Boy, suing 12-year-olds sure was a great move for the RIAA, if by "great move" one means "great way to draw attention to their misleading claims and outdated business model". Let's take a look at some of the varied and interesting commentary I've come across recently.
First, there's this Motley Fool article, which not only attacks the RIAA's sue-'em strategy and its reluctance to find a way to monetize file sharing, but points out what a tangled web our media conglomeration is:
Earlier this week, the picture of a 12-year-old New York honors student accused of unauthorized downloading sprees was a fixture on the America Online log-in page. It evoked an outcry of overwhelming public support for the young girl. Facing the first of many public relations nightmares in this fight, the RIAA scrambled to save face by quickly settling with the pre-teen's mother for $2,000.It's easy to see why America Online threw gas on this incendiary topic. Challenged by stagnant subscriber growth, the Internet specialist is trying to juice revenues by upselling members into costlier high-speed connections. Why would folks pay the company roughly twice as much for its AOL for Broadband service? Clearly, downloading MP3s -- illegal ones, in most cases -- is the killer app driving DSL and cable modem growth. Sure, America Online would rather pitch legal alternatives, and it's clearly marketing the upgrade around its exclusive broadband content, but who are they trying to kid? The need for speed is almost exclusively driven by the demand for faster peer-to-peer file-sharing exchanges.
But here's the kicker: America Online, despite serving as a high-speed hub of P2P commiseration, is part of the same AOL Time Warner (NYSE: AOL) media giant that owns Warner Music, one of the five major record labels. It's a conflict of interest that became notoriously transparent when the RIAA's list of 261 violators reportedly didn't include a single AOL subscriber.
So as the names trickle in (including the likes of a repentant Yale professor and a 71-year-old man who claims he was unaware that his visiting grandchildren were loading up on song files), one has to wonder how differently this all would have played out if they had signed up with America Online -- or if Verizon (NYSE: VZ) owned a record label.
How do the big-label artists themselves feel about the RIAA's efforts, which are supposedly on their behalf? Well, given that many of them see precious little in the way of royalties from their labels, it's not surprising that they're pretty darned ambivalent about it.
"On one hand, the whole thing is pretty sick," said John McCrea, a singer and songwriter in the rock band Cake. "On the other hand, I think it'll probably work."Many musicians privately wish file sharing would go away, though they are reluctant to admit it, because they do not want to seem unfriendly to their fans. So they have been happy to have the industry group play the role of bad cop. But with the escalation of the battle last week (with lawsuits filed against, among others, a 71-year-old grandfather and a 12-year-old girl), some musicians say they are beginning to wonder if the actions being taken in their name are a little extreme.This is especially true because, regardless of file sharing, they rarely see royalties.
"It would be nice if record companies would include artists on these decisions," said Deborah Harry of Blondie, adding that when a grandfather is sued because, unbeknownst to him, his grandchildren are downloading songs on his computer, "it's embarrassing."
The artist Moby, on his Web site, offered a similar opinion, suggesting that the music companies treat users of file-sharing services like fans instead of criminals. "How can a 14-year-old who has an allowance of $5 a week feel bad about downloading music produced by multimillionaire musicians and greedy record companies," he wrote. "The record companies should approach that 14-year-old and say: 'Hey, it's great that you love music. Instead of downloading music for free, why don't you try this very inexpensive service that will enable you to listen to a lot of music and also have access to unreleased tracks and ticket discounts and free merchandise?' "
Profits are up - in some cases by 50 to 100 percent. That's in contrast to overall album sales, which dropped about 11 percent in 2002."We don't do too much crying over here," Cameron Strang, founder of New West Records, admits proudly. The home of artists like Delbert McClinton, the Flatlanders, and John Hiatt has doubled its business for the past three years and is projecting a $10 million income in 2003.
Paul Foley, general manager of the biggest independent label, Rounder Records of Cambridge, Mass., happily brags, "2002 was actually Rounder's best year in history. We were up 50 percent over 2001."
I've been thinking about this since I first came across all of these articles, and I've decided that it's not necessarily the high cost of a CD that keeps me from buying more of them. Oh, I'd buy more if they were cheaper, but not because I've got a CD-or-food decision to make in my monthly budget. It's because I'm reluctant to shell out $15-$20 on an unknown. As I've noted before, I hardly ever hear anything new to me on the radio. I don't have a lot of spare time to poke around various download sites. Most music I listen to these days is groups I see live in town and from recommendations from other folks. $15 is a price I'm perfectly happy to pay to a group I know I like, or whom I have a reasonable expectation of liking, especially when I know the performers themselves will get a fair cut of that money.
How should the music industry restructure itself if it wants to pry a few more of my discretionary dollars out of my hands? I'm glad you asked.
1. Give me some decent radio options so I can easily hear new music that I might like. I do most of my music-listening in the car, and I've been burning a hole in my CD collection because I just can't abide Houston's godawful radio scene any more. I'm starting to get tempted by Sirius and XM, despite my allergy to their monthly fees, just so I can get some variety.
2. Give me a service that makes recommendations based on stuff I already like, and gives me a few samples so I can make an informed decision. I'm thinking something along the lines of the Book of the Month Club, where for a reasonable monthly fee I get a regular email with information about new music that might truly interest me, along with links to a page with downloads to try out, plus of course links to buy or burn stuff that really gets my attention. I have more money than I do time, so if you give me something easy, convenient, and attuned to my tastes, I'll pay a premium in return. From a business perspective, what could be better than a subscription service? It's a win-win.
3. Give me some reasonable assurance that the money I'm spending goes to the artists and not some anonymous suits in New York, LA, or Nashville. We all know that CDs themselves are cheap. Most of us, I think, harbor a lingering and quite reasonable suspicion that most of that $15-$20 we're shelling out is going to overhead. Why should I support that?
I don't think any of that is unreasonable, nor does it depend on radically altering the current business landscape or depend on micropayments. It seems to me that if the big labels would make an effort to understand why their model is failing and make some adjustments instead of lobbying for what is essentially protectionist legislation, they could rebound and be better off than they were before. Every other successful business has had to adapt to changing times and changing realities. I don't see why the recording industry should expect a pass.
Posted by Charles Kuffner on September 16, 2003 to Music | TrackBackSounds to me like you're describing Amazon's recommendation system in item #2. That's OK, as long as you're willing to laugh when you get picks that don't fit. I have a very broad collection of both books and music, so I get some really off-the-wall suggestions.
Posted by: Linkmeister on September 16, 2003 8:16 PMYeah, something like that, though I'd want a system that asked for input first rather than basing recommendations on a limited number of prior purchases or page views. There are web pages out there already that recommend movies and music based on your own input - I'm just talking about a way for a company with a good catalog and distribution system to capitalize on it.
Allowing some number of samples to be downloaded as demos ought to help weed out some of the wackier choices, though of course anything can happen.
Posted by: Charles Kuffner on September 16, 2003 8:55 PMYou know, one of the best things about online "radio" is that a lot of the streams have an attached web page that tells you what you're listening to in real time.
Contrast this with broadcast radio, where you're lucky to find out the name of the song and/or artist one time in five. What are these people thinking?
Posted by: Patrick Nielsen Hayden on September 16, 2003 9:03 PMActually, the Yahoo LaunchCast service is pretty good at doing what you want. You can set your preferences by genre, and as it plays songs for you, you can further "rate" by song, artist, and album, which improves the "new" selections it serves you. I've discovered some new stuff that I like that way -- about the only way I discover new music outside of the alt-country stuff that I'm more plugged in to.
Of course, that doesn't help you in the car very much.
Posted by: kevin whited on September 16, 2003 9:17 PMDamn straight, Patrick. I can't tell you how many DJs' ancestors I've cursed over the lack of information about a just-played song.
Kevin, I'm in a cubicle at work, so I'm pretty hesitant to stream audio through the computer there - too much noise as it is. But maybe I need to try this at home on occasion. Thanks for the tip!
Posted by: Charles Kuffner on September 16, 2003 10:17 PMThere are many issues here, but I think the primary one is not the technology one or even the legal one; the primary one is: how do we publicize and compensate excellent musicians? I call for a voluntary payment system , but actually anything is better than selling CD's.
Recommendations are important; where do you find out about musicians? The Houston Chronicle has a good section on emerging Houston musicians with free mp3's . I've also been happy with gods of music for recommendations as well as some Houston weblogs (such as publius , houston calling and my own share the music weblog ).
Speaking of radio, I recently did an interview with a New Zealand developer who created iRATE radio. iRATE downloads random mp3's onto your hard drive and adjusts what it gives you on the basis of your ratings. Cool!
Posted by: Robert Nagle on September 17, 2003 12:00 PMLet me start by admitting my biases. I'm a published musician who has not made a lot of money off of the music industry, but who has friends who are at least moderately successful at more than getting their next meal off their music, and who has at times made my living by playing. I am anti-sharing in most ways, though I hate the RIAA as only someone who has seen the disgustingly small royalty checks that over 90% of signed acts receive can hate them. Just a full public disclosure...
First, Chuck, I'm a BIG fan of Rhapsody radio for home, though it doesn't help in the car. I create radio stations based on up to 10 artists. It finds stuff in the catalog from them and "related artists". I have 4 stations that I like enought that I'm using the outputs on my recording card to go into my stereo, and it's on almost any time I'm home. The quality is better than FM radio (~60-120 kbps MP3), and I'm constantly finding artists I didn't know enough about. It even offers a $.99 per song burning option, though I don't subscribe to that part. Most important to me, the artists get paid when they're played, just like radio.
However, you wrote:
"3. Give me some reasonable assurance that the money I'm spending goes to the artists and not some anonymous suits in New York, LA, or Nashville. We all know that CDs themselves are cheap. Most of us, I think, harbor a lingering and quite reasonable suspicion that most of that $15-$20 we're shelling out is going to overhead. Why should I support that?"
The reason you need to support it is the other things you want. Look, a record company does two things. First, it screens out the bad from the good. I may disagree with their taste (it is unfair that John Fahey died penniless while Britany Spears drives a mercedes), but most of what I hear from artists without a contract is awful. They screen out some of the awful. At least, it screens out the completely incompetent. If you don't believe that most musicians (myself included) are completely incompetent, hang out at a recording studio where people are paying to record demos for a day or two. I'll pay the suits a LOT to listen to and filter that so that I don't have to.
The second thing the industry does is put talent together with producers and make sure something comes out. In my case, that meant working with one of my idols on my jazz band's second record. For others, it means hooking them up with producers or writers they might otherwise not have worked with. We all marvel, and deservedly so, at Johnny Cash's brilliant covers of Soundgarden, U2 and NIN, but it's a label that finds a producer who helps him make this work.
The problem with both of these things is that they cost a lot, and more for those bands that I love that will never get the popular acclaim. Leo Kottke (one of my idols) estimates that in all of his years making music, he has probably paid back about half of what it has cost his labels to produce him. And he's simple, with himself and a couple of other people playing with him. A month of studio time costs, and putting together a record in a month is fast.
And the studios foot the bill. The reason artists never get paid is because they then "charge back" for that bill. Except for the big artists, we'll never pay them back. So Britany and Christina and Justin, J.Lo and Eminem and yes, even Bruce Springsteen all subsidize the other acts you're interested in. But without those stars, the little music never comes out and we're all poorer.
It doesn't have to be as awful as it is. Courtney Love has a great article at Salon from a few years back about how nobody gets paid. And radio sucks the life out of music while Michael Powell chears on Clear Channel. But to the extent that the Austin Lounge Lizards don't have day jobs, and that the clubs continue to work, the labels are keeping things going.
And when i get my annual royalty check in December (we're long since out of print, but the periodic jazz radio show playing our song gets me about $20 a year), I'll hoist a beer and say thank you to this year's model. And I'll be part of the overhead you mentioned. So I'll drink to you, too.
Posted by: Ron Zucker on September 17, 2003 1:09 PMLet me start by admitting my biases. I'm a published musician who has not made a lot of money off of the music industry, but who has friends who are at least moderately successful at more than getting their next meal off their music, and who has at times made my living by playing. I am anti-sharing in most ways, though I hate the RIAA as only someone who has seen the disgustingly small royalty checks that over 90% of signed acts receive can hate them. Just a full public disclosure...
First, Chuck, I'm a BIG fan of Rhapsody radio for home, though it doesn't help in the car. I create radio stations based on up to 10 artists. It finds stuff in the catalog from them and "related artists". I have 4 stations that I like enought that I'm using the outputs on my recording card to go into my stereo, and it's on almost any time I'm home. The quality is better than FM radio (~60-120 kbps MP3), and I'm constantly finding artists I didn't know enough about. It even offers a $.99 per song burning option, though I don't subscribe to that part. Most important to me, the artists get paid when they're played, just like radio.
However, you wrote:
"3. Give me some reasonable assurance that the money I'm spending goes to the artists and not some anonymous suits in New York, LA, or Nashville. We all know that CDs themselves are cheap. Most of us, I think, harbor a lingering and quite reasonable suspicion that most of that $15-$20 we're shelling out is going to overhead. Why should I support that?"
The reason you need to support it is the other things you want. Look, a record company does two things. First, it screens out the bad from the good. I may disagree with their taste (it is unfair that John Fahey died penniless while Britany Spears drives a mercedes), but most of what I hear from artists without a contract is awful. They screen out some of the awful. At least, it screens out the completely incompetent. If you don't believe that most musicians (myself included) are completely incompetent, hang out at a recording studio where people are paying to record demos for a day or two. I'll pay the suits a LOT to listen to and filter that so that I don't have to.
The second thing the industry does is put talent together with producers and make sure something comes out. In my case, that meant working with one of my idols on my jazz band's second record. For others, it means hooking them up with producers or writers they might otherwise not have worked with. We all marvel, and deservedly so, at Johnny Cash's brilliant covers of Soundgarden, U2 and NIN, but it's a label that finds a producer who helps him make this work.
The problem with both of these things is that they cost a lot, and more for those bands that I love that will never get the popular acclaim. Leo Kottke (one of my idols) estimates that in all of his years making music, he has probably paid back about half of what it has cost his labels to produce him. And he's simple, with himself and a couple of other people playing with him. A month of studio time costs, and putting together a record in a month is fast.
And the studios foot the bill. The reason artists never get paid is because they then "charge back" for that bill. Except for the big artists, we'll never pay them back. So Britany and Christina and Justin, J.Lo and Eminem and yes, even Bruce Springsteen all subsidize the other acts you're interested in. But without those stars, the little music never comes out and we're all poorer.
It doesn't have to be as awful as it is. Courtney Love has a great article at Salon from a few years back about how nobody gets paid. And radio sucks the life out of music while Michael Powell chears on Clear Channel. But to the extent that the Austin Lounge Lizards don't have day jobs, and that the clubs continue to work, the labels are keeping things going.
And when i get my annual royalty check in December (we're long since out of print, but the periodic jazz radio show playing our song gets me about $20 a year), I'll hoist a beer and say thank you to this year's model. And I'll be part of the overhead you mentioned. So I'll drink to you, too.
Posted by: Ron Zucker on September 17, 2003 1:09 PMI'm not convinced that production costs are necessarily as high as all that. Michael would be the expert on engineering costs, but I've seen some of the equipment Joe Linbeck has, and I'm impressed with what Joe's equipment can do for the money.
Just because the major labels have traditionally served a brokering and/or filtering function doesn't mean that they always will, or that that's the best or only way to manage those functions. Sometimes you get something great out of major labels; sometimes you get crap. I'm not willing to assume that either is solely because of the major labels.
Posted by: Ginger on September 17, 2003 1:23 PMBobby (can I still call you Bobby?) - thanks for all the links. I will check them out.
Ron - Thanks for the perspective and the Rhapsody recommendation. Why is it that the labels depend on blockbusters to subsidize the moneylosers? Wouldn't they be better served going after more mid-level successes? And if this is their model, couldn't it be argued that their recent drop in sales (especially when compared to the uptick that indies are experiencing) is an indication that they're doing a worse job in identifying breakout stars?
I guess it still seems to me that the majors are responding to adverse conditions by doing anything they can to avoid examining whether their current model is a successful one.
(Oh, and you're welcome for the beer. :-)
Posted by: Charles Kuffner on September 17, 2003 2:02 PMEMusic is my current solution for my 2 hour daily commute. I have an MP3-CD car stereo, so I just download 10 albums that look interesting and burn them to a CD - takes maybe 30 minutes, all told - and I'm set for the week as long as I average at least 1 listen per album.
They claim to "split all of the profits from membership fees 50/50 with the label or artist." I can't speak to the "artists get paid" math beyond that.
My musical tastes are fairly forgiving and all over the spectrum, though, so I'm pretty much EMusic's ideal customer. People who just like (say) jazz won't be as well off.
They don't do a good job at all of solving the recommendation issue, but that's a very hard problem, and they do try. Personally, I like to just pick one of their absurdly arbitrary genres and grab a few of the "editor's picks" from the listing. It's working so far.
Posted by: kodi on September 17, 2003 2:49 PM