U2 Manager Says Google And Its Hippie Friends Should Pay The Recording Industry
from the still-haven't-found-what-i'm-looking-for... dept
While the IFPI and the RIAA have been actively pushing for ISP liability for file sharing, it appears some in the industry are taking it even further. U2's manager for 30-years, Paul McGuinness, gave a talk at the Midem conference where he blamed Silicon Valley's "hippie values" for creating the problem, and demanding that tech companies of all stripes start paying the recording industry. He's talking not only about ISPs, but also Google, Apple, Microsoft, Facebook and basically every other successful tech company. There are so many problems with this, it's difficult to know where to begin, but let's tackle a few of the quotes:First he blames these companies who have "built multibillion dollar industries on the back of our content without paying for it."This is a common refrain from those in struggling industries, but it's meaningless. Complementary goods are a natural for building bigger markets, but no one expects one side to pay the other just for moral reasons. The oil industry's success is built on the backs of the automobile industry, but does the automobile industry demand that oil companies have a moral obligation to pay them? Computer makers have built a multibillion dollar industry on the backs of the internet and software companies -- yet, no one says they have a moral obligation to pay those companies anything. Travel guides have built huge business based on hotels and restaurants around the globe, but does anyone think that those travel guides owe the hotels and restaurants money for doing so? Hell, the recording industry itself was built off the backs of complementary goods such as radio, yet when they paid radio stations, it was known as payola and outlawed.
These companies, McGuiness claims, need to help out "not on the basis of reluctantly sharing advertising revenue, but collecting revenue for the use and sale of our content."Uh huh. And I guess that automobile companies should be collecting revenue for the oil companies. And, home builders should be collecting revenue for the electricity companies. And, airlines should be collecting revenue for the hotel industry. You see, these are all separate industries. They may be complementary, but it's up to each one individually to figure out the business models that work. None should be pressured into saving the other from its own missteps.
"I call on them to do two things: first, taking responsibility for protecting the music they are distributing; and second, by commercial agreements, sharing their enormous revenues with the content makers and owners."This is beginning to sound an awful like journalists who claim that Google has a moral obligation to "share revenue" with newspapers.
He claims that what all of these companies do is the equivalent of a magazine that "was advertising stolen cars, processing payments for them and arranging delivery."That makes for a nice soundbite but has nothing to do with reality. First there's the little problem that nothing is being stolen here, only copied. Second, none of these companies are "processing payment" for unauthorized transactions. Third, none of them are "arranging delivery." It would be like the same scenario, but blaming the guys who paved the road on which the car was driven.
"Embedded deep down in the brilliance of those entrepreneurial, hippie values seems to be a disregard for the true value of music."First, this shows a misunderstanding about the difference between price and value. It also misunderstands the culture of Silicon Valley, which is generally more libertarian these days than "hippie."
On top of all this, McGuiness is whining about this at the same time that U2 is pulling in incredible profits, making $355 million on its last tour. You know what helped fuel some of that? The fact that a new generation of fans are learning about U2 from downloading its music for free. Not only that, since they don't have to stretch their entertainment dollars as far on buying the actual music, they can pay the exorbitant concert ticket prices that U2 is charging these days.
The problem here isn't that others are letting the recording industry languish. It's that just about every other industry has realized that there's plenty of money to be made in the music industry. As we've pointed out, just about every aspect of the industry is doing fantastically well. More money is being made on concert revenue than ever before. More artists are making music than ever before. More music is being heard than ever before. Even more musical instruments are being sold than ever before in the past. Yet, because one segment of the market (the one selling plastic discs) is unwilling to take some simple steps to change its business model, everyone else has to pay up?
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Filed Under: blame, complementary goods, hippie values, morals, music industry, paul mcguinness, recording industry, silicon valley, u2
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You should have hired Bill Gates based on his Guitar Hero score. Instead, why not blame it on this new PR term called "Hippie Values".
God Damn you U2 and the horse you rode on.
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I don't understand where this "hippie values" statement comes from. I suppose that absent of hippie values, U2 would have sold more albums..?
Still, the issue is in creation of new art. Maybe the recording industry needs to return to the core competency of 'creating an environment which allows artists to create' from what seems to be the core comptency of 'suing people'.
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The proper response
An industry decimated by its own greed and poor business decisions, and this is their response? Sort of enlightens you to how they got their in the first place.
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Re: The proper response
See how well the RIAA brainwashing has worked. In your own post against them you still are supporting them by stating they are losing money.
Please explain:
"On top of all this, McGuiness is whining about this at the same time that U2 is pulling in incredible profits, making $355 million"
Is $355 million "decimated" in your opinion? Or perhaps you are referring to the recording industry profits and not U2;s. While I don't have any figures for how much the recording industry made, I would best my left nut it was more than U2 made.
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What a Tool
I think he has been drinking too much Guinness. Hey, can you now get one at the drive up? Do you want fries with that?
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bad joke :)
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Crappy magager for a crappy band
Also, for the lulz:
http://www.thebestpageintheuniverse.net/c.cgi?u=11worst
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I wonder if he realizes...
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Conttrarily
On the contrary, hotels pay the guides for placement, referrals and general advertising.
And, airlines should be collecting revenue for the hotel industry.
Once again, the hotel industry pays airlines directly or subsidises tickets through agencies. This is most easily recognised in ticket prices to Vegas and Disney.
The problem is that McGuinness, like his peers, doesn't understand the math, or doesn't want to. If the former, then he needs to see the supposed lost $3M of CD sales as sunk costs in concert promotion which paid off more than 30:1. If the latter it's because he knows no one outside the industry knows how their internal accounting works and thinks they have a shot at an even bigger purse. I know I'd rather count on sucking at one huge teat in Mountain View than try to scrounge a feeding from licking ten million tiny nipples around the world.
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Re: Conttrarily
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Re: Conttrarily
"
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Re: Conttrarily
But that's a mutually agreed upon deal. It's not one industry demanding the other pay up for moral reasons.
Once again, the hotel industry pays airlines directly or subsidises tickets through agencies. This is most easily recognised in ticket prices to Vegas and Disney.
Again, mutually agreed upon deal that makes both better off. Not because of some moral obligation.
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bono
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Nice Article Except
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Re: Nice Article Except
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Re: Nice Article Except
If you'd been following all his previous arguments you would know what he was talking about.
PS: Techdirt, the word "Okay" isn't in your spell check.
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Re: Nice Article Except
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Re: Nice Article Except
So you are saying that you're a pedophile?
(See how easy it is to put words into peoples mouths?)
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Re: Nice Article Except
No, not at all. I'm saying that bands that recognize how they can benefit from file sharing stand to do better. That's not the same as saying it's ok.
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Re: Nice Article Except
when i learn about a new artist on the radio or hear a new song on the radio, is that stealing? if i hear a song on the phone while i am on hold, is that stealing? if i go to my friends myspace page and hear a new song, is that stealing?
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What's that wailing I hear?
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Hippie???
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WOW!!!
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Thoughts on the future...
Considering this, the next four years will release eight years of pent up frustration within the artisan community. I see it as a rebirth. The sequestering of the writers only adds to the fire.
There won't be enough outlets... Businesses will be created to fill the voids that Apple, Stephen Colbert, Jon Stewart, Google, and NBC won't be able to fill, just to create a name outside of (then commotized) Youtube.
It will be a great time for companies who utilize everything we've learned in social networks, folksonomies, and libertarian values over the last eight years.
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Re: Matthew Dismuke
You'll also find he has an aversion to using "steal" when you really mean "copy," as theft requires some finite good which is denied to another, and digital music is infinitely copyable by it's nature -- you don't have less music if I "take" it from you.
Even that aside, Mike argues that music SHOULD be free to download, legally, BECAUSE then (1) you will get more fans through exposure and (2) You'll be able to make more from concerts because your fans don't need to decide between seeing you and getting your latest album.
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Re: Re: Matthew Dismuke
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Re:
At the time, the only quotes were what was available in the articles themselves. The full text is now available, however. Feel free to read it yourself:
http://www.billboard.biz/bbbiz/content_display/industry/e3i062b16e707aa99916c212e660cbf fd3e
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Doesn't Paul McGuinness owe U2 something then?
I don't think the band got together in a garage somewhere and said 'Ok, we've got a bass, drums, guitar and a singer...all we need now is a greedy weasel manager and we can start making lots of money.' Nope, bands start because people want to make music. If they didn't want other people to hear it there would be no such thing as the recording industry.
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Musicians call for more suppression
How can someone in involved in the music business harangue a bunch of US tech people and businessmen for being "hippies" and not preventing their work from being shared freely?
Surely this should be the other way round, aren't the artists and the people who work with them supposed to have something to say, some message to be heard while all the big corporations* conspire to shut them down? But no, those damn hippies are letting all the music out for free - and they won't even admit it, let alone pay Bono. Who is clearly suffering so badly he was forced, FORCED I tell you, to move his whole operation out of Ireland just to save a few hundred million Euros in tax.
*AKA "The Man"
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Get a job
The entire music "industry" could collapse tomorrow and I wouldn't shed a single tear. There will still be music and musicians will still make livings.
Of course, certain female superstars with family problems will have to crawl back into the white trash swamp that spawned them. But that's OK by me.
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hippies in silicon valley...
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kissfour
http://www.87717.com
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about facilitating delivery of content
In that the tech companies are providing the medium by which copied content is shared, there might be a basis for an argument that "they are facilitating in the delivery of goods". I know that when I am looking for the lyrics of songs on the web I am frequently offered video & audio content that I have paid no royalties for. If I were to click on the link provided by Google, you might say that they aided me in obtaining content that I had not paid for.
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one reason mcguiness is upset
So, there you have it. My 2 cents. Which is all their worth in the case of a silly blog post.
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So his words come from a struggling industry? Doesn't that kind of not match your later words of "On top of all this, McGuiness is whining about this at the same time that U2 is pulling in incredible profits, making $355 million on its last tour."
First you say he is struggling, then you write they pulled in incredible profits? Which one is it? I doubt it can be both.
It is pretty damm easy to tell someone else in a different industry what their business model should be. Maybe this guy knows what it is like in the real world of music?
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Re:
I think Mike's use of the term "struggling industry" is a sarcastic comment on how they see themselves rather than how it actually is.
Plus the industry is struggling, in a way. Struggling to end "rampant piracy" at least.
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Re:
The music industry - which includes the recording industry - is thriving. This includes musical acts such as U2 who are making wonderful profits on tour.
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Re:
No, I'm saying that the band is doing well, while the *recording industry* is struggling. Note that recordings are only a part of where a band makes money from. So, the band is doing fine, but the recording business is struggling.
Sorry if that wasn't clear.
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Uh, ya
Eric
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@ReallyEvilCanine: Good point, but...
"I know I'd rather count on sucking at one huge teat in Mountain View than try to scrounge a feeding from licking ten million tiny nipples around the world."
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So I guess nobody like U2!!
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honestly...
About 5 years ago it all came out at a Stanford(?) conference on intellectual property when one of the members of Negativland happened upon the road manager for REM and it was discovered that he had found their album, thought it was neat and, thinking they might like it as well, forwarded a copy to U2 who then promptly sued Negativland into bankruptcy. No cease and desist letter.
Bono and crew are the enemy and always have been.
I used to have the link to the video that shows how all this came to be known but can't find it now. Maybe someone else will be so kind.
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Re: honestly...
That's the video of REM's manager describing how U2 got their hands on the album and how suddenly and "without U2's knowledge", a 110-page lawsuit was filed. It takes a bit to get to the juicy parts but it's very enlightening.
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Don't forget to blame the power company, after all - without their power, you couldn't run the PC to get to google.
Get the Plastic Companies too! Without them, you couldn't have ripped the CD to your hard disk!
Don't forget the shipping companies...
and on... and on... and on...
Well - U2 doesn't have to worry! I wouldn't download their music anyway!
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Struggling?
Or struggling with creating a new business model when they can't do math - from the MPAA piracy in higher ed study?
Or struggling to remain relevant with a potential member leaving the RIAA?
Eric
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Re:
And while we are on the subject Bono, stick to making music and keep your nose out of other country's affairs. Your big mouth should be used for your profession, music. On political matters outside of your country, keep your fat mouth shut. We are all tired of your self righteous blabbling about how much we should send to dictators in Africa.
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Position opening
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I called it!
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Bono(er)
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I love listening to billionaires whine about how m
Still the exact truth about the same beast doing the same things to the same people. And when the lables point to their 5%-'partners'/artists as being the real victims of 'piracy,' I see a pimp holding up his whores and saying, "C'mon, man, pay up! These hos need some food!"
Everybody, please--make your own records.
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The Economist has a good article on this exact same topic. A study by Steven Levitt (co-author of Freakonomics" wrote that prostitutes do better with pimps-they work fewer hours and are less likely to be arrested by police or preyed on by gang members. The study author stated that a few prostitutes asked the researchers to introduce them to pimps.
So I guess you may be wrong in comparing the labels to pimps, or maybe just that the labels and pimps are a good thing.
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(A small piece of $355M is still a nice chunk of change, and I'm fairly certain that's not their sole income for the year.)
Even if they're making less now than they used to make in the 90s they're making more than the rest of us, and saying they "deserve" to because they're "talented" is a bit of a stretch, IMHO.
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The Funny thing is...
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ITS TIME FOR THE RECORDING INDUSTRY TO GO UNDER
FUCK YOU RIAA, FUCK YOU VERY VERY MUCH AND THE SAME GOES FOR ANY SO CALLED ARTIST WHO STANDS BY THEM.
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Ha Ha Ha
You make music... and post it everywhere... tv, computers, radio...
Then you blame people for getting music... even people who buy the CD, they believe should buy the cd again in computer version, to listen on the computer, then buy it again for your mp3 player... then if you made a mp3 cd for your car, you should have to buy it again?
Ever since artists and the music industry started to complain, did everyone that I know say "screw it, new music sucks balls, and I already bought everything I need"
Bottom line, is that good music sells. If a company had an employee who was decent then complained and annoyed everyone all day every day... they would get fired
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i guess marketing goes a long way.
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Prove the Profits
"More money is being made on concert revenue than ever before."
You are doing only a surface analysis by looking at the concert top-line grosses only. Musicians will ultimately make decisions to tour based on the leftover profits not the gross. What is left over as profits which would have to take into account:
1. Higher gas and transportation costs (rule number one- the van will break down)
2. Huge increase in minimum wage costs for loaders/unloader help if it is not a union facility
3. Increase in liability insurance costs on the promoter side (leaving less money for the band)
4. Increase in medical expenses (musicians get sick and need treatment on the road- many times without health insurance coverage). If the singer gets a serious cold, or the drummer strains their back loading stuff all income stops.
5. Where are your numbers for merchandise? Can you even verify if those numbers are up or down? Isn't a portion of this activity under the table to avoid taxes. If so is it fair to not pay taxes? If just local or states sales taxes were enforced that would be a huge drag on sales to have to do the accounting properly.
6. Someone up above properly mentioned income tax burdens and how one splits profits across state and country lines- these are very pricey to pay and very pricey for the accounting help burden
7. Many more items could be added to this list but I am running out of time
Bottom line, Mike, I don't have access to the exact profit numbers because they span the public, private, and underground sectors of the economy. I doubt that you can produce those numbers in sufficient detail to prove out your above quoted statement. And some people intimately involved in the concert business seem to think your analysis is flawed.
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@31
http://en.wikipedia.org/wiki/Negativeland#The_U2_record_incident
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Re: @31
Nope, it was U2. U2 pretended they knew nothing of the band or the lawsuit but the above video says differently. You may have to watch a little bit to get to the juicy parts but it's all there.
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i agree with the guy
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Yeah, go with your revolution, only the land you will inherit will not be worth living in.
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It kills me...
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the next metallica
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Re: the next metallica
but but but they have to pay for GAS and AIRPLANES and INSTRUMENTS and THEIR MANAGER and manufacturing T SHIRTS and then the pittance that is left has to be divided among FOUR PEOPLE how can they ever make enough money like this!
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Good grief.
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More to the point
As popular as sharing music online may be, it really has very little to do with the explosion of ISPs. Bono may think he's the second coming, but the entire music industry really needs to get over itself.
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U2 Manager Rant
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Principle of Incoherence
It seems to me that this speech is one of the times to invoke the principle.
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U2's Boner
I watched a biography of Leonard Cohen, for some reason they thought Bony would lend credence to it I guess. All I noticed was that Bono impressed Bono.
He has yet to impress me.
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Great post
Thank you, thank you, thank you for pointing this out. The music industry knew at least as far back as 1994 that digital music sharing was coming.
Why did they stick their fingers in their ears and refuse to make the shift, leaving a vacuum to be filled by Napster (tho old, "illegal", good version) and all the others?
Possibly to preserve huge profit margins? Possibly out of fear that next year's proprietary technology would be the following year's Betamax? Possibly out of an inability to work together just long enough to become the pre-eminent source of internet music?
No matter. They knew it was coming. The actions of the RIAA and thinkalike groups now are akin to a maker of oil lamps suing GE for producing light bulbs. And I refuse to pay for their cascade of lousy business decisions ( of which suing someone for ripping his own bought-and-paid-for CDs to his computer has to rank stupidest).
The people who really lose out, oddly enough, aren't the musicians. It's the middlemen between the artists and the public. And it's sure as hell not the bands of U2's stature.
Wonder if their manager gets his percentage from CD sales?
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No this is dead serious to the music industry
As a professional composer and performer who isnt in the top 1% of success and MTV rock monsters I am THRILLED that someone with clout is making these issues be vocalized. Its not the U2s and the Mettalicas that suffer, its the indie artists, score composers, and working musicians that are being destroyed by the wide open not even attempted at regulating illegal downloading of all kinds of media, including music, song & albums, films, art, scores, etc
Thank you Mr. McGuinness for bothering to talk about the issues that are a nuisance to you but are life threatening to thousands of us!
I also was a dot com boom programmer and I was an original pre-IPO member of InfoSpace and I understand the tech side very much. I will say that what happened is a natural evolution of technology and human nature. Clicking on files and getting that intellectual property of another person was SO EASY and since it was just digital it felt to have to real value. But we all listened to those MP3s and watched those quicktime movies. And we LOVED the fact that we could stuff a 200 gig firewire drive to the brim with all the music we ever wanted to listen to and not pay a dime. If you didnt do it on some level you are probably either a priest or someone without internet
And so Mr McGuinness is saying lets not blame individuals and human nature, but something MUST be done about this and soon before we lose many facets of modern art and culture to the destabilizing and deflation of its economy.
Its no joke and its not like yea yea whatever, its like EMERGENCY *DINGDINGDING* EMERGENCY. Right now the AFM (musicians union) performance fund (which is the fund for retirement and emergency funding for professional musicians) is about to die, because it is based on CD sales. There are *countless* programs similar to this that are dead or dying quickly because of illegal downloads.
Certainly non-"mainstream pop" art forms like non-synthesizer orchestral film music, among many others are going to become extinct and then fade away completely the farther this goes without being checked.
There absolutely needs to be legislation that forces ISPs and tech companies to create technology to stop non-paid-for illegal downloading of music, film and art. This would be relatively very easy to create. All it needs is ubiquitous agreement and cooperation from all sources that host and transmit data.
Without it our world is going to become a shallow grey world without culture and professional art. That is a place I don't want to live in.
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who knew?
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Futurist's comment on Paul McGuinness rant
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Bottom Lining It - Someone has to
Fact Restated: "blaming the guys who paved the road on which the [stolen] car was driven" is the same as blaming the ISP for file sharing copyrighted media.
Facts Needing Stated: The roads are policed by authorities; that authority given by the people, the users, the citizenry. The cyber-world is as policed as the real world so comparisons between them have inherent holes.
I do love the fact the web is quite unregulated. AND, my heart is certainly not broken for the music industry (what comes aroudn goes around). But if want to apply real-world analogies to the cyber-world, should we put them on a even playing fields? Should we police the cyber-world like we do the real world? These are just questions, but quite valid!
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Re: Bottom Lining It - Someone has to
The cyber-world is NOT as policed as the real world so comparisons between them have inherent holes.
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bottom lining it - the internet is unregulated my bum. the USA has a consenting adult porn witch hunt going on right now which is revolting.
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The real gripe of U2
Generosity increases profits, greed does the opposite. An open hand can hold more money than a clenched fist. I used to think U2 was pretty cool and smart, although stuck in a rut artistically since 1990... Now I know better. The fact that people are sick of $18-$20 CD's and iTunes at pitiful 128bit "quality" would make a smart industry up quality and lower prices.... Even hippies and Deadheads know that, and creating and running the Internet is nothing to be ashamed of either IMHO...
altscribe
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some concern for all future artists...
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Re: some concern for all future artists...
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Re: some concern for all future artists...
Like it or not, money is directly involved in the production of popular music - the framework of the entire system is structured around it being a commodity, something to be bought and sold, regardless of whether or not you consider it an "art form". The fact that it WAS a functional market/industry is what separated the music world of as far back as the 1930's from today's- in which most people simply just do not see that great of a reason to pay for their music anymore. Let's face it: with a connection to the internet and some technological prowess, it's incredibly easy to find an artist's music online and obtain it for...
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Re: Re: some concern for all future artists...
Yes, practically anybody can throw some songs together in GarageBand and upload them onto a Myspace, or make them freely available via a personal blog - yet for exactly that reason there are SO MANY more artists seeking to directly catch our attention these days, both signed and unsigned... the information overload is not unlike that of advertising clutter, if you think about it. I can't help but wonder how this changes the overall value of music. The value that gets ascribed to an artist's work - to their album, to even a single song - when we're living in a cultural environment of shortened attention spans and an accelerated metabolism for music, so to speak.
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I'm being brief here, I know - there's radio airplay, blogs, free shows done as "complementary goods" to attract fans, etc. - but I think you can get the idea of what I'm trying to say here. It all leads back to the production of the songs themselves - the creation of the music, in the first place - and I'm arguing that this will cease to occur in the future if something doesn't seriously change with illegal downloading. With the weight that society places upon the value of recorded music, in other words. For better or worse (depending on your personal taste in music): there wouldn't BE a U2 if they were trying to start out in today's music industry. Of course I'm very willing to hear peoples opinions on this - most likely there will be disagreement (assuming any of this actually gets read?) and criticism, and I'd be happy to hear any and all of that. After all my aim in writing this is not to criticize you or anyone in particular, but rather to discuss this issue and (ideally) to hear out each other's opinions in an intelligible manner.
Thanks for reading.
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