It's Not Exploitation If You Chose To Take Part

from the repeat-after-me dept

Well, the buzz of the weekend seems to be around a New York Times op-ed by musician Billy Bragg upset about the sale of Bebo to AOL earlier this month. Bragg's complaint is an old one that we've heard before: Because musicians chose to put their music on Bebo and that helped attract users, don't they deserve some of the $850 million that Bebo got from AOL. Not surprisingly, Nick Carr, who has been pushing this obviously false notion that "user-generated content" is exploitation, comes to Bragg's defense with his usual technique: sound smart, make some interesting points, and then wrap it up with a conclusion that is in absolutely no way supported by the facts.

Let's break this down. The first complaint is that somehow Bebo was "using" this music for "free." This is false. There was a fair trade in an open marketplace that made this happen. Bebo offered musicians a chance to promote themselves (for free) to its community. Musicians accepted this offer, and in exchange, provided their music for free. No one was forced into it. No one was compelled to do it. If either party felt the other was unfair they could choose not to engage in the trade -- and they could also vocally complain. In fact, Bragg did just that when he felt MySpace's terms were unfair, and they changed them. So by choosing to accept Bebo's terms, clearly they were perfectly acceptable. It was a fair trade.

Bragg goes on to assert: "The musicians who posted their work on Bebo.com are no different from investors in a start-up enterprise. Their investment is the content provided for free while the site has no liquid assets. Now that the business has reaped huge benefits, surely they deserve a dividend." Actually, they're very different from investors. Investors made a very different trade. They traded money for equity. Again, it was the fair and open market that allowed that. If Bragg had wanted to trade music for equity, he should have discussed it before... not after. You can be sure that any investors in Bebo didn't ask to change the terms of the deal after the buyout went through.

Complaining after the fact about what happened is like selling a bunch of wood to a builder for a few thousand dollars, and then complaining when he turns that into a million dollar house. Was the wood seller exploited? No. He made the fair trade, and the builder was then free to do what he wanted.

Nick Carr's response to all of this is especially wrong. He writes: "When challenged in this way, the plantation owners counter that they are doing musicians a favor by providing them with a place to promote their work." That is incorrect in so many ways it would take another whole post to get through them all. But let's take the simple point: no one is saying they are doing musicians "a favor." They are saying that there's a fair trade. You give music, we give promotion. No favors at all.

Carr and Bragg go on to use radio as an example, noting that it pays royalties, so why shouldn't social networking sites. This is incorrect for a variety of reasons. First, in the US at least, radios do not pay musicians royalties. This was a decision made by the government that since musicians benefit from airplay, no royalties are needed for the musicians (other royalties are paid for composers and publishers). However, much more to the point was that for most of the history of popular music, those royalties have been meaningless -- as record labels went through all sorts of contortions to have the money go in the other direction. What's sometimes called "payola" has gone on for years, with the record labels effectively bribing radio stations to get music on the air -- recognizing that the promotional value greatly outweighed the royalties coming in.

In other words, a free market will let the benefits to both sides balance out. If payment needs to even up one side, then the market will determine that. But, many musicians made a fair trade decision to take up the offer that Bebo made. It's their own fault if they feel they got the short end of the stick, but they clearly were happy to go along with the deal originally. Buyer's remorse and sour grapes are no excuse. If anything, this sounds quite similar to Doug Morris' ridiculous belief that no one else can make money.

To understand this most simply, it goes back to the psychological explanation we discussed earlier this year, where relevancies matter. People dislike seeing someone else made much better off, even if they are better off themselves. These musicians felt they were better off by using Bebo, but they're now upset that Bebo's founders are relatively better off than they are at the end of the deal. It's a weird world when someone would prefer to be worse off, rather than seeing someone else be even better off. In the meantime, if you'd like to read an ongoing debate between Billy Bragg, myself, Tim Lee and Joe Weisenthal, check out the post on Joe's blog where we all discuss this in the comments.

Filed Under: billy bragg, copyright, music, nicholas carr, royalties, social networks
Companies: bebo


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  1. icon
    Mike (profile), 24 Mar 2008 @ 3:38pm

    Re: Re: Bebo, Bragg and

    The emphasis is on the word "paying" - that means giving them cash to spend!

    They are getting paid. The additional attention from being on Bebo, helps get them paid in other ways: more concert revenue, more demand to see them live, more downloads, more t-shirts sold, more demand for a new album, more more more... all of which equals more cash.

    Read this: http://www.techdirt.com/articles/20070503/012939.shtml

    In other words, if the SocNet pays them no money - cash - then they are unable to fund the rest of their miserable artistic existences of freezing garret, absinthe and stale bread because one can't pay for that in distribution links.

    Again, do NOT confuse giving away your music with not being able to make any money.

    Since the music acts as a promotion, it helps them sell MORE of everything else. So I'm saying that they make MORE money this way by giving away their music for free.

    But in music's case you won't get it from the "rest of the sales opportunities" via trad media outlets, because endgame that is all gone. The total market size of Concerts, ringtones and T shirts does not equal the consumer music spend, is also not an easily leverageable market (unlike software), and is in any case hugely skewed to a small % of very famous acts.

    Er. You are wrong. You DO get that from the rest of the sales opportunities, and note that all of those opportunities GROW because the free music makes them all more valuable.

    In fact, most bands today make nothing from actual music sales (the labels take all of that) and live performances are where the money comes from anyway.

    And, actually, you're wrong in saying it's highly skewed. It's becoming less and less so. The top acts did less well last year, but the overall revenue from concerts grew dramatically -- with most of that being on the "long tail" of acts.

    Sadly, many of the "Open Model" offset options are not open to the Talent - Ad revenues are hoovered up by the distributor, Bragg cannot sell SLA's and Services around his free musicware, and he cannot sell his music as a loss leader while making money elsewhere because - well because the free model has decimated that.

    Again, not at all. You seem to not understand the model at all. I have pointed to musical act after musical act that has made this work, small and large. Why do you suddenly think it doesn't work.

    So where do you propose, given very few (and much smaller) alternative options, and zero income from the New Model Distributor, that the creative musician gets the pennies to live on?.

    Again, this is simply incorrect. There are MORE options for them to make money. The music makes every scarce good around them (concerts, access, new albums, t-shirts) more and more valuable.

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