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

from the figuring-this-one-out dept

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

What this is really about is the fact that the record labels that make up the RIAA wrote bad contracts. They wrote contracts based only on making money on selling CDs, not on selling music or the musical experience. Yet, the musicians themselves have recognized that there are plenty of ways to make money if your music is popular enough -- so they're thrilled to get any publicity that they can then turn into money (without most of it going to the RIAA). That is, via concerts, merchandise, sponsorships and plenty of other opportunities, and since none of that money is shared with the record labels, the musicians make out great. The real issue isn't about "protecting the artist" or "protecting the music," it's about the RIAA's bad business decision making. Of course, when other businesses make bad business decisions, they don't get to use the SWAT team to help them remedy the situation.
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  1. identicon
    misanthropic humanist, 19 Jan 2007 @ 5:46pm

    a silver lining

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

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

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

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

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

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

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

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