Don't Take Economics Lessons From Gene Simmons
from the kissinomics dept
Gene Simmons made a first career out of being an outrageous rocker behind the band KISS. He’s made something of a second career out of making totally ridiculous and outlandish statements and watching the reaction as people go nuts. His latest is no different as he (perhaps on purpose) shows no understanding of basic economics in trashing the concept of using free music as a promotional effort (found via Digg). He starts out by claiming that he told the recording industry bosses that they should have sued more students earlier:
“I called for what it was when college kids first started download music for free — that they were crooks. I told every record label I spoke with that they just lit the fuse to their own bomb that was going to explode from under them and put them on the street…. The record industry doesn’t have a f*cking clue how to make money. It’s only their fault for letting foxes get into the henhouse and then wondering why there’s no eggs or chickens. Every little college kid, every freshly-scrubbed little kid’s face should have been sued off the face of the earth. They should have taken their houses and cars and nipped it right there in the beginning. Those kids are putting 100,000 to a million people out of work.”
Of course, this isn’t even remotely true, and you’d think that Simmons would know it. Every aspect of the music business other than putting out CDs has been doing better. There are more bands making more music. There are more concerts and bands are making more money than ever before from touring. Tools for making recordings are selling better than ever before. Musical instrument sales are going up as well. More people are making money from music today than ever before. So it’s hard to take Simmons’ comments on the matter at face value. In fact some would argue that the whole reason that the recording industry is suffering is because they tried to follow Simmons’ idea of suing these kids. The interviewer tries to point out the Radiohead and Trent Reznor examples as to why he might be wrong, and he brushes it off:
“That doesn’t count. You can’t pick on one person as an exception. And that’s not a business model that works. I open a store and say “Come on in and pay whatever you want.” Are you on f*cking crack? Do you really believe that’s a business model that works?”
That’s a nice sleight of hand trick there. First he tries to set the parameters by saying that you can’t pick an exception… even though he was the one insisting you can’t make money with free music — so an exception is pretty important. Then he says it’s not a business model that works, but actually it appears to be working quite well. Finally, he makes an incorrect comparison to a shop selling tangible goods. He never actually explains why using free as a part of your business model doesn’t work, he just says it doesn’t — even when presented with examples where it does work. Then, he really goes off the economic rails. When the interviewer suggests that music can be promotional for tours and merchandise, Simmons responds:
“Well therein lies the most stupid mistake anybody can make. The most important part is the music. Without that, why would you care? Even the idea that you’re considering giving the music away for free makes it easier to give it away for free. The only reason why gold is expensive is because we all agree that it is. There’s no real use for it, except we all agree and abide by the idea that gold costs a certain amount per ounce. As soon as you give people the choice to deviate from it, you have chaos and anarchy. And that’s what going on.
Except that… no. First of all, it doesn’t matter that the music is the most important part. Breathable air is the most important part of living, but we’re not paying for it, because it’s abundant. He says “without [music] why would you care?” but no one is saying the music goes anywhere. They’re just saying that the music is used to make lots of other stuff more valuable. As for his ridiculous assertions about the price of gold, apparently Simmons doesn’t believe in supply and demand, and thinks that economics is all based on shared delusions. That would explain the rest of his comments.
Anyway, the kicker in all of this is that despite Simmons comments, it appears that even he doesn’t believe what he’s saying. Right in the middle of his tirade about how you can never get paid for putting out music if people can get it for free, he notes that he’s coming out with two new boxsets of music. Apparently, despite his complaints, he does think that people will pay him — and he’s probably right about that, despite being wrong about everything else.