Dear Recording Industry: Stop Whining, Start Making Money

from the thanks,-the-rest-of-us dept

Tue, Nov 18th 2008 9:30pm — Mike Masnick

In the past we've linked to some of Ian Rogers great presentations at music industry conferences, and now he's done it again. At a recent music industry conference, he told the assembled industry execs to basically stop whining about "losses" due to piracy and start making money. While I don't entirely agree with what business models will eventually be successful, Rogers makes a few key points in showing how musicians are making more money than ever before by figuring out ways to connect directly with fans, and not worrying about how many CDs they can sell.

It's worth reading through the entire presentation, but the key points he makes: the industry has changed, and the record labels no longer have a monopoly on distribution, and it's time they got over thinking that they can stuff that genie back into the bottle. Instead, they need to realize that people are spending more than ever on listening to music -- just not on buying CDs. Once they realize that, they need to get into the game, but do so by realizing that, as labels, they no longer have total control. In fact, it's now the musicians and the fans who are in a position of power, and the role of the labels should be to help enable the connection between musicians and fans.

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: business models, ian rogers, recording industry

25 Comments

If you liked this post, you may also be interested in...

Reader Comments

Subscribe: RSS

View by: Time | Thread

Mr Big Content, 18 Nov 2008 @ 9:58pm

Illegal Change
The recording industry can't change. The laws were put in place to safeguard a particular market situation. If the market situation changes to make the laws irrelevant, then that's illegal. Everybody trying to play in the changed market should be put in jail.
[ link to this | view in thread ]
Mints Jr., 18 Nov 2008 @ 11:10pm

Re: Illegal Change
What laws? How is it illegal for musicians to make their own music available for download from their own websites? How is it illegal for a musician to let a company like CD Baby work with iTunes to distribute their music? If you're referring to pirating, not all downloads are pirated (see iTunes). While iTunes is an imperfect model, it is a step in the right direction. I can only speak for myself, but I would much rather pay for a download knowing that most of the money goes to the person who created the music, rather than pay for a CD where I know only a small fraction of the music goes to the musician. Record companies have their place, but being the strong-arm middle man is not something to be proud of, and it certainly shouldn't continued into the next generation. Robber barons, anyone?
[ link to this | view in thread ]
zcat, 18 Nov 2008 @ 11:19pm

except for iTunes
iTunes is more of an attempt to force the "CD Singles" model through a network connection. Selling songs for $1 each and trying to stop people from sharing them (iTunes / fairplay) is still thinking that they can stuff that genie back into the bottle. Letting people share the music as free advertising to build a fanbase and then selling things that can't be shared on p2p, the signed, limited edition boxed set or the backstage pass, is the new model.
[ link to this | view in thread ]
Deb, 18 Nov 2008 @ 11:41pm

I buy a lot of music. I share with my friends, they share with me. Because of this, I've spent several thousand dollars over the last few years going to concerts I never would have seen, buying merchandise I never would have bought, etc.

Same goes for them. I didn't think I'd like X artist, so I didn't buy the CD. Then someone sent me an mp3. Dude. I loved it. Bought the songs I liked from iTunes (the iTunes plus, drm free section) and went to a concert, etc.

That artist made a nice chunk of change from me, and the 3 friends who were also introduced to the music by sharing. Money he never would have gotten if I didn't get an email and a file saying, "Listen to this!"

The moral of the story? Artists gain new fans from music being shared, and fans pay to see performances and buy crap to remind them of a great show and a good time. A hell of a lot more money than they would make from me not buying a CD (or going to a show, etc) because I don't know who they are.
[ link to this | view in thread ]
46, 19 Nov 2008 @ 12:25am

nourish
$1 mp3, that's like mayonnaise-smeared picture of a sandwich. And they drag people to courts over it. What's wrong with you? Is it better to have people wanting for more quality music, or people like my mom, that had listened to only 2 CDs all their life?
[ link to this | view in thread ]
mike allen, 19 Nov 2008 @ 12:28am

music
I agree with bob post 4 if people cant hear the music before they buy they wont buy. Unlike other commodities music means different things to different people and tastes vary. People also want the freedom to use that music any where and i include on home movies on you tube for example. the major labels are behind the times. one band even sponsored a competition on you tube using one of their songs well done two loons it got them known to thousands of new fans.
[ link to this | view in thread ]
PaulT (profile), 19 Nov 2008 @ 12:59am

I'll reiterate what I've said before: I stopped listening to music for a while due to 2 factors - the stagnation of the mainstream, and the high cost of CDs (even $10 is a lot to spend on an album if you don't like 90% of it).

Now, I spend at least $30 on music every month. What changed? I joined eMusic, discovered numerous free podcasts and started using AmieStreet. The latter two allow me to discover new music at no cost. eMusic's subscription model encourages me to max out my downloads every month, usually by trying out new artists I would otherwise ignore. I also make a point of downloading albums based on the NIN/Radiohead model, and I end up paying for most of them.

So, not only am I spending more money than ever on music, but I'm also discovering new artists who I'll see in concerts, buy merchandise, etc. that I'd otherwise not have heard of. Of course, these avenues are completely ignored by the major labels...
[ link to this | view in thread ]
vinod, 19 Nov 2008 @ 1:00am

digital music
I exclusively use itunes because I use my iphone, ipod, and my mac mini all the time. Front Row is always in use at my house in the living room - I hate the DRM - but I deal with it. I hate CDs. I think the format is ridiculous and they are way overpriced. Why should I wait to buy music when I can buy it digitally? Makes no sense.

The way to fix an "iTunes model" is to make ALL music DRM free. MTV took over sharing music from the radio, and the internet has taken it away from MTV. The way to monetize it (and stop piracy) is to allow music files to be "shared", but to have a "time out" after a week or so.
[ link to this | view in thread ]
SteveD, 19 Nov 2008 @ 1:50am

Re: Illegal Change
I can't figure out if your being serious or not.

Markets change all the time, there's nothing illegal about that.

If a business is unable to change with the market it fails, there's nothing illegal about that either. It is the fundamental nature of a free market.
[ link to this | view in thread ]
Twinrova, 19 Nov 2008 @ 4:05am

Don't expect changes anytime soon.
[ link to this | view in thread ]
Twinrova, 19 Nov 2008 @ 4:08am

Don't expect changes anytime soon.
Given the weakness of this industry, I fully expect to see them appear before Congress asking for bailout money.

And they'll get it, too.

I've said it before and I'll keep saying it again: It's the consumers at fault for the failure to enforce changes as they continue to buy products using the old model.

We'll continue to read these blogs for years to come.
[ link to this | view in thread ]
Twinrova, 19 Nov 2008 @ 4:09am

Re: Don't expect changes anytime soon.
Oops. Enter instead of tab.

Any reason why a blank comment would go through to begin with?
[ link to this | view in thread ]
Liron Shlomo, 19 Nov 2008 @ 5:21am

Re: Re: Illegal Change
For your second question, see, it can and is illegal for musicians to make their own music available for download from their own websites because THIS WAY RECORD COMPANIES ARE MAKING LESS MONEY.

And that's the law.
[ link to this | view in thread ]
AJ, 19 Nov 2008 @ 6:30am

Re: Re: Illegal Change
We at the Buggy Whip Trade Association are staging a comeback and demand EVERY automobile owner now be required to purchase at least one Buggy Whip for each automobile. Its not our fault that our wonderfully designed, adequately researched and flawlessly made whips are not in demand. We have promised OODLES of money to Congress for passing legislation to restore our market. Thank you.
[ link to this | view in thread ]
Chuck Norris' Enemy (deceased), 19 Nov 2008 @ 6:36am

Sometimes all people want to say is in the subject line
[ link to this | view in thread ]
Huh?!, 19 Nov 2008 @ 6:47am

Re: Re: Re: Illegal Change
I'm sorry for not being completely in tune with these laws. Could you please cite and state the precise law that would make it illegal for an individual to create art and distribute his own creation via a website or any other media? For a second I thought I still lived in America, the land of the free...
[ link to this | view in thread ]
Anonymous Coward, 19 Nov 2008 @ 6:56am

It's the control, stupid.
I have said all along that the music industry isn't really worried about the monetary loss from piracy, it is worried about loss of control. The music industry finally managed to get almost total control of music, even reducing the musicians themselves to little more than hired help and indentured servants.

There are a lot of small minds in the music industry that believe their own line that they are losing billions to piracy. Those at the heart of the industry know that the real issue is control. Unfortunately for them, the public and politicians won't buy "we want control" as an issue. On the other hand issues such as piracy, theft, and depriving musicians are issues that target the heartstrings.

I believe the current situation with streaming video is the biggest single problem for indie music, and I predict it is the thing that the industry associations will be most reluctant to give up. Right now even if an artist WANTS their music to be streamed for free it basically cannot be done through the major music services. The recording industry still gets to collect royalties on the "free" music, and chances are that they will get to keep 100% of the fee for themselves. Who is the real pirate in this situation?
[ link to this | view in thread ]
Anonymous Coward, 19 Nov 2008 @ 7:41am

...it basically cannot be done through the major music services...

Do it yourself. You do not need the major music services
[ link to this | view in thread ]
Anonymous Coward, 19 Nov 2008 @ 8:23am

screw the RIAA - To little to late.

Want my business back RIAA? Issue a full page apology in every major newspaper in America, give, YES I SAID GIVE some free music to show you are sincere and drop all the bullshit lawsuits you have with legitimate users of music they have already purchased.

Yeah right, like that will happen. I'm not holding my breath.

Death to the RIAA

RIAA - Real Ignorant Arrogant Assholes!

Not 1 cent!
[ link to this | view in thread ]
Anonymous Coward, 19 Nov 2008 @ 8:30am

iPod user...
go download dopisp (pay for it too, it's worth it!) and sync from Windows Media. Burn your itunes songs to audio cds, then re-rip as mp3. Get off the Apple grid, man!!
[ link to this | view in thread ]
Anonymous Coward, 19 Nov 2008 @ 8:32am

Re: iPod user...
Oh, wait, you run a Mac too. nevermind, I guess.
[ link to this | view in thread ]
bshock, 19 Nov 2008 @ 8:51am

Dear Recording Industry:
Stop whining, and just go away. You don't have to commit seppuku or anything like that -- just go away.
[ link to this | view in thread ]
Anonymous Coward, 19 Nov 2008 @ 9:07am

If sharing music is "free advertising" but the people who share the music never spend a dime on anything from the band how is that going to help the band?

I personally only go to about 1 concert a YEAR. I do not purchase limited edition CD sets, I do not purchase t-shirts, stickers, lunch boxes, or any other junk. I buy songs from Amazon.com, and iTunes. If the musicians want to make ANY money from me they better charge for their music because they aren't going to get my money any other way. And if you think I am the exception I can assure you taht I am not, I am in the majority here.

Most people do not go to concerts, therefor giving away music and depending on concert sales for your revenue would be a problem. Most people do not buy collector sets, t-shirts, posters, stickers, etc... Most people are like me they either buy a CD or purchase a song online.
[ link to this | view in thread ]
Anonymous Coward, 19 Nov 2008 @ 9:12am

Re:
You are wrong because techdirt readers think that they represent the rest of society. The real question is when was the last time Mike gone to a concert that cost more than $30 before fees? Hmmmm....
[ link to this | view in thread ]
Killer_Tofu (profile), 19 Nov 2008 @ 10:21am

Re:
RE #23
Here are some thoughts to help you open your mind that even if you are in the majority, it is still okay.
You may love music, but you are obviously not a true fan to almost any band. If you were you would be going to more concerts or buying t-shirts, posters, etc.
Check out most concerts. For the size of the venue they go to, they are just about always over 50% full. I certainly have not been to one that was under 50%. Actually, most of them are over 75% full, but I am going to allow for the chance that there are concerts where they book a much larger venue than is needed. The point here, is to look at all those people who DO go to concerts. You do not NEED a majority of people to pay just because they heard the music. Chances are somebody else has heard the music you listen to, and even if you are too cheap to buy a t-shirt or anything else for the bands you absolutely love (which, from the sound of it, you don't) somebody else probably has.
A band doesn't need the entire population that listens to music to pay them to continue doing what they love, they just need a decent group of true fans. However, charging for every single possible instance limits the spread of music. Why do you think people share music? Look at post#4, by Deb. I am in that boat.
I am a true fan of Nine Inch Nails. I download all of his music the instant its available. And you know what? I do go to concerts. I own a couple of t-shirts. And I STILL buy the CDs. I collect them. I am only missing one out of all of the officially produced "Halos" (if you need a definition of that, basically its a numbering system for his discs, if you want more specific, look it up). I will be buying it very soon here.
You know why? I love the music. And the guy, in my opinion, is brilliant. Thats why. And I acknowledge that for loving his music this much, I am in the minority. So what? I want to share his music with as many people as I can. He also wants as many people to hear his music as possible. At the concerts he tells us to share his music. And I do, best I can. By attempting this I have found a couple friends who were not into the music from some mainstream radio songs, but ended up into a lot of his other music. Now I am able to share that experience with my friends. It is truly awesome.

I am sorry to hear that you do not love music That much. But, it is okay that the majority doesn't. Because those who do are often worth a lot more than you ever would be to the artist.
[ link to this | view in thread ]