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In reference to this BBC article that claims people who illegally download music also “spent four and a half times more on paid-for music downloads than average fans”, a friend of mine writes:
How long have we all known this, and yet it’s still news?
And she has a point — we do all know that. Yet the music industry (and by this I mean the major labels and the RIAA) continues to whine and complain to Congress (and sue their customers) over how file sharing is killing their business model, and yet they are turning record profits year after year. And more to the point, the people that download music (even illegally) are the same people that really like music. And most of them seem to buy a lot of music.
Now correllations do not equal causality, but one could make the case that the filesharing is in fact leading directly to increased sales. And the reason is obvious — filesharing increases exposure for artists, exposure generates interest, interest generates sales. Sure, everyone could listen exlcusively to music they downloaded (illegally), but that’s not always the best or most viable option. A legal CD sounds better, contains better meta information (such as the packaging), is more accurate (no missing tracks), and, thanks to “long tail” superstores like Amazon.com, is often easier to find.
I’ve personally purchased (legally) 18 CDs from Amazon so far in 2005, 8 from the iTunes music store, and 4 or 5 from Amoeba Music across the street. Hmm — 30 albums for a guy that certainly knows how to download them for free. And not surprisingly, I’ve also downloaded a half dozen tracks, 6 or 7 remixes/mashups via Bittorrent, and even a full album or two from sites such as the grey-market All Of MP3. But most of the time I first heard the artist either own their own website (via the selection of free MP3s that smart bands offer), or bootlegs on audio blogs. I.e., those “free,” and sometimes illegal, songs sold a hell of a lot of albums.
I buy music because I value sound quality and want to listen to the complete package, as the artist intended. (That said, I basically throw away the CD cases and rip everything to digital media.) What I am really looking for, and am willing to pay up to $50/mo for is: high quality (i.e., none of this 128 bitrate crap), diverse selection (extending deep along the long tail), DRM-free (if I can’t play it on a Mac or Linux, it is useless to me), downloading or streaming service. Give me that and you have a replacement for my current combination of legal and illegal music consumption.
To the RIAA — your time is running out. No one is buying the sob stories, even if they are buying your music. And by the way, I still stand by my claim that the iTunes music store is bad for consumers. But apparently it’s pretty good for the record industry.
July 27th, 2005 at 2:46 pm
rock on.
July 27th, 2005 at 2:47 pm
“rock on”
That’s the idea, isn’t it? : )
July 27th, 2005 at 5:32 pm
An email exchange that pretty much sums up iTMS:
Exactly.
July 27th, 2005 at 7:21 pm
except… that it’s so damn convenient!
and i love the podcating feature.
August 2nd, 2005 at 7:49 am
i actually don’t have much problem with the quality on iTunes myself, but then i’m not much of an audiophile. i’ve grown increasingly attached to emusic.com, however, which is a subscription based site for non-DRM, straight up MP3 files. once you have this, there’s no reason to steal music.
at least i can burn the music from iTunes onto CD’s - too many CD’s come with copy protection now which won’t even let me do that. drives me nuts.
August 2nd, 2005 at 7:52 am
I used to love EMusic. Used to. And then they changed the pricing and service model. You can read my take on them (and a number of other services) with this EMusic review.
But otherwise I agree — they had exactly the right idea.
August 2nd, 2005 at 8:09 am
I actually had a conversation over dinner recently with my wife’s uncle who is in the music industry about where things are going. Generally speaking, he says that he doesn’t see how it can move forward without DRM and that the current system, even with downloads clearly pointing to increased music purchasing, is actually hurting the artists even more than the old system.
He did agree that this was not directly due to the P2P software, but instead due to the recording labels.
But he also said that he doesn’t really see a way for bands to successfully work out the process without the recording labels due to the way people get to the music. If a band is small and unknown, then they can bypass it all and make more money by using P2P to distribute music and therefore be heard more and get more people to their concerts. But that means going from making no money, to still basically making no money.
But once the band is in the middle or top tier, that stops working for them.
To become “big”, the artists require marketing, which costs too much for any single band to sustain on their own - hence they need the record label with the deep pockets to front that. But once you bring in the deep pockets, you get the deals with the devil and the artist loses out.
We had a fairly interesting discussion and the general feeling I got from it all was that artists are being lead directly toward being traded as a commodity and that their only value in the near future is of a side product, essentially a tool in advertising. That is largely what they have moved towards in the commercial music industry anyways, but the current trend is making that even larger.
He said that iTunes is great and he uses it, but Apple doesn’t make money off of it (they make money off of its increase in iPod sales and then the increased brand awareness and the fact that someone who buys an iPod frequently tends to go on and “Switch to Apple”). The musicians also don’t make money off of it - but the record companies do make money.
He noted that a lot of the issue stems from the fact that the recording industry made a move in the recent past to kill of the world of singles and instead make it so that the entire album would need to be purchased. This increased sales dramatically because you had to buy the bundle.
But now that bundle is destroyed by iTunes which breaks the bonds of the bundle and allows just the 3 good songs from the album to be purchased.
While this is very good for the consumer, it destroys their revenue model.
So again, we went back to “How can they make money.” off of the sale of individual songs and it comes back to:
1) the artists can’t make money (in terms of REAL money as opposed to a band that makes more than the zero it was making before) without the recording label
2) the recording label can’t make money on individual songs while people pirate - esp on the level of mass manufacture
While the DRM process can be bypassed, it still retains a point where everyone can make money - so he says that even though he has been thinking for years about what they can do, he still feels that DRM is the necessary evil.
He also said he feels that Apple has the ability to make it the “least painful” process as opposed to Microsoft who are “incompetent and only exacerbate the issue through frustrating the end user”.
This guy is not with a recording label, but is writes music for bands - currently focused on the country music industry (apparently that is where the most true musical talent these days is, hence his attraction to that as opposed to the crap that is pop music). He has been involved with an Emmy winning project and has been connected with many really cool projects. He is also, by all accounts, insanely smart.
He has a blog and also writes for OReilly.
I was actually going to write about that encounter at some point in my gay LJ, but I’m so lazy that I don’t know when I will get to that.
August 2nd, 2005 at 8:22 am
How about an entirely different model for musicians? Remember, it’s only been about the last 50 years or so that those guys got corrupted by the big money anyway.
Fuck the labels. The big ones at least. They’ll die and good riddence. Small labels will be nearly virtual — they will simply help the artist with their recording (and less and less help is needed, now that “home” recording is so good) and help the consumer vet the good bands. (I.e., labels like Kill Rock Stars will still find and sign good bands.)
But the music itself will be given away nearly at cost. No DRM is ever going to work, so the price will be naturally reduced to whatever level is sustainable (which I think is about at-cost).
So how will bands make money? Same way as always — sell it. But this time, they won’t be selling it through the labels to the consumers directly (they’ll be almost giving that away), but they will be selling it to commercial interests that want to have quality music. Advertisers, movies, television, video games, etc. (And they will be making more by their direct sales than through a label anyway. Plus, merchandise and other value-add offerings.)
If an artists music isn’t “commercial” enough to be bought by commercial ventures then those artists probably won’t be getting rich. Sort of like how software developers, poets, and volleyball players don’t get rich unless they have commercial appeal. It’s a tough world, but lets face it — most musicians make no money on their CD sales anyway. What percentage of artists recoup their costs to the label? 1%? 2%? So this new-and-improved model (which we’ll inevitably end up with, whether one agrees with my politics or not), doesn’t really change anything, except for taking the cream away from the labels, and maybe, hopefully, giving some of it back where it belongs.
August 2nd, 2005 at 10:37 am
Yeah, that was generally what we agreed on at dinner, was that if the artist doesn’t go through the label and does it themselves, then they will make money, but will be turned into a commodity and side product (advertising fodder really).
But if they don’t even have the money to get that exposure, then they need someone to back them, so they need to get a label, and the labels won’t survive without the DRM.
It was generally agreed though that the labels generally are the bad part of the equation and they need to be avoided - but that is easier said than done when you are a band with no money.
That is when I generally start to think that maybe one should stop being a band and move on to something that makes money.
Eventually that system too will grow to have its issues. If they want their music to get to the source where it has commercial value (to game developers, TV/movies/ads, phones, etc), then they either need to build their own distribution system, make use of one created for that purpose (which then quickly becomes a record label really, regardless of its delivery mechanism), or it moves in a way that the movie industry has with actors - you need an agent if you are going to get in front of the people who can bring in the money.
There is most certainly not a shortage of excellent musicians out there - but that isn’t what people want (when I say that, I mean the large percentage of the public - the MTV/VH1/radio crowd). If people wanted that, they would just go out and seek good music. What they want is a packaged product and they want to listen to what everyone else is listening to - they want to be part of the herd.
The masses are where the money is, and in order to reach them, you need a method to get in front of them.
While the lure of online publishing and viral marketing through blogs and P2P sounds excellent on paper, the general point of his argument is that while many have tried that route - all have failed on the large scale.
Someone that was making zero dollars playing for a few hundred people might have moved up to making thousands of dollars playing for a few thousand people - but nobody has yet started from nothing and become “known” through a grassroots effort using the web.
That doesn’t mean it just can’t happen - but it does point that the current efforts at it are failing.
One needs a TV show, a radio show, or something with large mass appeal in which to insert the idea to the masses that they should like XYZ because everyone else does.
To me, that is pathetic - but it is also where the money is.
August 2nd, 2005 at 11:13 am
“[..]. is also where the money is”
You make a number of salient points in that response — definitely food for thought.
One thing that gets me though is the money. I mean, who else makes tons money in this world? Stockbrokers? Entrepreneurs? Inventors? Real estate speculators? Shipping magnates? Publishing titans? Oil barons?
And then a few other oddballs — big name actors/movie producers, musicians, and sports heros.
We can all agree the first group makes tons of money off of the most basic principles of capitalism. I.e., they control a limited resource that other people want to possess.
That theory holds up for atheletes to a certain extent. But the “product” of the musician or screen actor can be reproduced with little cost. And increasingly, the product can be produced at little cost. So the product becomes commoditized. And the money evaporates.
So who doesn’t make a lot of money (on that scale)? Graphic designers, illustrators, poets, science fiction writers. Heck, chemical engineers, software engineers, botanists, doctors, lawyers, etc.
Why should your average very successful musician have a shot at making more money than your average very successful poet? The answer may be that they shouldn’t.
I’d love to see competent musicians do well and be able to support their families. Their jobs are harder than mine. But should they be able to “live like rock stars?” Own airplanes and numerous homes? Really?
If we’re arguing about a base level of success — then I totally agree we need to find a way for more working musicians to achieve that goal. But the record industry never did that in the first place. The industry tried to make superstars, not a good honest living. So it’s not any worse today than it was 25 years ago. Perhaps it is even better — if the new paradigm chops the head off the top of the pyramid, then maybe, just maybe, there will be more spilling down the sides.
August 2nd, 2005 at 11:30 am
I should have noted that I wasn’t trying to make an argument against what you were saying - I actually 100% agree with you and am very anti-record company and anti-DRM (although the DRM doesn’t really bother me since I know there are ways around any implementation, I would still rather not bother). In my mind, up until the conversation with Spencer, I pretty much figured that things would have to move towards the way you are suggesting.
But I respect Spencer’s opinion and was merely trying to add in an additional viewpoint from someone (him) who has spent many waking hours on just this sort of thing. He also gave me a new perspective on it, from someone in a difference place and a closer relationship (I am merely an end user and nothing else - he exists on several planes - one of which is an end user, and many of which are closer to the actual musician - and used to be a struggling artist). After hearing what he had to say and then rethinking my own views, I think it made me even more jaded towards it all.
In the end, it is going to be wrestling with greed as to what directs the system. There is the greed of us end users who want an easy system with quality music products to access, at as low a cost as possible and with open uses (this is the “Greed is Good” side if you ask me). But then there is the greed of the people who previously made money off of this who want to retain their way of making money - that doesn’t mean that they should, but the greed is still persistent and with deep pockets and the influence that creates, they are going to be able to move things in their favor (that would be the “Greed is Bad” side since it is hindering, purposely, innovation). Technically the collective deep pockets of the masses should be able to influence it even more so, since they are the ones controlling the money flow to the current established system - BUT - that assumes that the average person is not a crowd following idiot (I mean idiot in this sense not as someone stupid, but just in someone unwilling to think).
That is a major flaw in the system. In order to overthrow the existing system, people will need to be educated that not only is there a better way, there should be a better way. But “people” (meaning the masses) don’t want to be educated. They don’t want to have to think. They want to be told what to do.
It clashes with the way I live my life, and the way that every single person I know lives their life.
BUT - even if I know 5K people, that is still a drop in the bucket compared to the masses who just want to follow the crowd - TV told them that Jessica Simpson’s sister is a good singer and that some new movie about rap in the ‘hood is cool - therefore it is now cool.
And that crowd is where the money is.
So the issue becomes two pronged - can you work a system that benefits both the artists and the end users AND can you also make this system so that it is a transparent replacement to the existing system so that the end users don’t know and/or don’t care that the system has been replaced.
To me, that is where this issue gets complicated. Pointing out the flaws in the system and where it *should* move is one thing - but overcoming the huge inertia due to the existing money being made as it stands now is going to be interesting and very hard.
One of the ways which has a shot at it is if another body comes in with equal or larger amounts of money and displaces the existing system - but if it were that easy, we would see more turnover in the recording industry (as in the top level companies) than there is even today.
August 2nd, 2005 at 12:23 pm
What a fascinating take on it — and one that I admit I haven’t considered nearly enough. I’m glad you point it out, though. It’s just too bad it is buried in the comments on this little site…
You write that:
It looks like it definitely is moving, though not where you say it perhaps should….
August 3rd, 2005 at 5:37 am
LOL - “fascinating take” is so much more polite than “crazy ramblings” - thank you :)
But what else is the web for if not letting the crazy people rant away via their keyboards?
I agree, it is definitely moving right now, but at this point I am not convinced that it is moving away from existing record label structures and/or another similar body that would equally exploit the system.
I keep thinking about how instead of record labels loaning the money and then producing/manufacturing/advertising/etc, it should instead be a company which controls the popular media content - so if they have a popular TV show they can mention the music in there (or play it in the background), or they could use it in ads, or they could put it in their movies.
But then I smack myself in the face so as to wake up and remember that is pretty much what all of the “record labels” have evolved into (the Viacom monster comes immediately to mind).
Spencer reminded me that the internet was a thrilling possibility for many artists because of the idea of bypassing traditional distribution outlets and just getting the music directly to the people. Again, this does work and has been shown to work - on a small scale - going from a 100 person concert to a 1000 person concert. But larger than that it fails.
The reason it fails is that word of mouth, while a great system, is still not as good as telling a huge audience that they aren’t cool if they don’t like ABC or XYZ. That is where MTV comes in, playing the same 3 videos over and over until people go through the stages of acceptance, eventually grow sick of it, and the next group is exploited.
Currently the record labels provide a very limited service for the industry - they back artists with money (that goes towards many sub-services if you want to quantify it further) AND they weed out the “good” artists from all of the crap.
The problem with that, at least IMO, is that “good” in this sense is 100% a marketing term - not a subjective “I enjoy this music” sort of term. “Good” is a sound/look/image/idea that will make the more money than a “bad” idea.
As a result, instead of getting good new art into our world, we get rehashes of the same crap over and over.
Occasionally something breaks through this and we get something new - but even that is more controlled than it should be (all of these things are cyclical - which someone observed and now they try to “predict” what the next stage in the cycle will be, but as a result they have an idea of what they should be producing and pushing - and therefore fulfill their prophecy).
What would be very interesting is to have a media outlet which included web/TV/movies/airwaves that would be a central repository for content. Artists in any media outlet could submit their content for free and it would be sold with profits divided in some pre-agreed on manner (so far, that is essentially what the current media beasts do).
BUT, instead of having some man or woman in a suit, who is supposedly tuned into a target demographic deciding on 10 artists to pull out of a pool of 100K, just give us access to all 100K. Let us, the end users, decide what we like and what we want more of - give us a way to rank/value the content. Either through an Amazon style rating system, or merely through the fact that if someone pays money to download it, then it is inherently worth more than that which we don’t pay for (although you could also argue things that are previewed more than others also have more value because they are currently part of some word-of-mouth-buzz - although that could be the amusing human nature trait of “hey, this is AWFUL, you should hear/taste/see it”).
Then from there, the people who want to hear new things have full access to it and can enjoy something different. And then for the larger number of people who would rather just follow the crowd, having their decisions made for them, they can just be shown lists of what is most popular right now - something like Audioscrobbler for music, or wrap a similar system around movies, TV shows, books, etc.
I suppose that is the ideal of the P2P systems - that would be the conduit for such a system - but in that system, you can’t distribute it for free since there are the costs of running the system and making the music which need to be covered.
That system would require “the masses” to have access to it, which - if you assumed that would require access from home - would require more people to be online. Fortunately that number is increasing everyday - so perhaps eventually something like that would be more possible.
As it stands right now, there are many groups who have attempted things like that, but they can’t overcome the inertia of the existing system resisting change.
Anyway, I just keep on rambling, in a jaded way - perhaps for the change to actually happen, it needs someone immune to becoming embittered by that system and instead someone so optimistic that their contagious dream makes it feasible to overcome that existing inertia.
If that person is out there, I wish them luck.