David Lowery Wants A Pony

from the the-rest-of-us-live-in-reality dept

I'm kind of amazed at how many people have been sending over, tweeting or submitting David Lowery's "Letter to Emily White at NPR All Songs Considered." Everyone seems to think there's something worth commenting on there, but I can't find it, frankly. Lowery, as we've discussed before, has some nonsensical ideas about the strawman he thinks is "the new music business model" which is somehow worse than "the old music business model." He's both right and wrong. It's "worse" for some people and better for others, but there's one thing that's not debatable: it's not going away.

His letter to Emily is both right and wrong. He exaggerates what Emily actually said, and paints her as some massive pirate, despite the fact that she doesn't use file sharing networks and the gist of her blog post at NPR was basically that she and her generation just don't see the point of "owning" music any more since it's so widely available. Access, not ownership, as they say. But to Lowery, that appears to be a huge sin, because the way a few musicians made money in the past was to sell music, and thus, forever must it be the same.

Toss in some righteous indignation that some tech companies have figured out ways to provide useful services that people want to buy, a confusion over correlation and causation... and suddenly Lowery claims to have made a "moral" argument that we should all go back to paying for music in a world where many people don't see how that makes sense.

Yes, and I'd like a pony too.

Look, I spend an inordinate amount of time looking at new business models for content, because I think it's important to support culture. But my focus is on what's working in today's market, not pining for the way things used to be. As Bob Lefsetz eloquently said in response to Lowery:
While we’re at it, why don’t we save the printers’ jobs too. And bring back Smith-Corona. That company had employees…

I believe artists should be paid. But that does not mean they should be paid the same way they used to be
There are amazing new business models that work. What doesn't work is sitting around and pining for the old days or lecturing people on a "morality" that they clearly don't agree with (and its even worse when you try to make them guilty for using services they find useful). That's just not a workable strategy. Again, to Lefsetz:
To be fighting file-sharing is akin to protesting dot matrix printers. File-trading is on its way out. Because it takes too much time to do it. And you don’t fight piracy with laws, but economic solutions. It doesn’t pay to steal if you can listen instantly on Spotify and its ilk.

And please stop bitching about the low payouts… That’s like saying Apple should liquidate and give the proceeds back to its stockholders, which is what Michael Dell so famously said in the nineties. Spotify is a trojan horse. You get hooked, and then you pay for higher quality on your mobile. Facebook stock gets hammered because of its inadequate mobile strategy and you’re not smart enough to see the connection to music??? You can’t get Spotify and its brethren on your handset without paying. And you will. Because you like the convenience of having all your music at your fingertips all the time.
The complaints of low Spotify payouts are a mirage. Go talk to Jeff Price, a guy who knows this stuff better than just about anyone, and let him explain just how the streaming world is developing. There's a huge and growing opportunity here, and people who look at the snapshot view rather than the trends are missing the big picture. The innovator's dilemma teaches us that the old guard always mocks the new players for being too small or not paying enough. But they miss the trendlines for the snapshot. And when the trendlines converge, they get run over.

David Lowery can ask for a pony all he wants, but it doesn't change the reality. Let's focus on the reality of the models that are working and the opportunities to enable more great new things. Lefsetz points out that we should focus on making great music and the other things will start to sort themselves out. Price points out that if we focus on enabling more useful services (the kind that Lowery dumps on) there's a ton of money to be made (more than ever before). There's a world of opportunity there, but David Lowery wants a pony and wants to make a moral example out of a young music lover who just wants to listen to music.

David Lowery wants his pony, sees a tide to hold back, and plenty of windmills to tilt at, but the rest of us prefer to live in the real world.

Filed Under: bob lefsetz, david lowery, emily white, file sharing
Companies: spotify

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  1. icon
    Karl (profile), 19 Jun 2012 @ 11:32pm

    Lowery is a liar

    But most record contracts specify royalties and advances to artists. Advances are important to understand–a prepayment of unearned royalties. Not a debt, more like a bet. The artist only has to “repay” (or “recoup”) the advance from record sales.

    What he doesn't mention is that all of the recording costs are taken out of these royalties. Plus, usually, a good portion (standard is 50%) of the promotional costs. The only thing that is not taken out of artists' royalties are the physical costs of pressing a CD and printing the artwork (of course, designing the artwork might be). And, if you're signing your first contract with a label, all of the production options - producer, studio, etc - are determined by the label; diverging from their plan will cost you "points," or a percentage of your royalties.

    In the end, most artists will make far less than minimum wage from their advance. In return, they lose all the rights to their music.

    Secondly, by law the record label must pay songwriters (who may also be artists) something called a “mechanical royalty” for sales of CDs or downloads of the song. This is paid regardless of whether a record is recouped or not.

    This is true. He does, however, leave out the fact that if the songwriter is also the artist, they will be paid only 75% of both artists' and songwriters' royalties, under a "controlled composition" clause. It's also important to realize that these royalties usually max out at 10 songs per CD. And that only 50% goes to the songwriter, the rest to the publisher (which is often, not always, the record label).

    Let's say a label presses 30,000 full-length CD's. To keep it simple, we'll assume it's a solo record by a singer-songwriter (the "best-case scenario" for these sorts of royalties). The royalties from those CD's that go to the songwriter will be $10,237.50.

    Now consider that if a recording artist only sells 30,000 CD's, they will earn nothing from performer royalties. This is quite literally all they will get from the label.

    Oh, and sites like iTunes? They pay more for these royalties than the record labels. Oh, and those songwriter royalty revenues? They're rising, and have been for years.

    Meaning that the file sharing sites could get the same license if they wanted to, at least for the songs.

    This is total and complete bullshit. File sharing sites legally cannot partake of these royalty schemes.

    Artists can make money on the road (or its variant "Artists are rich").

    This is just conflating two different things. "Artists can make money on the road" is a statement of the undeniable fact that most artists - even those on a major label - make more money "on the road" than they do from record sales. For example, the 2004 top earner in music was Paul McCartney. How much of his money was from recording and songwriter royalties? Less than 15%. Musicians have always made money from touring, not from record sales.

    I agree, however, that there is a bit too much "artists are rich" BS bandied about by the general public. But, most of the complaints are not that "artists are rich," but that "abel guys in suits are too rich." The fact that those same suits love to sue the public, or pass draconian laws, doesn't help.

    If you are one of those "screw the Top 40 artists" type people, then remember this. The whole "rock star," hookers-and-blow, trashing-your-hotel-room persona? It was always a total myth. Generally speaking, even Top 40 artists work 60+ hours per week, get up at 6am, and have no time to sleep in hotel rooms, much less trash them.

    The "rock star myth" is a deliberate creation of the major labels, in order to entice young wanna-be musicians into being exploited. It has no bearing in truth. The fact that this myth is now backfiring at labels is poetic justice; the fact that it's backfiring against the musicians themselves is tragic.

    Over the last 12 years I’ve watched revenue flowing to artists collapse.

    What he's actually saying is that revenue flowing from major labels to artists has collapsed. He's right. But that's not because of piracy. It's because of things like a la carte music purchases; the decision by major labels to kill CD singles; their decision to stop dealing with record stores, and focus on "big box" stores like Wal-Mart; and other bad decisions made by an industry that is used to being a monopoly. There is plenty of blame to go around for the collapse of the CD market; none of it lies with pirates.

    And, notice that he doesn't go further back than 12 years. That's because 12 years ago was the year the record industry made the most money in its entire history. It did that because people were re-buying their LP's on massivly-overpriced (and price-fixed) CD's. In fact, the profits from record sales now are roughly equivalent to sales at the height of the 1980's. (He chose 1973 for a similar reason; prior to 1999-2000, this was the year when people spent the most on recorded music in history.)

    There is no other explanation except for the fact that “fans” made the unethical choice to take their music without compensating these artists.

    There wouldn't be, since Lowery never even considers any other explanations. Nor does he offer a single iota of evidence that "fans" sharing music caused even a single one of the ills that he claims.

    It's also incredibly insensitive and tacky that he uses Chestnutt's suicide to advance his own agenda. There is no reason whatsoever to suspect that Chestnutt's suicide had anything whatsoever to do with filesharing. In fact, in his last interview, his biggest concern was that his hospital was suing him for $35K. (This is far, far less than what file sharers like Jammie Thomas are facing. Something to think about...)

    Similarly, there is absolutely no reason to think that Sparklehorse's Mark Linkous committed suicide due to file sharing. On the other hand, his dire financial situation just might have something to do with the fact that EMI refused to release his album with Dangermouse, over continuing resentment about "The Grey Album." In other words, it makes more sense to say copyright enforcement killed him, not piracy.

    What a douchebag.

    You know, I could go on with this. But there's just too much of it. It is all bullshit.

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