepreneur. As such, entrepreneurship rules apply.
You may invest a good deal of energy, effort and expense in your creative ideas. You may make a lot of money. You will probably make none. But nobody OWES you money just because you put the work in.
If your business model is to grow and sell oranges, then it's no good picking the oranges, then leaving them on the footpath outside your house with a price tag on each one. It doesn't matter how great your oranges are, or how hard you've toiled in your garden. Someone WILL take your oranges. Some will get kicked to the side of the road. Some will get stepped on. But it's not because people are immoral and don't understand or appreciate fruit properly.
If you wish to be reliably rewarded for your music, then get employed to make music as your job.
Bingo. That's the point I've been trying to make for years on this, but said much better than I could express it. He then goes on to make another point I've tried to make in the past, which is that if you compare the situation today to what it was in the past, there are so many more opportunities to make money. In the past, it was nearly impossible to make money on music because there were so many gatekeepers.
The odds are stacked against you. History is littered with musicians who are disillusioned, embittered and broke. This was true before the internet just as it's true now. The internet is neither your saviour, nor your enemy.
Let me make that bit clear: prior to the internet, most people spent NO money on music. If they bought a record in a year, it was a gift for a nephew (and it was usually rubbish). Some people spent a lot of money on music, because it was tied up with cultural things like identity that they were really invested in.
Back when you needed a record label to just be heard, it was a lottery. The odds were bad, the lottery tickets were expensive, and most of the prizes - if you did happen to win - were just awful. Now you don't need to play that game - but you need to be smart and you need to understand what the rules of the new game are.
You CAN, of course, get signed to a record label (and that lottery is still in play) but you can also be an entrepreneur. I recommend the latter - but not because it guarantees you money.
But the simple fact is that you don't become a successful entrepreneur by making things that people will not pay for, insisting that they should, and then complaining that their morals are to blame. They may not share your morals, but that's not even the point.
It's not their job to understand your needs. It's your job to understand theirs.
You become a successful entrepreneur by meeting people's needs and wants, solving a problem for them and doing it in a way that allows you to make money.
I've said it before and I'll say it again. Even if it was true that all the people you wish to target with your art are immoral thieves who you would never invite into your home - why would you insist on trying to change their behaviour as part of your business strategy?
And he concludes by pointing out (as we have in the past as well) where the real "sense of entitlement" comes from:
You may make great and interesting music, and put on an amazing show with amazing costumes.... But decrying a sense of entitlement among those who won't pay you for what you insist on doing is back to front.
The people with the weird sense of entitlement are the ones who stamp their feet and say 'look at all this hard work I put in - where's my money?'
This one's from a couple months back, but I missed it at the time. Reader Amber Walker sends in this fantastic video interview with Tom Delonge of the band Blink-182 from the Guitar Center blog, where he makes many of the points that we discuss here, noting how technology has made it cheaper to make, promote and distribute music, and he thinks the big opportunity is in giving your music away for free, and recognizing that there are other things to sell, such as merchandise, but also subscriptions and other types of events.
Some quotes:
The one thing I've learned is that, like any other type of art, it evolves. So if you're a business that supports a type of art, you need to evolve with the art. Now, a lot of things have happened that have made creating art a lot easier with the computer. And it's also made the distribution of art a lot easier.... What I have chosen to believe is that if you look at your band with a modern filter, your band has so much potential to have all these different elements about it. You can create all this really cool merchandise and concert/live experiences. You can create a really cool portal on your website. You can mix all these elements together and I always believe that if the tools are available, you can monetize all these other elements, and not really worry about selling the record. In fact, I believe that, you should take down every barrier and put as much music out there for free...
In my mind, the way the music industry is changing is that music is easier to make and it's easier to give away for free. And that will enable the band and the music and the art and everything to be bigger than it's ever been. It's just how do you collect that and how do you build your business...
I think the internet's a funny thing, because anything... that cuts through the noise on the internet will get found. The beautiful thing about the Western world is that all good art will get found no matter what. It just might take a little bit more time for some than others.... To try to really make a presence known, a band needs to capitvate people online first, no matter what -- it can be with a video or a film. It can be a song or a live broadcast. It needs to be something that's really clever. To do that, you should study the campaigns that work....
Of course, he notes that at the core of this is still good music. He says that you don't remember a band years later just for the marketing, but you need that to get attention, and then you need the music to live for itself, which leads to an interesting mantra:
The true art is not just creating the music. The true art is seeing how many people that music can touch in various ways. That's the art. Because you can be as artistic as you want and no one hears it and no one likes it. The true art is trying to break through the noise and getting millions of people to notice.
Sounds quite a bit like the difference between invention and innovation that we talk about, doesn't it? Nice to see yet another artist who has this all figured out.
Dementia writes in to point out the rather ironic situation of a "free" concert put on by the band U2, at the remains of the Berlin Wall in order to celebrate the demise of the wall... but MTV decided to put up a big temporary barrier around the event so those who didn't have free tickets could not even see the event. Yes, they erected a special "wall" to block out a free concert about The Wall. As Dementia noted with the submission, "you're doing it wrong..."
We've been pretty big critics of the music tax concept, that was being pushed by Jim Griffin's Choruss along with Warner Music (who had hired Griffin to create this program). Of course, we've only been able to criticize what bits and pieces have leaked out from those who have seen Griffin's presentations. That's because, despite a busy conference schedule, Griffin never seems to publicly describe what Choruss really is. So, every time we hear some new info about Choruss, and explain why it's bad, we get angry emails from Griffin calling me all sorts of insulting names, and insisting that I've mischaracterized Choruss. So, we ask for more details, and we don't get them. Instead, we're given amorphous descriptions about how it's "an experiment." But what is the experiment? Well, it will be lots of things. As soon as we narrow in on an example, however, and explain why it's bad, we're attacked because the plan might not include that particular example. But we haven't yet heard an example that makes sense.
Griffin had agreed (as part of an angry email) to answer questions from the Techdirt community, and we obliged by sending him a long list of questions. Griffin had some personal issues to deal with over the summer, which was totally understandable, but we still haven't heard any answers. I'm beginning to wonder if we ever will.
But the biggest question I had was if he could explain who the "tens of thousands" of students were who Griffin told a conference in June would be using Choruss this fall semester. It seemed odd to find out that so many students had signed up for something when we still weren't being told what it was. As the fall semester started, we asked to hear from students who were using Choruss, and got silence -- which seemed odd. Apparently, it's because those tens of thousands of students hadn't signed up for the fall.
However, as a bunch of you have sent in, now the claim is that six college campuses will be testing Choruss this spring semester, but Griffin won't say who they are and the campuses won't admit to participating. They claim that they're afraid of backlash from folks like us -- but that makes me wonder. If the concept is so good, why not stand up and defend yourself for being a part of the program? If you can't defend the reasons for testing the program, it makes me wonder why you're doing it in the first place.
The article at the Chronicle of Higher Education provides a few new details that don't sound particularly appealing. Rather than (as some had suggested earlier, but since Griffin never made it clear, we just don't know if this was ever true) a system that would let students share files freely under some sort of blanket license, it sounds like "yet another limited music service." It will allow unlimited downloads, but you have to use the Choruss service (again, perhaps the article is wrong, but that's what it says). Similar services have been tried on various campuses and failed, so we're curious to hear what's so special about Choruss that will be different.
It still seems like Choruss is trying to solve a problem that doesn't exist. We're seeing more and more smart musicians put in place business models that work. They work in a way that lets fans choose to send money to the artists they want to support directly, without a big middleman. Choruss appears (from all we've heard) to be an attempt to set up a big middleman that will take big chunks of money and then use some magical process to figure out how to dole it out. But why do we need that overhead? The market is figuring stuff out. It doesn't need another middleman.
Live Nation gets a bit of a bad reputation for some of the way it handles large stadium shows, but of the "big" music industry players, it's actually one of the more interesting and better positioned companies out there, because it really has aligned itself to benefit from the sale of scarcities, rather than the sale of music itself. It does have some legacy issues, such as huge commitments to some large acts and a distracting merger fight with Ticketmaster, but the company is still worth watching. It's been trying to do more and more with its website, to make it something of a destination/e-commerce play, and its latest move is to make it more of a platform. Both artists and fans will be able to upload concert footage, as well as various community features (wikis, reviews, Twitter streams, fan Q&As and more). It increasingly seems like Live Nation is trying to enable a platform where fans and artists can connect, and on which fans can buy (mainly concert tickets, but other things as well). It's a smart move, but I wonder whether or not Live Nation ends up competing with a band's own web presence. What could be cool is if Live Nation also makes it so an artist can integrate many of these features into their own site as well. In the meantime, though, we're once again seeing why now is a great time to be a musician. There are so many different services that help enable artists to both connect with fans and set up business models.
While we keep hearing record execs and politicians bemoaning the state of the recording industry, UK music critic John Harris has written up a great article at the BBC pointing out how wrong they are, and noting that this is the "golden age of infinite music." Indeed. This is exactly what we've been saying for years, though not as eloquently as Harris:
Last weekend, by contrast, I had a long chat about music with the 16-year-old son of a friend, and my mind boggled.
At virtually no cost, in precious little time and with zero embarrassment, he had become an expert on all kinds of artists, from English singer-songwriters like Nick Drake and John Martyn to such American indie-rock titans as Pavement and Dinosaur Jr.
Though only a sixth-former, he seemingly knew as much about most of these people as any music writer.
Like any rock-oriented youth, his appetite for music is endless, and so is the opportunity - whether illegally or not - to indulge it. He is a paid-up fan of bands it took me until I was 30 to even discover - and at this rate, by the time he hits his 20s, he'll have reached the true musical outer limits.
What does all this tell us? Clearly, for anyone raised in the old world, the modern way of music consumption has all kinds of unforeseen benefits.
He notes that smarter musicians are realizing they can't just offer up "filler" material any more, but need to focus on music that's actually good, and that the industry itself needs to change:
So, yes, the record industry may yet have to comprehensively reinvent itself, or implode. Sooner or later, given that the need to read reviews before deciding what to listen to is fading fast, I rather fear that even music journalists may be rendered irrelevant.
But for now, this is a truly golden age - the era of the teenage expert, albums that will soon have to be full of finely-honed hits and the completely infinite online jukebox.
Even if the music business manages to somehow crack down on illicit downloading and claws back a few quid via annual subscriptions in return for that self-same endless supply of music, the same essential rules will apply. Really: what's not to like?
The one area where I disagree with Harris, is that he seems to think that this will push some artists to focus on creating more "hits" rather than more thoughtful music that "grows" on people. I'm not so sure of that (and I haven't seen it in the niche areas of music that I follow). Instead, because communities build up around certain artists or music genres, the community actually does a good job promoting the music and giving it life, rather than relying on it being a massive "hit."
We've said it before, and it should be said again: nearly everything about the music industry today is better. More music is being made than ever before. More people are making music than ever before. More people are listening to new music than ever before. More musicians are making money from music than ever before. Even more musical instruments are being sold than ever before. The only thing suffering is the sale of plastic discs (though, the sales of iPods are doing quite well). The problem isn't the music industry. The problem is with a certain small group of businesses who built their business on the concept of selling plastic discs.
Music is important. It is ubiquitous today with good reason: we just can't get enough of it, and its life-enhancing effect is ever-changing and ongoing.
If it had been possible for the past ten years to download nails, most of us would long ago have acquired all the nails we could possibly need, nail factories would have closed down, their workers and bosses found new jobs for themselves, and it would be a dead issue. But music-making is such an important act that millions do it even though they receive nothing for it. They always have done, even back in the heyday of the recorded music industry, when students bankrupted themselves to get it (I know I did) and bands scrambled to play gigs for next to nothing (guilty, again). So in the scheme of things music is at least as worthy of state subsidy than, say, the automobile industry. Music isn't any less precious than it used to be, it's just that its commodity status has eroded: unlike car workers the customary method of getting (some) artists paid is failing.
I am in favour of a flat fee on each internet connection, collected by ISPs, to encourage musicians to keep producing new work.
Now, I've gone into great detail on why a music tax is a terrible idea in the past -- but that was addressing ideas like Jim Griffin's Choruss plan (which, by the way, we're still waiting to find out who the tens of thousands of students who are supposedly already using it are, but we'll leave that aside for now). This idea, from Chris Ovenden, is slightly different. It is not a "download license" or a "download tax" as it's really a fund to pay for the creation of new music:
I would use such a fund to commission new works directly from up-and-coming and established artists. I certainly wouldn't try to monitor all downloads or anything hyper-impossible like that. If the problem of trying to monetize or prevent private copying goes away, so does the threat of monitoring all communications which is being suggested as a "solution" to the "problem" of filesharing... Keep the amount each person has to pay low, and spread the collected funds widely and evenly among as many working artists as is feasible. The more successful acts will most likely have other income streams and won't need a massive top-up; smaller artists will be grateful to have their next recording project funded. And everyone will benefit from an influx of lots of new work (released under CC license or similar).
This is, obviously a bit different than the usual suggestions for a music tax, but that doesn't make it much better. First as is noted in the comments on his post, if you open the door (even slightly) for this to happen in music, then you have to do it in pretty much every other content industry as well: movies will want their own tax, as will software, photography, newspapers, quilt making, painting, blogging and so forth. Where do you draw the line?
Second, this will still leave people who file share open to lawsuits. While he claims that the "threat" goes away, there's no way that the record labels say that they'll allow all past infringement in hopes of getting a few dimes sent its way from some bureaucracy.
Which, of course, brings up the third problem: you still have a bureaucracy, and how does it determine who to distribute the funds to? How is it possibly fair for someone -- rather than the fans themselves -- to determine who gets the money.
And that brings up the biggest point of all: this isn't needed. At all. There are plenty of ways for artists to set up a smart business model that allows fans to support them directly and to fund their future works. Why make it more inefficient by adding unnecessary and market-distorting middlemen? The only situation where this makes some sense is if there weren't ways for artists to go direct to fans with their own models. But there are -- and it's getting easier every day. So, instead of a "tax" give fans a "reason to buy" and it becomes a better situation for everyone involved.
WNYC's excellent radio program On The Media this week decided to spend an hour discussing the music industry. It's quite well done, in that it highlights how this is actually a great time in the music industry for musicians and fans -- with the only party really in trouble being the old record labels. The program talks to numerous knowledgeable people, including James Boyle, Amanda Palmer, Greg Kot and others. The one section, however, that I thought was a bit weak, was the section on live shows. That section only focused large stadium/amphitheater shows -- the kind that only a very small number of bands deal with. It doesn't even mention the much more common forms of touring and live shows. Furthermore, that section only seemed to talk to one individual -- a smaller concert promoter who used the part to basically bash Live Nation. Now there are things you can complain about with Live Nation (though, I'd argue that they've got a much better understanding of where the market is heading than most people give them credit for based on conversations I've had with Live Nation folks), but that segment was incredibly one-sided.
The other thing that I found incredibly telling was that the person who sounded most out of date and most in denial was not the RIAA representatives (who actually sounded at least somewhat circumspect on how the music industry was changing), but Rob Levine from Billboard Magazine, who still insists that it makes no sense to pay attention to "those who steal music." He brushes aside the band Ok Go for just doing "ok" as if you don't count unless you go platinum in record sales. He dismisses things done "as a hobby" as simply not mattering. He is, of course, defending Billboard's obsolete "charts" which are still based mostly on CD sales and radio play, but just comes across as someone who doesn't even realize what he's measuring (at 43:15 on the podcast):
"Right, okay, the one thing that does skew our ratings is that older people buy more music. They steal less music.... So like, you know, a Bruce Springsteen or a Madonna might overperform on the album sales chart relative to some more subjective measure of their popularity. But as far as like who's stealing what... I mean, what use is that?"
And that, right there, is why Billboard has become so obsolete. It's lead by people who think that file sharing is "stealing" and that it's meaningless in figuring out where the money is in music. It ignores the studies that have shown that people who download also end up buying more music. It ignores the studies that show people who download are more likely to attend a show or buy merchandise (things that Billboard doesn't appear to think matter at all in the industry). It's as if Billboard wanted to judge the popularity of the transportation industry by judging how many buggy whips are sold. Yes, as automobiles became more popular, buggy whip sales declined. Sucks to be you if you're focused just on measuring buggy ship sales, but the problem is that you're measuring the wrong thing.
Instead, the guy who sounds like he's really looking to the future is Duncan Freeman, of the site Band Metrics, who shows that the really important thing is not figuring out how many CDs are being sold, but how much fans are devoted to an artist (disclosure: I've met Duncan a few times at events, and talk to him occasionally about the music industry -- he's also given me an account on Band Metrics to check it out, even though it's not yet fully public -- though, I actually haven't used it yet). The program shows how a band can actually figure out where their biggest fans are, where they're getting the most buzz, and actually helps bands better connect with fans in multiple ways -- not just on the old model of selling them more CDs.
Oh yeah, one other point. Some Hollywood lawyers were getting on my case earlier this year, every time I claimed that the RIAA announced last year that it was no longer suing end users, even though it did keep suing. Those lawyers insisted that the RIAA said no such thing (even though that's what all of the press reported). In this podcast, the RIAA's Jonathan Lamy repeats: "Last December, we officially announced that we would end the litigation program against end users." Except it hasn't.
Overall, the program is a really great hour's worth of discussion on the types of things we regularly talk about here, and well worth a listen if you're interested in these things.
You may recall last year that the head of Warner Music Group, Edgar Bronfman Jr., demanded that music video games like Guitar Hero and Rock Bandweren't paying enough for the music they used in the games, saying that the success of such games was "entirely dependent on the content we own and control." As we mentioned at the time, this is the usual fallacy of the entertainment industry, to assume that the entire value of the product is in the content itself, rather than other aspects of it -- such as the gameplay. It looks like the initial sales results of the massively overhyped Beatles Rockband is helping to prove this point. Despite all the attention and press and the fact that this was the Beatles' music being offered in such a game for the first time, reader Eric alerts us to the news that sales of the game have massively underperformed expectations. Sales were less than 60% of what most analysts expected, and some of the quotes from people suggest why:
"[It] felt like an expansion to me, not a full release... [It was] cool, but not quite enough to be a stand alone game ($60) purchase."
That's just one quote, but others have expressed a similar sentiment. The music... that's nice, but you can get Beatles' music all over. It's the game that makes this worth buying -- or not worth buying. And just adding new music to an old game wasn't nearly as exciting as many people hoped it would be. This isn't to say the music is "worthless." But it does suggest -- yet again -- that the entertainment industry overvalues the contribution of the content itself.
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