Latest Threat To The Music Industry: CDs

from the lalalala dept

We've talked before about the overhyped CD swapping site LaLa, and why it seemed unlikely to succeed. Services of this nature -- there have been several other attempts at the exact same thing -- tend to get filled up with the junk that people want to get rid of, as opposed to the CDs they really like, making them as popular as the dollar bin at the CD store. But a new report from IDC is sounding the alarm bells and warning the music industry that because these CDs are DRM-free (as virtually all are), people could copy them onto their computer before trading them. In fact, the IDC analyst is probably right that people will copy the CDs before trading, but then the whole of the used CD business is a threat too. And under that logic, even retailers of new CDs are contributing to the piracy problem. But then everything is already on P2P sites, which only need one person to upload an album for it to propagate; yet another person uploading Dark Side of the Moon, whether they got it through LaLa or Amazon, does nothing. If the music industry were serious about beating piracy, there's an easy solution: stop selling music. But assuming they don't want to take this drastic measure, they should look for fresh ways of selling music, as opposed to worrying that every new distribution model might contribute to piracy.

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  1. identicon
    BillDivX, 4 Aug 2006 @ 9:22am

    All of these are valid, however

    As an artist myself, I have first hand knowledge of how the industry treats ARTISTS, and they treat their "product" even worse than they treat their consumers. In fact, they treat their "product" as exactly that, a product, and not a human (or group of humans) with feelings, motivations, inspirations, and opinions which need to be cultivated in order to promote the songwriting process. Big corporations run by shareholders don't understand this. They think it's an assembly line, where you can come up with a "design" for a style of music, or something, and then churn out a billion of them.

    I have heard, and sometimes witnessed, the horror stories that a record label can wreak upon a newly signed band. Some stories of the worst accounts are to be found on the internet if you search around. Here's the deal:

    they send someone who seems young and cool, the kind of guy a band would least expect to screw them over. The problem is, the guy is just an assistant for the real guy, they hire him BECAUSE he's naive. Even HE doesn't realize he's about to royally screw you over. Then they get you to sign a contract. Except what you sign isn't a contract for how much money your going to earn, how many records you'll produce, etc. It's just a contract saying that you agree to sign with them. Essentially, they trick young, naive artists into signing a contract that forces them to only sign with that label, before they've even agreed to any terms. That band is then forced to negotiate with THAT label, come hell or high water, until a real contract is made. The band's time is consumed with the negotiations, for months, until they've lapsed their practice schedule, had numerous fights, and generally don't want to play together, or don't play very well anymore. they then go into a studio, unprepared, and cut a mediocre record, in a too short schedule, and get a tiny little cut because they signed away their right to take their business elsewhere, before they even had a chance to negotiate the terms of their payment.

    Because of this ungodly lame process (there are other ways to get signed that are safer, people like me know this, know the legal, and won't get screwed, but young high school kids getting their first break don't know any better, and it kills any artist to see a band with huge potential ruined because they didn't know what they were getting into). MOST OF THE BEST BANDS IN THE LAST 30 YEARS, YOU"VE NEVER EVEN HEARD OF. They tore up the amateur scene, built a huge underground following, without anyones help, because they were just that good. And then died out at the hands of the record label, before their first disc even hit store shelves. This is 90% of all the best bands that have existed, since about 1965.

    EVERY experienced artist knows that it works this way, and that's why every single one of us simply CANNOT WAIT for the day when we don't need them anymore. The labels see that day approaching. And they ARE afraid. It's one thing to have your product stolen, or to lose a chunk of your consumer base. Those are certainly bad things, but you can recover from them, by rethinking your business model. But, a far more critical hit to their business, is if your product itself simply gets up, and walks away.

    Equivalent to a software company, imagine if all the programmers came in one morning, and discovered that ALL the code, and ALL the docs, had simply been deleted. It's a death blow to the software company. Forget rethinking the sales model, or the marketing model, their ability to even produce a viable product is now gone.

    What this means, is that it reduces these companies to only one aspect of their business: advertising. When Bands no longer need the label to finance their album, or their concerts, it no longer becomes worth it for the bands to give a major share of their earnings (and control of their creative process) to what is essentially a middle man. The bands can now earn far more money, by directly hiring an ad agency to promote them. They pay the ad agency, and now the BAND is in control of their destiny. GREAT for bands. bad for record labels. The days of the specialized record label are almost over. Right now, the label arranges everything, and gives the band a cut (royalties). You'll hear far more good music coming out when the bands are in control, and just pay for services, based on how much they are earning.

    finally, as an artist, I most definitely encourage music sharing. It would only serve to make me famous without needing to sign with a label. As many artists are now realizing, if they go into it expecting that situation, they can plan up front to make their money from concerts and merchandising, and do VERY well indeed (mostly because the label isn't hogging 95% of the profits).

    Note that this is the exact situation that the Movie industry is also in, and their tactics for survival will need to be the same. Become a service to the artist, instead of owning and controlling the artist. The artist now has a choice to maintain control, and every artist (by the very nature of a creative thinker) will want to maintain that control, if given the choice. And the reasons for wanting that control are simple. One only need look at all the crap music, and crap movies, that get made when artists give up that control.

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