Friday, June 29, 2007

The Music Industry

Rolling Stone recently published a fascinating two-part article on the state of the music industry. The first part explores, perhaps unintentionally, how the resentment that customers must have been feeling toward the record biz for years has finally, for all intents and purposes, done it in.

I'm going to tell you a little story. Anybody remember Personics? That little store in the mall where you could get your own cassette made with all your favorite songs on it, in crystal-clear "cassette-quality" audio? My father was a big fan of Personics; he wasn't much of an album guy. Anyway, the only problem with Personics was that only about a third of the major record labels agreed to license their songs for use. That meant that you had to pick and choose your songs from a big random list, and it barely had anything good on it. It didn't even have all the songs from a single artist's catalog. You might see a few Beach Boys songs, but not all of them - not even all of the famous ones! No, these were the crumbs that the record industry was willing to offer you. And yet, my father was ready to make do with those crumbs. He still complained, of course. "I don't know why the other labels don't agree to this thing. It's a great idea. They could make a ton of money. They're just a bunch of greedy bastards, that's all it is."

One day, my father went to the mall and was shocked to discover that Personics had gone out of business. He asked the clerk why. "Not enough record labels agreed to license their songs." My father was outraged. "I can't believe it!" he said. "The record companies are gonna pay for this someday. I mean, it's not like they had to give away the songs for free. They were still getting paid for the songs. They just wanted to make more money. Fuck them."

Sure enough, years later, when the mp3 and digital piracy exploded in popularity, my father turned to me. He said, "You know what this is? You know what this is? This is revenge for Personics."

One of the suits in this article makes an interesting observation. When peer-to-peer took hold, he says, "That's when we went from music having real value in people's minds to music having no economic value, just emotional value." I think what really happened was that people simply lost respect for the record industry, and no longer felt obligated to treat it fairly or seriously. The public had been figuring out, for a while, that the record companies were being rather exploitative with their artists' music, especially considering that by the late 90s, it was clear that CDs were not nearly as expensive to produce as they were to buy. The profit margin on those things was pretty ridiculous. And sometimes people simply wanted to own one or two songs by an artist, but had to settle for an $18 "Greatest Hits" CD full of filler. Also, whereas like most technology, CDs should have been getting cheaper with the passage of time, instead they were becoming more expensive. I think the record companies just kept raising the prices hoping that nobody would notice. But people noticed all right. They noticed, and they waited for their moment of revenge.

Technology became their weapon of choice. And once technology enabled the free transaction of CD-quality music, nobody had any second thoughts about acquiring music in that fashion, because nobody respected the music industry's claim on the music anymore. Because they'd already felt like they'd been "cheated," they hardly considered what they were doing "stealing." Yes, the artists lost out, but piracy wasn't about the artists; it was about giving the record companies their just desserts. The public knew that a bunch of guys in suits had basically lucked into ownership of all this music, even though these guys had nothing to do with the music's actual creation. So when technology finally caught up with them, nobody hesitated to "steal" their product, because somehow people knew, in the back of their minds, that it was barely theirs to sell anyway.

Once upon a time the record companies were actual middle-men who actually helped deliver a hard-to-create physical product to the public. But one day the public finally realized, "Hey, you know, we don't need the middle-men. They're standing there in the middle and we don't need them anymore. They can go home, be teachers, work for the Park Service or something." Comments like these are not likely to change people's minds: "More than 5,000 record-company employees have been laid off since 2000." Oh my God what a tragedy. "A great American sector has been damaged enormously," says the guy from the RIAA. Sure buddy. Go cry in your limo.

Now if the artists were saying, "Hey, we're starving, we can't pay the bills thanks to piracy," then people might be sympathetic. But aside from Metallica, it doesn't seem like the artists even care. Ultimately I'm about the artist. The artist does the hard work. There could be no music industry without the artist. A moral industry would have the artists' best intentions in mind. But people sense that these record company guys are just plain greedy. They're not interested in the happiness of the artist, they're not interested in the happiness of the consumer; they just want to make money. So it's been difficult for the public to work up too much sympathy.

The system as it stands right now is faulty. I think people recognize that illegal downloading is not the answer. The artists need to receive money for their work. But the record industry is set up so ridiculously that if it takes a decade or so of complete chaos and questionable activity to make the whole system re-evaluate itself and invent a different model, then so be it. Nobody likes breaking the law. But if that's what it takes to generate a fairer system, then hey. What a lot of people are probably thinking is, "Yeah, piracy is bad, but the record industry is worse."

So here's the question that we've got to ask:

Can (or should) recorded music remain profitable?

And thus we come to the second part of Rolling Stone's article, which proposes several alternatives to the currently moribund system.

Theories 1 and 2 sound the most plausible. The way it's set up now, 99 cents for a single song is ridiculous. People should be able to pay $10 a month for all the music they want. If the ads create the money, like with most websites these days, then so be it. If people pay their internet provider, then that works too. My only concern is that people will only be able to download music from Warner Brothers, or from Sony, or some nonsense like that. We need a system where we can download whatever the hell we want. I'm also concerned that these systems will exclude bootlegs. Some of my most interesting finds have been unreleased concerts, or collections of outtakes, or alternate versions of albums. I fear that these "officially-sanctioned" peer-to-peer networks will only consist of "officially released" music. However, there is another issue at stake, and that's the issue of artistic control. I do recognize that artists have the right to some artistic control. But as long as the artist is able to release their work exactly as they envision it, then I see no problem with alternate versions being available to the public. Artists have to relinquish some control if they wish to profit from the public sphere.

Theories 3 and 4 sound weird. In what universe is "the future of the music industry bright"? That guy sounds like an idiot to me. And "the labels acting as managers"? Sounds like more of the same old crap. Finally, Theory 5 just sounds like a record exec fantasy; I don't know anyone who trades music in that manner. Maybe 12-year-old girls do.

But here's a truly radical proposal, folks. What if we said this? What if we issued a sort-of Emancipation Proclamation of Music, and just declared all recorded What if we just said that it will no longer be profitable to make recorded music? At all? Could we do that? Should we do that? What would be the consequences? The benefits?

Obviously the people who would suffer most would be the acts who record music but do not tour. How many of these acts are there right now? How many of these acts have existed in the history of popular music? I can only think of a few examples off the top of my head: late-period Beatles, late-period Steely Dan, and Harry Nilsson. So basically if an act wanted to be like Harry Nilsson, they couldn't do it anymore. Is this an option we'd like to preserve? If not, then we don't have to worry about creating a new, workable system. But if so, then we have to come up with a system that would be fair to both the consumer and the artist alike.

Let me throw some more ideas out there. Maybe all recorded music would be free except for the music of currently active artists. That way the artists who are still trying to make a living would be able to do so, and the artists who are either filthy rich or dead would have to relinquish extra profit. Or how about this? If an album makes a certain amount of money, then it's free after five years. But if an album doesn't make very much money initially, we leave room for potential cult success and say that it doesn't become free until it sells a certain amount of copies. Honestly, I guess my main point is that the music of the 60s and 70s should essentially be free by now. Hell, any music that's more than five years old. The truth is I don't think people will be willing to pay vast amounts of money for older music ever again, now that they've gotten used to stealing it. It's simply not that hard to find and not that hard to reproduce in high-quality sound. Let's just call it public domain and be done with it. Of course, I think older cult acts still deserve the chance to make some money off their material, and that's why I'd like to create a system that would allow that. But I'm not paying $18 for a Led Zeppelin CD. Even with the packaging.

What would I pay for, you ask? Hmmm. I can conceive of paying for an artist's entire catalogue, on mp3, in high-quality sound, with no glitches, for maybe about 50 cents. Seriously. And maybe with some exclusive video clips, photos, and essays thrown in. But at least the artist would still get some money from me. And something is better than nothing.


yoggoth said...

I'd be interested in a story that examines the decline of quality radio programs. Am I imagining things or did this occur right around the time that the music business as a whole began to rabidly decline?

herr zrbo said...

Didn't read the Rolling Stone article but here's my take:
The biggest problem with making music free is that the artist generally needs money to buy and rent equipment. Most of the bands in the scene I listen to would not be able to afford their synthesizers, macbooks, and other crap. I think this is the most important concern for artists, more than making a profit on their music.
Also, as to your question as to how many bands are out there that don't tour, you really don't seem to have a clue. There's tons of bands that make music and don't tour. Pet Shop Boys and Gorillaz pop up in my mind instantly. 90% of the bands in the EBM genre don't tour, most of them are guys in their basements in germany.
Maybe the 5 year thing works. It would probably be better to extend it to 10 or 20 years. But yes, anything from the 60's or 70's should be fair game.
It's a strange dilemma. Sure, you've got bands that 'deserve pirating' cause they've made their billions. But it's the other 90% of the industry of indie acts and unknowns that need their music protected. How about an artist's music is free once they've made more than 5 million, and they can only make money on touring after that? That might work.

yoggoth said...

The problem is that any solution would have to have a legal basis that a publisher and an artist agree to. None of your solutions sound like something an established artist or publisher would agree to. That's why the system has slowly fallen apart. It'll be up to the artists and new companies to work out a method that allows each some control of their product.

I don't think it's a huge loss. People can still tour to make money.