“Piracy seems to be the result of society not buying into the idea that something that can be easily copied should cost anything.”

Piracy is the fault of record labels sort of like a broken condom is the cause of Down Syndrome. If you think about it, that analogy works well for 8 track piracy.

I’ve said before that largely the labels are obsolete, or should be, or at least could be, provided the artists wish to pursue their own marketing in today’s digital environment. It’s interesting that 8 track bootlegs were available in many places, but for a fraction of the cost. So they had a decent distribution network in place, which is supposedly the biggest cost to labels besides marketing. There’s no denying that the labels cashed in on the music by price gouging for something that really didn’t need to be that expensive.

That said, the cost of a song has always been about a buck, forever. Single sided shellac 78 rpm records cost right around a buck back in the late 1800’s – a song on Amazon or itunes is 99 cents today. If the price kept pace with inflation, the price today would be around $26 per song. Sure cylinder records cost a lot more to produce than an mp3, but in the 1960’s-1970’s labels needed to produce albums on reel to reel, 8 track, 4 track, Playtape, vinyl record, cassette tape – all within a time period of five years. Without digital delivery and marketing the cost might have been justified during that era while people couldn’t seem to decide what format they would use, but today, there is little reason to continue charging a buck a song.

There are several things that are “killing” the music industry in terms of sales and solving one of them will do nothing to save it or bring it back to the way it was.

1. As Stever pointed out, kids aren’t buying as much music. And we no longer have to buy the whole album to get one song we like.
2. Piracy – good or bad or justified or not, it does exist.
3. Online streaming sources – Pandora, Rhapsody, etc. where you can virtually handpick a radio station.
4. Indy – Is there any type of reporting done by independent artists on their sales, and is it calculated into the whole?
5. Online stores – in 1910 if you dropped a dollar on a Caruso record, you bought it for the Victrola in your living room…maybe your next door neighbor might listen to it or borrow it. You most certainly weren’t going to listen to it, then use your Edison dictaphone machine to scratch yourself a copy and put the original on Amazon for a penny to sell to someone 3000 miles away.

The top ten online music stores selling albums (not mp3s) have hundreds of millions of albums available. Most are either used or have already had their original sale factored into the sales statistics. No resale (including CD transfers that many offer) on these sites results in any money going to the labels or artists.

Factor in the sales of LP-CD, cassette-CD decks and even legal backups of copyrighted material now result in lost revenue. But it is only a theoretical loss, as like I said before, there’s no guarantee that the person making a CD or mp3 of their Pink Floyd album would have actually purchased a new reissue CD or record.

When you’re looking at examples of artists using new methods of distribution successfully you should check out what Tom Waits is doing. He seems to be more popular now than he was 35 years ago, was just inducted into the Rock and Roll hall of fame. He is on an independent label that allows him, apparently, to put out lots of albums. He even had a release on 78 rpm record last fall that was bundled with a brand new limited edition record player with proceeds going to a charity.

I see the record labels acting a bit like the USPS when email was a new thing. Instead of utilizing the new technologies for growth, their lack of foresight resulted in a new format threatening to put them out of business. Eventually they will survive on royalties/licensing of previous songs alone as there will be little need for artists to pay the labels for exposure.