from the funny-how-that-works dept
Ah, the RIAA blog. It’s a never-ending source of entertainment. In the past, they’ve tried (and failed) to address some of my arguments directly, but as someone noted, one of their recent posts again appears directed my way (not just me, but a few others as well). In it, the RIAA tries to suggest that alternative business models can’t possibly work. Since many of the arguments the RIAA tries to debunk sound sorta like the arguments I make, it seemed worth responding — especially given how badly out of context the RIAA takes them in an effort to convince itself that it’s still necessary. Let’s start with the title:
IS TOURING ALONE ENOUGH?
First of all, there aren’t that many folks who claim that touring alone is enough of a business model, and the rest of the post doesn’t focus on “touring alone,” but on a variety of alternative business models, which makes it a weird and entirely misleading title. In fact, a year ago, we explained why (just like the RIAA is pointing out) touring alone probably isn’t enough to replace the revenues of the recording industry — but that if you combined touring with other business models, it certainly could work quite well. But by using “touring” as the peg, the RIAA can debunk touring alone and pretend (falsely) that it’s debunked the entire space of alternative (smarter) business models. Neat trick, but easy to see through.
Some industry observers like to suggest that efforts to address the theft of music online are somehow tantamount to efforts to maintain an “outdated business model” rather than to address forms of unfair competition based on illegal acts.
Now, I am one such “industry observer” who has pointed out that the RIAA has made a Herculean, if ultimately self-defeating, effort to maintain its outdated business model. But that has nothing to do with “theft of music online.” It has to do with the changing economics of creating, promoting and distributing new music. Some of that may involve some amount of copyright infringement, but the business model of the RIAA was outdated even in the absence of infringing uses — and, of course, such infringement is not and never has been theft. Of course, the RIAA knows this, but this blog is a weak attempt at painting itself as a victim, after decades of denying musicians money that it actually owed them. So, the best they can do is pretend that these new technologies represent “theft.” Weak.
The suggestion is there are ample alternative mechanisms for generating revenues from music — money from touring, selling merchandise like t-shirts, licensing music for commercials.
Yes. Indeed. But it’s not a suggestion. There’s a fair bit of evidence to support that. In fact, we’ve shown multiple studies from multiple sources and multiple locations all showing this is true. So, it would take quite a debunking from the RIAA to prove this wrong. But, of course, the RIAA doesn’t do so. Because it can’t.
Completely ignored are the pleas for enhanced copyright protection from artists and unions
A bit of a non sequitur, but not ignored at all. In fact, it’s no surprise that artists and unions would want gov’t-backed monopolies that mean they have to work less hard to obtain royalties. Who wouldn’t want that? But a bunch of self-interested folks begging the gov’t for protectionist policies is hardly evidence that copyright isn’t being abused to prop up an outdated business model. If anything, it supports that view even more.
Instead the handful of established artists for whom Internet anarchy works as an effective marketing tool are cited.
Wait. That’s just a lie. For years, we pointed out unsung artists who were making this work — artists like Maria Schneider, and in response folks like the RIAA told us that “sure, this model might work for no names who have nothing to lose by giving away their works, but it’ll never work for the big artists, like those we represent.” Yet, now that it is working for those artists too, the RIAA wants to pretend it only works for them? Nice try, guys. But, as we’ve demonstrated over and over and over again, with a large and growing list of artists (not just “a handful”), this model works for artists up and down the music food chain. The RIAA says it only works for “a handful of established artists” but doesn’t explain the success stories of folks like Corey Smith, Motoboy, Matthew Ebel and others who were hardly “established” when they began using these methods for their own success.
No one has ever said that everyone can succeed with them. However, one thing we have seen is that pretty much every artist who has embraced these models and principles has done better than they did trying to go about things the old way. Those who were on big labels found that they made more money this way. Those who weren’t on big labels also found they made more money this way. And, we’re not saying this is anti-label. There are lots of smart music labels that are embracing these principles as well. Just not the ones who run the RIAA.
Even more importantly, the reality of the marketplace is ignored in favor of theory.
There’s only one party in this conversation ignoring “the reality of the marketplace… in favor of theory,” and considering that we’ve posted numbers on most of the artists we’ve talked about, and the RIAA is best known for either not sharing or totally making up numbers, take a wild guess who’s in reality and who’s focused on “theory.”
While touring and merchandise sales will work for some bands — most notably big bands that “made it” in the 80’s, 90’s or earlier (and built on the back of touring support from music labels) — it is exceedingly challenging for other bands to generate sufficient income just from touring, and touring support from the labels is rapidly disappearing.
See what the RIAA did there? Now it goes back to pretending this is just about touring. Of course, it’s not. Most of the models we discuss don’t focus just on touring.
Check out this article in BBC News about UK rock band Doves. And of course, without brand/name recognition, merchandise sales are commercially irrelevant.
That BBC article is quite one-sided, and basically says that the labels aren’t providing tour support any more. And that proves what? It proves that the RIAA itself is screwing this up, by not supporting one part of the business that is making lots of money. I’m not sure what that proves other than that the RIAA is really bad at figuring out how to adapt to the changing world.
But, more to the point, the idea that bands can’t tour without support from a major label is just silly. There are all sorts of new and more efficient ways for bands to find gigs and create tours. Sites like Eventful, SonicBids, Songkick and lots of others are making all sorts of useful tools around touring, that make it possible to do shows on a much more efficient and cost-effective basis. Yes, the big labels provided lots of money for tours in the past — and they did so in a wasteful manner. But rather than become more efficient, now they’re just hoarding their cash and blaming everyone else!
As for the lack of “brand/name recognition” making it impossible to sell merchandise, that’s true. But the RIAA seems to be implicitly stating that the only way to get brand/name recognition is through a big RIAA label. Yet, the examples we’ve shown over and over again have focused on musicians figuring out how to connect directly with fans themselves. Without the need for massive marketing from the RIAA.
One last question: how is generating revenue from licensing of music to sell other products more socially useful than the sale of music itself?
Ah, yes. The “socially useful” question. It sounds great, but is entirely meaningless. After all, how is generating revenue from smelly automobiles that break down more socially useful than selling horses and buggies? Or, perhaps a more apt comparison: how is having all your phone calls connected directly more socially useful than having operators manually connect each call? Social utility doesn’t matter. Economics doesn’t care about social utility, and in the long run, in every single case, people tend to discover that there is more social utility in embracing progress rather than denying it.
Cars became more socially useful than horses and buggies by making travel more efficient and faster — even if it hurt those who relied on the old system (horse shoers and buggy whip makers, for example). Automated telephone switching created a much better phone system, and other advancements including the internet — even if it meant a lot of operators lost their jobs. And generating revenue from alternative means by selling other products is more socially useful than the sale of music directly because it’s more efficient. It allows for less expensive creation, promotion and distribution of music — meaning it brings more music into the world, helps more people hear more music more quickly for less cost — and, in doing so, opens up tons of more efficient and socially beneficial business models.
Besides, isn’t it just a little ridiculous for the recording industry — who has filled landfills with non-degradable plastic discs to start talking about how “socially useful” its business model is?
It seems to me that this is the worst of all worlds, one in which all artistry will not be rewarded — and one in which only music that works well in selling diapers and cars will be commercially produced. Is this supposed to sustain the diversity of music that we want? Would we have Bob Dylan, Leonard Cohen, Patti Smith, the Sex Pistols under this kind of system for compensating artists? Not remotely.
Ah. and now the shift. Suddenly the RIAA is pretending that this is all about product placement and commercial licensing. Except, it’s not. And, uh, last I checked, Bob Dylan was shilling for Victoria’s Secret, so apparently, he’s perfectly happy with such a system.
Exactly what kind of product licensing would have sustained the Smiths or Nirvana? Was there anything on Springsteen’s first record that would have drawn the attention of advertising companies? In fact, we never would have had Elvis (either one)! This is an alternative universe in which I would not care to live.
Now this is rich. This from an industry that kicked all sorts of fantastic bands to the curb, because their music “wasn’t commercial enough” for the major labels… and now it’s complaining about how music will be “too commercial” under this new system? Except, of course, that’s not true. If you listen to the music from different artists who have embraced these models, you’ll find all kinds of music — and much of it isn’t commercially driven at all. In fact, that’s why fans like it so much, because it’s not being programmed by some exec in New York, but directly between the musicians and their fans.
Sorry, RIAA, you are protecting an obsolete business model, no matter how much revisionist history you cite and how many out of context arguments you make. Of course, we’re more than willing to help your members figure this stuff out. They can just give us a call. In fact, more than a few already have. This might explain why they’re questioning the value of continuing to be members of the RIAA.
Filed Under: business models, music industry, musicians, touring