Trying something a little new this week… a video blog.
I hear a lot of people say we need to “save the music” by preserving the old business models of the music industry. “If there are less career opportunities for musicians,” they argue, “surely there will be less good music.” I call shenanigans on this short-sighted perspective. There is more music than ever before, and a new breed of musician is being born, blurring the lines between creator and consumer. Bring on the new thing.
If you believe that the purpose of copyright is to compensate the creator of the content, that copyright is free market capitalism at work, or that the current copyright legal regime leads to the greatest innovation and productivity, there’s a recently released report you need to read.
Notice the letterhead? Yeah, that memo came from the Republican Study Committee, which helps set policy for congressional Republican leaders. Keep in mind that even Democrats, most of whom at least half-heartedly support net neutrality, have never come this close to the outright rejection of the current copyright paradigm. The document at hand represents the most forward-thinking copyright policy ever presented at this upper echelon of government.
You can guess what happened next. Once the RIAA and MPAA got wind of the brief, they hit the phones hard and browbeat Republicans into issuing a full retraction of the too-sensible-to-be-true copyright policy memo. The Republican organization claims that this retraction was due to poor oversight, which is hard to believe since it wouldn’t have been released without plenty of oversight. We can plainly see the exact reason for the retraction is because the report is the antithesis of the RIAA and MPAA’s corrupt stance on copyright, and they went ballistic. It must be stressful working at an organizations that survives by perpetuating the kind of copyright myths that are so clearly debunked in the Republican Study Committee’s report. In that sense, the RIAA (and MPAA, but we’ll focus on the former) are mythical beasts that need to be slain for the greater good. Specifically:
1) The RIAA hides behind the myth that copyright is meant to compensate the artist, playing to our natural desire to compensate the creators for their works. Their #1 claim when protecting obscene exploitation of artists is hypocritically that they’re protecting the artist’s ability to make money. Never mind the wealth generated by these works is concentrated in corporate coffers, not the pockets of musicians whom they ruthlessly exploit, turning copyright around to victimize rather than enable artists. Modern music fans know that they’re not usually supporting the artist when they pay for access to music, because musicians are not the gatekeepers of access. Of course, musicians want to be heard more passionately than they want to be paid, and would prefer to keep their own gates, thank you. Fortunately, technology is changing in favor of the greater good, and one day not to far from now, the RIAA will be revealed for its true nature: As antiquated as the KKK.
2) As the report points out, “Copyright violates nearly every tenet of laissez faire capitalism” by entitling content producers “to a guaranteed, government instituted, government subsided content-monopoly.” Now, that wouldn’t be half as bad if that entitlement was actually due to musicians — of course, that is not so. Nearly every musician who has made a living recording music first had to sign over their entitled rights to be exploited by a third party. When you see that copyright protects corporate interests much like other questionable government subsidies that were originally meant to protect the average Joe, you see copyright needs to go, along with the RIAA.
3) The third myth in the report relates to the stifling of innovation by copyright, which was well-documented earlier this year in the research paper Copyright and Innovation: The Untold Story. In it, Michael A. Carrier of Rutgers University School of Law presents his findings from numerous in-depth interviews with business leaders from the past decade of digital music. His damning critique confirms what anyone in the digital music business knows anecdotally: the RIAA and its cronies, wielding copyright, have all but scorched the earth of innovation in the digital music industry. The RSC’s redacted copyright report supports Carrier’s conclusion, noting that our current corrupt copyright laws “Retarded the creation of a robust DJ/Remix industry” of the kind you see in many other countries — ever more depressing when you realize the US is used to being on the cutting edge of many new music movements.
It’s crystal clear to anyone studying the state of music that the RIAA has had a net negative effect on nearly every aspect — one might expect them to ruin music’s expressiveness and aesthetics in pursuit of profit, but they’ve really ruined the business they’re sworn to protect as well. I hope that folks working in cahoots with RIAA read this blog post and take this RSC report as a sliver of light shining through the exit door. Are you the head of a hydra hell-bent on destroying music, the biotechnology of group formation? Do you really think perpetuating copyright myths is helping musicians?
We can either face the truth and change for the better, or repeat the past and risk damaging music’s cultural, social and personal significants even further. Music will survive the crushing limitations of copyright, but those at the RIAA who are betting their gatekeeper position is sustainable have another thing coming.
Since Napster was sued out of existence in 2001, the record industry has ruined digital music time and time again. The result has been to stifle innovation and creativity as the industry dug its own grave with respect to consumer support. We will never really know just how much music and culture suffered from their corruption, ineptitude and negligence. But now we can get a rough idea.
Anyone in the digital music world knows that record labels continue to sue competitors out of existence rather than negotiating a settlement and moving forward progressively (Grooveshark being the most recent example). Until now, this knowledge has been intuitive. But a new groundbreaking study by Rutgers law professor Michael A. Carrier offers stunning admissions by the world’s top music executives that they have been destroying digital music for a decade. Carrier is blowing the whistle loud to expose the culture-crushing tactics of a record industry hell-bent on saving its dying revenue streams. What’s incredible is how many of these smoking-gun admissions of the record industry’s practice of destroying music through litigation and intimidation continue to this day.
For the study, Carrier interviewed and anonymously quoted CEOs and VPs of major music and technology companies. All the major labels and nearly every digital music service worth mentioning from the days of Napster are represented here, with 31 top-ranking officers included as sources for the report. Even the infamous Hilary Rosen of the Napster-era RIAA makes an appearance. The 63 pages of the report are full of juicy, candid admissions that will make your jaw drop and the whole report is worth a read, but here are a few highlights:
• The labels shut Napster down just as filtering technology was being developed to weed out copyright infringing files and/or pay rights holders for use of their content — the same kind of software being developed and used now at YouTube. Had the labels continued to develop this filtering technology, it would be much more efficient and effective today at preventing copyright infringement. Worse, by banning p2p technology, labels just pushed the technology underground and it developed in a way to make it harder to apply such filters.
• The labels were very aware that tying a great single to a lackluster album of songs was akin to “selling 1 pound of shit in a 10 pound bag” and that one of Napster’s biggest lasting effects was to destroy the idea of bundling music in albums. However, they chose to ignore this sea change in music consumption because it ran directly counter to their business model. That the album was not sunsetted for the single continues to be pure willful ignorance.
• In the face of digital music, the labels used litigation as their primary business model. Their attitude was that they were not going to license their content to anyone. This strategy, akin to “not negotiating with terrorists”, (indeed file sharers were labeled as “pirates”) meant that no “legitimate” digital music service would emerge until the iTunes store. Steve Jobs made it happen through personal connections, and the labels basically handed the digital download industry over to Apple’s “walled garden” media ecosystem. Prior to that, the iPod drove the demand for music file sharing through the roof. By not negotiating with digital music services, the industry encouraged the “underground” to flourish an eventually empowered Apple to unseat the music retailers. By the time “legitimate” means of acquiring music emerged, the consumer base was already well used to free, unfettered access to music.
• The CD retail shops basically committed suicide. They were complicit in the labels’ litigious fight against digital music innovators. The labels saw the retailers as their customers, not the listeners themselves. After all, the retailers bought 90% of record industry products. Because the labels would allow no viable digital music alternative, an entire generation learned to consume digital music without industry consent. As a result, retailers essentially evaporated when the industry finally began throwing its weight behind the sanctioned digital music retailers as mentioned above.
• Much of the industry’s irrational behavior can be explained by the “Innovator’s Dilemma”, a somewhat obvious idea that large corporations are dis-incentivized to pursue new innovations that threaten existing business models. Just to demonstrate how out-of-whack executives were with reality, here’s an excerpt from the study:
…before iTunes offered 99-cent singles, one label was “adamant” that “the single should be priced at $3.25.” The reason was that if customers bought “two or three,” then they would “make up lost sales on the album by the sale of singles.” The respondents reaction was: “You’re out of your mind” since “people aren’t going to pay $3.25 for a single.”
• The business structure of the record labels was set up for short-term success in deference of any long-term thinking. Political power struggles were common. In short, the bureaucracy of these labels, themselves consolidated into larger corporate bureaucracies, lacked the ability to innovate in the first place. The result was that litigation was the only way to sustain the business model. Technology startups simply could not go on functioning with the massive legal costs associated with defending a record label lawsuit, especially when all the labels ganged up on one company as they often did (and still do).
• We all know that the RIAA terrorized consumers with lawsuits alleging personal infringement of copyright (remember, retailers were the labels’ customers, not the public, so why should they care about offending the public?). What many don’t realize is how CEOs of tech companies were terrorized with the same allegations of personal infringement in addition to having their companies sued out of existence. Additionally, because of the obscene statutory fines associated with willful copyright infringement, this created ridiculous situations, such as Limewire being sued for statutory damages of $75 trillion, which is more that the GDP of the entire world.
• The litigious affront by labels had a real negative impact on the economy. As it sued digital music services out of existence, venture capital for any new project was hard to come by. This created a chilling effect around digital music services that persists to this day. It’s hard to convince investors to support a project when in the past they have been personally sued for willful copyright infringement simply for investing in a digital music product. Today we have very few compelling digital music services as a direct result of the industry’s approach to using litigation as a business model.
• The report does more than dispel myths about “piracy”, it clearly shows the record industry is to blame for not only its own downfall, but the downfall of music itself. The loss of innovation and venture capital was certainly a blow to society at large, but the effect of this corrupt crusade on the music itself was equally tragic. Though hard to quantify, some of the “magic of music” as it were has been lost, or at the very least transformed irrevocably by the willful negligence of the music industry. Not mentioned directly in the report is the mountains of money denied to musicians themselves, the ultimate enablers of the industry who so often get screwed by it. Fortunately, all this chaos has spurred the public to adopt radical new business models — patronage and crowd funding chief among them — and we are finally starting to “bounce back” from the damage record labels have inflicted on the culture and economy of music.
It has never been more clear that despite bringing music to millions of people across the globe, the record industry has had a net negative effect on music, particularly in the last decade. This being one of the central theses of my upcoming book, I have overjoyed to have this report as a smoking gun source for what anyone in the digital music world knows intuitively to be true. Read the report to see what I mean.
Note: This was posted as a response to David Lowery’s Letter to Emily White, which was in response to her article “I Never Owned Any Music to Begin With”. White is an intern at NPR’s All Songs Considered, Lowery is a contributor for The Trichordist, a technology and ethics blog.
As a musician and huge music fan, your emotional plea for our generation to renounce Free Culture so that musicians can make a living was indeed stirring. But beyond the choir you’re preaching to, we both know it’s falling on deaf ears. Asking today’s music consumers to kindly start paying for recorded music again because it’s the ethical thing to do isn’t only unviable — it’s not the ethical thing to do anymore. Free Culture is an ethic, and I think I can speak for my generation when I say we believe it to be the high ground over the way the music industry used to be run.
Your heart is clearly in the right place. But unlike you, I think most of us, our generation included, have a deep, unwavering motivation to compensate the musicians who enrich our lives. Here’s the crux of our disagreement: You claim listeners aren’t paying as much for access to music anymore because they’re unethical and no longer find it important to compensate artists. You and many others make this accusation over and over again without providing any clear evidence other than unconvincing anecdotes.
I believe the opposite can be clearly proven: Today’s musicians are held in higher esteem by listeners than ever before, and it’s the industry that has lost their respect (and money), due to a history of unethical behavior. The first point is proven by the sheer unprecedented volume of music now being consumed. The latter point is proven by even a casual glance into the history of the music industry.
Should listeners feel guilty for having free access to music? Of course not. It’s the best thing ever to happen to a music lover. Sometimes I wonder if all the Free Culture-haters are just jealous that they had to pay $20 per CD. You realize that price point had nothing to do with compensating artists, right? That ridiculous number was the product of illegal price fixing, obscene recoupments, payola, unethical ‘breakage’ fees and keeping statutory royalty rates for artists low, to name just a few reasons. Meanwhile, our generation experiences the ecstasy of free or near-free access to the global jukebox.
Should musicians feel threatened by listeners accessing their music for free? Only if their entire business model is based on forcing their fans (and potential fans) to pay for access to music. This is a model that our generation is using technology to reject. The exposure granted by free access to music is exactly what most musicians are after. Free exposure is only a lost profit opportunity for the minority of musicians who succeeded in the pre-digital record business paradigm. Most of the time musicians didn’t profit beyond statutory royalties anyway, because they could never recoup the cost of marketing and advertising. Now good music goes viral for free, and even generates ad revenue for the creator!
I’m going to level with you. You and many other Free Culture detractors are people from social circles with musicians that did well in the past but whose revenue dropped dramatically along with industry profits. I think the driver behind this blithely unrealistic “let’s go back to the way things were in the 90s” movement is pretty straightforward — you tasted profits from a business model that is no longer sustainable. You want your industry back.
We don’t.
Consider for a moment how were the profits of the “old” music industry won: By subjecting listeners and musicians — and indeed, our very culture — to a laundry list of horrendous commercial exploitation. Price fixing, payola, unpaid royalties, market monopolies, ticket surcharges, obscenely exploitative record contracts, manufactured popularity, censorship, perpetual copyright and destruction of fair use and the public domain… the list goes on and on. In short, the old way of doing things sucked and we don’t care if a few of that era’s successful artists no longer get mailbox money for music they recorded decades ago. We certainly don’t care if the record industry, which enabled these injustices, dies a slow, public death.
On the other side of the Free Culture argument, you have people like me: unsuccessful musicians and frustrated music fans. We are by far the majority, but our apathy is high. Critically, this does not translate into consumer apathy for compensating musicians. Quite the contrary, our apathy for corporations is driving a new appreciation for the original creators and producers of music, based on free access to recordings.
I believe my story is somewhat typical of the unsuccessful musician. After years of false starts and bad management I finally “made it” and got signed to an emerging indie. The advance was small, the recoupment high. But we had a great booking agent, nationwide tour support and opened for big bands in NYC. We got a sync license with MTV and some film placements. We had a high-powered manager and one of Britney Spears’s lawyers. Our friends were signed to Capitol, Sony began showing interest in us. We were on the cusp of making a living playing music. But while our fan base was rabid and widespread, it just wasn’t big enough. It wasn’t just a matter of “exposure” as most musicians whine. The business of the band didn’t scale, and eventually petered out. While I never quit playing music or trying to make a business of it, music became more of a hobby and I was now among the vast ranks of unsuccessful musicians.
Guess who was pissed (besides our band)? Our fans. Having supported us all those years, they now saw the apparatus of the music industry whittle away our faith in the business of our band to the point where we quit. It’s easy to look over this fact, but it’s critical not to: Music fans talk to musicians, and most musicians have historically not been happy with the way the industry worked. It wasn’t that we had bad music or bad management — our fan base just wouldn’t scale big enough to support our business team. I can see why those who succeeded in the past want to protect the old business model. It strongly favored the incumbents and built a nearly insurmountable barrier of entry that the average musician had little chance of scaling.
For both musicians and listeners, failure was the common narrative of the record industry. We sat and watched our friends write great music people loved, yet they were unable to make a living doing so, even and especially after they were signed. We saw the rare few musicians who truly made it big falter in the excesses of the industry, becoming drug addicts as the drive for manufactured popularity hollowed out the meaning of their music. Add to that the aforementioned widespread industry corruption. Factor in decades of consumers buying albums of mediocre music for one or two good singles. Pile on a digital distribution cost of near zero. Put a recording studio in every home with a computer. Lastly, drop the RIAA suing music fans for sharing music as the cherry on top, and there you have our generation’s hatred of paying for access to music.
If there is an ethical dilemma here, clearly it is your generation’s music industry, not our generation of listeners, that must bear the brunt of the blame.
I appreciate your statement that “on nearly every count [our] generation is much more ethical and fair than [your] generation”, but I don’t understand why you’d single out musician’s rights as something we specifically don’t respect. After such praise, a claim like that just seems silly.
Free Culture opponents often suggest technology somehow caused our generation’s desire for compensating musicians to evaporate. But it was clearly the corruption and ineptitude of the industry itself that is to blame for this negative attitude toward paying for music. Digital music technology provided the opportunity musicians and listeners have been waiting decades for — to balance the industry’s unchecked power, and maybe eke out a more sustainable living in the process.
Fans formerly had no apparatus to directly compensate artists. Now that they have tools like Kickstarter and Bandcamp, we’re seeing millions of dollars pouring directly into musician’s pockets. This represents a fraction of the so-called “lost value” of paid access to music, but given all the money and lobbyists the old industry has thrown at and against digital music innovation, it’s remarkable nonetheless.
That’s the thing about asking our generation to fix the record industry. We’re already doing it. We’re connecting artists directly to fans and bringing back patronage, a far less exploitative model that is emerging as the foundation of the new music career. We’re using crowdfunding to finance our work. We’re using digital tools to democratize distribution and licensing, with fairer publishing deals. Instead of basing our entire career on one album dropping or flopping huge, we’re ditching the LP in favor of a steady stream of singles, what fans really want. Apps are the new album. Production is going more lo-fi but is becoming more diverse and original in the process. These are the viable solutions I was talking about earlier. It’s all actually quite liberating because none of it involves being exploited by the music industry, and if it does, it’s certainly far less than in the past.
And yes, we’re selling T-shirts. I wouldn’t have to sell ‘em if I had a dollar for every time I heard, “your music is free, so what, you’re going to make a living selling T-shirts?” But the profit margin is good and they’re moving off the merch table like CDs used to. You have to realize that when the physical media that holds the music is no longer a profitable product, there are myriad replacements which tie the music to a physical product that can be profitably sold. The critical thing to realize here: the devaluation of the music recording increases the value of merch for the artist. Our fans are gonna spend $10 at our merch table anyway — should we sell them a T-shirt they will wear everywhere for a 150% markup, or should we sell them a CD they’ll burn and shelve for the statutory rate of 9.1 cents per song?
Besides selling recorded music, there are dozens of revenue streams for us to pursue. Many are accessible to musicians directly for the first time thanks to the democratizing effect of digital technology. For you to blame technology for unfair artist compensation is odd, for it was unethical industry dominance over the technology of vinyl, radio, cassettes, CDs and the overall apparatus of distribution that created the record business in the first place. The only difference with today’s technology is that the exploitation-crazy record business doesn’t yet have a stranglehold on it. Whether musicians succeed or fail is now up to the musicians and the fans themselves, not the industry.
So when you ask my generation to fix the music industry, we shrug our shoulders — but not out of apathy for music or musicians. We know the music industry sucked and can be better, so we’re not going to support the old way of doing things. We are at a crossroads. There will be a period of hardship and confusion. But don’t tell me we ethically don’t support artists. We listen to vastly more music than your generation ever did. We like, on average, a greater diversity of music than your generation ever did. And we’re still spending money, we’re just being attentive to where it’s going. We want to compensate the musicians, not the industry. It’s not only our choice, but our cause and our fight. The industry is throwing all the money, lobbyists and lawyers it can toward legally protecting its right to intermediate the direct fan-to-artist connection we have sought for decades and finally hold in our hands. We’re not going to allow Free Culture detractors to let that slip away just so they can collect royalties and recoup advances on music made in a bygone era.
We’d love to solve the music industry — really, we would — but we kind of need to save our culture first. Not incidentally, we believe artist compensation as critical to saving our culture. Pining for the old days when we enriched entertainment conglomerates instead of technology conglomerates? Who cares which industry is trying to co-opt our culture today, let’s take as much control as we can while technology affords us the opportunity.
I hear lots of crying about the traditions of the old business model, from the beauty of album art to the selling of millions of records. But you know what’s really sad? It will only be a few years before the entertainment conglomerates including the “Big 4″ record labels (or soon to be “Big 3″, how fair is that?) push back against the technology industry with a SOPA, PIPA or CISPA-like bill that passes into law. By then it will be too late and we’ll be crying over a lot more than our lost free access to music. Our culture may be lost in the unsustainable abyss of capitalism run amok if we the people lose too much control over technology during this critical transition.
I think I speak for most musicians when I say I’m going to make the best music I can until the day I die, and that money only determines how much time I can dedicate to that pursuit. There are way too many other musicians out there getting exposure for me to even entertain the argument that the current environment dissuades one from being a musician. I have a $1,000 studio in my basement that would have cost $100,000 a decade ago. I can make and distribute an album for free, and crowdfund a basic living doing nothing but music if I can generate at least 1,000 fans who spend $50/year with me on average (many $20 supporters and a few big backers). All I need to do is write a year’s worth of good music. With fifteen years as a musician under my belt I think I can manage.
(Not incidentally, I have other life skills I am employing to make my living, which is a very underrated issue in and of itself. What percentage of your income must be derived from music to be considered as “making a living playing music?” What about those whose non-music careers enable their music success, like website designers or audio engineers? If you manage a great music career, are you a successful musician or a successful manager? Furthermore, aren’t we all musicians? Most of us have the ability to make music but just don’t practice. Instrument and recording equipment sales are on the rise, so musicianship must be too. Everyone is already a DJ, how long before listeners are considered musicians? But that’s a subject for another article…)
It’s obvious this new music industry is crappy for scaling a band into a big blockbuster. But we are slowly getting over the rock star trip. The new music industry helps numerous smaller bands scale into moderate success. As the success stories mount, fans are starting to believe in supporting music again. Try to tell Amanda Palmer or her 24,883 fans who collectively raised $1.2 million dollars on Kickstarter that the old way of doing things was better. Then realize her story is becoming less of an exception with each passing day.
All this talk about not being able to make a living as a musician is nothing new at best. At worst, it’s dangerous, because it perpetuates the myth that only through charging access to music can one have a music career. It’s that myth that is keeping us from entering a new golden age in music. Emily White was simply telling us the truth. Come on, you know she would not have written the article if she didn’t care about compensating musicians. She works for freakin’ NPR on a show that regularly breaks new acts. It’s time to look inward and consider that Free Culture is our generation’s reaction to the ethical failings of your generation’s music industry.
Music evolved alongside language and culture over millions of years to form a universal method of communicating emotion. For most of our species’ history, music’s primary purpose was to unify communities. Over time, various forces conspired to make music’s primary purpose entertainment. Chief among these was the music industry, which subjugated and exploited cultural evolution and unity for profit.
The original intent of copyright law was to protect content creators’ livelihoods while promoting cultural evolution by preserving the creative environment. Instead, the music industry (itself now a subset of a hyper-consolidated military-industrial media oligopoly) corrupted the law to steal musicians’ profits and stifle creativity. While the industry’s rapid expansion of the market during the 20th century certainly helped spread music for and wide, the cost of this commodification on our culture and creativity was heavy.
Over the previous decade, digital technology has disrupted the balance of power between musicians, listeners and industry. The record business is no longer sustainable in an era of free access to music. Unsurprisingly, the music industry, with its history of ineptitude and entitlement, is once again throwing all the money and lawyers it can at changing the laws in their favor. As musicians and listeners, we stand at a crossroads. Do we take advantage of the opportunities technology has given us and actively redefine music in the 21st century to be a force of unification once again? Or do we continue to allow the industry to subjugate the universal method of communicating as a means for enriching corporations?
Several weeks ago I attended the Rethink Music conference in Boston. I can honestly say it felt like I downloaded the entire music industry in 48 hours. A non-stop parade of executives and managers concisely detailed the challenges they faced in the digital music age. In panel after panel, their guarded optimism shone like a dull reflection off a classic automobile that won’t start. Between furious note-taking and tweeting, I got all the the insight, confidence and enthusiasm I needed to begin writing the book I’ve been planning for ten years.
I want to extend thanks to the organizers and everyone who made this conference possible. Attending it changed the way I look at music and the music industry forever. Writing a book about musicians, fans, technology and the music industry has been a dream of mine since Napster hit the scene. After spending the beginning of the year cataloging my key thoughts and ideas from the past decade, I am now tackling this monster project every day.
I approached the conference deeply entrenched in my disdain for the overall apparatus that controls access to and thus commodifies music. I believed that technology got us into this mess and could get us out of it. I felt that music should be free like water (and bottled for profit when it serves the artist’s best interests). Most importantly, I felt that our culture had become a wasteland for the benefit of a corporate media oligarchy.
After attending the Rethink Music conference, that smoldering resentment of the exploitative music industry has never been more fully stoked. The trampling of artists’ and fans’ rights in a quest for revenue continues unabated, but you can’t blame the industry. It’s their job. But I’m not writing the book to change the attitudes of the music industry. I’m trying to change the attitudes of fans and artists — it’s the only way to force the industry to change.
Here are my five big “lessons learned” from the conference:
I learned what many Americans already know — that lawyers are generally evil, and entertainment lawyers are worse. I always knew IP law was horribly broken, but I never realized how this was the absolute bedrock of the talent exploitation business. he lawmen justify their dubious ethical position by telling musicians, “I’m doing this to protect your rights and revenue”, which rings about as true as a cigarette company telling a smoker they are protecting their freedom of personal choice. What’s worse — with rock and pop publishing deals involving multiple parties, I learned that some big deals just don’t get made. The result? The rights holders can’t afford legal representation to make a deal after the fact, caught in a Catch-22 because the deal isn’t done. Millions of dollars are floating around unpaid because deals don’t get made, period.
I learned the industry is really as dumb as you think they are when it comes to technology. Incredibly, Napster hasn’t really taught them anything, now 10 years down the road. There were a few exceptions — Open EMI’s pre-cleared license hacker sandbox was the most notable. The Echo Nest is clearly and deservedly well-positioned to become industry tech darlings, enabling the big boys to play with the same tools the small, agile tech startups hold inherent to their hacker talent and creativity. But by and large, the entertainment is a lot like the government — it still doesn’t understand IP in the 21st century, and thinks it can use the old tactics to prevent the freeing of music for the good of fans and artists (to benefit the industry). But without technology in their blood, it’s going to be a multibillion dollar quixotic struggle of epic proportions to try to steer the future of music into conglomerate control. Since they can’t dam Niagara Falls, all they can do is pass laws to make it illegal to visit. But what happens when all the rivers flood? Consider that in the U.S. Apple generates over 100x the annual revenue of all domestic record labels combined, and then you see how badly the music industry needs help in the technology space. This is all so ironic because the entire record industry is based around leveraging technology to make people pay for music.
I learned that one of if not the biggest impediments to the industry generating revenue in the digital space comes from their technological stupidity. One of the main themes of the conference was how screwed everyone will be for years to come because of the industry’s inability to manage the information that is responsible for profitability. There are an infinity of micro payments flying around for songs with different metadata and all manner of licensing, publishing and other exploitation rights and rates to be tracked. Though there are myriad solutions being put on the table, the industry seems to have collectively shrugged its shoulders, hoping the geeks will figure out eventually if they throw enough money at the problem. I heard a lot of guarded optimism as a facade for folks who were clearly flummoxed by the complexity of digital music analytics.
I learned that what I believe to be most exciting and promising thing happening in music today — the gamification of social music advocacy — is something the industry is largely oblivious to. While the conference’s Genesis award winner Have You Heard was honored for proposing such a system, it’s insanity that the big players like Spotify had nothing specific to show in that regard. Perhaps they thought they were protecting “trade secrets” but I’ve got news for them: this is exactly why the music industry is choking. someone smarter than you is going to beat you to it. You need a Turntable.fm to come along and flout licensing until the Big 4 say, “why, look at how you’ve grown! Accept our terms or we’ll kill you.” That’s the industry’s current model for innovation — let the geeks figure it out, then buy it or sue it out of existence. For the young entrepreneurs fresh out of Harvard who proposed the “FourSquare for fans” idea at the conference — I’m afraid this too could be your fate.
Perhaps the most important lesson of all: I learned that when artists blame the fucked up music industry for their failure to succeed — or worse, their failure to get paid from their success — they’re ultimately blaming the industry for their own failure to understand the music or the business. There are a million “How to Succeed in the Music Industry” books, none of which have ever helped anyone write a good song. Conversely, there are thousands of great songs written by musicians that no one will ever hear, because the artist has no faith, interest or aptitude in the music business. Why should they? The industry is actually OK with its role as artist scapegoat, because if the artists really understood their responsibilities, they wouldn’t have to put up with such exploitation. Being a musician is really about being an entrepreneur, starting a small music business. What we need is millions of small music businesses, not a handful of monopolies trying to squeeze the last dime out of a dying industry, willing only to co-opt and rarely to innovate. Music, like life, is free and alive — and as they said in Jurassic Park, “life finds a way.”