RIAA Insists That, Really, The Music Industry Is Collapsing; Reality Shows It's Just The RIAA That's Collapsing

from the data-disagrees dept

I'm honored to see that the folks at the RIAA have taken the time to read our Sky is Rising report. Unfortunately, they don't seem to like hearing the news that the wider music industry is actually thriving -- because it doesn't work well with their legislative strategy (and, remember, the RIAA's main focus is on passing new legislation to help legacy gatekeeper record labels -- not in helping artists). And, this is understandable. As we detailed in the report, as well as in my talk at Midem, a popular music industry conference, the real story of the report is that the market is thriving for artists and consumers, but is much more challenging for big, lumbering legacy players. That would basically be the RIAA's membership.

Either way, I have to take issue with some of the RIAA's "criticisms" of the report, because they're pretty laughable.

The one problem? The study is highly misleading and doesn’t present an accurate or complete view of what has been really occurring in the United States in recent years.

Want proof? Instead of looking at actual sales data that is widely available, the paper looks at a global sales metric that includes a much wider range of industries outside of music.

Actually, people should read the full report for themselves, where they'll see that we looked at a variety of different data sources to see what the data said, and noted the various caveats with each of them. Oh, and that "global sales metric" that the RIAA complains about? That's directly from the IFPI -- the sister organization of the RIAA, who basically represents the RIAA's views around the world. If the RIAA does not like the IFPI's own numbers, perhaps it should have a talk within its own organization.

Moreover, we see real world examples that consistently show the importance of the “traditional” metrics for working artists. For example, although the industry has embraced the concept of broadening revenue platforms, recent work by the Future of Music Coalition show that few artists are benefitting significantly from these complementary revenue sources.

First of all, we've been huge supporters of FMC's work here and have urged musicians to take part in FMC's survey. I don't recall the RIAA helping out. But, really, the problem is how incredibly misleading the RIAA is here, and how it's deliberately misreading the results of FMC's report. The details -- as we said in our own discussion -- are that there is a lot more competition. So, for those who do not adapt or do not embrace new opportunities, it's no surprise that they face more struggles. But for those who do adapt, things are better. Even more important is that, thanks to these new technologies, services and revenue streams, we have more people who are actually able to make money from their music.

The real problem here is that the RIAA ignores the zeros. In the past, under the old system, if you weren't some hugely successful label musician, you generally weren't a musician at all. You made zero and you dropped out of the market entirely. So you didn't count. But thanks to the new opportunities, many more people can make music, release music and make money from music. But that means a lot more competition. So, sure, if you don't compete with that wider base of competition, perhaps you're going to make less. But that's not a sign indicating a decline in health of the overall market. It's exactly the opposite.

I'm reminded of the early studies when computers were first introduced into the workplace. For about a decade afterwards, there were studies that showed that, on average, offices that had computers on every desk saw productivity decline. So, some argued, companies shouldn't computerize. But that's a misunderstanding of statistics. The problem was that many companies didn't know how to properly use computers. Those that did were thriving. Those that didn't had negative results -- and when you netted it out, early on, the negative results outweighed the positive, but that turned the corner once people started to figure things out.

The same thing is happening in the music industry. Many artists are so used to the way things were that they don't quite understand how to embrace and use these new offerings. For them, life is definitely more difficult. But as more and more tools have made life easier, there's more and more opportunity, and those who do understand these things are seeing success.

And, the FMC's results seem to support that. Many artists they surveyed have seen new revenue streams from these sources, creating new forms of success. Others, have not. But it's not that the technology or some nefarious "piracy" threat is the problem. It's that they haven't fully understood the opportunities presented by the tools.

As for touring, the paper does accurately state that over a period, revenues from touring did increase. But it oddly omitted the important fact that concert revenues have actually declined since 2009. In fact, in 2010, North American concert ticket sales dropped 15%, according to Pollstar. And in 2011, despite U2 setting a record for the highest grossing tour in history, North American concert sales contracted another 4%.

First of all, the paper didn't just point out that touring revenue "increased," it points out that it tripled. In other words it grew massively at the very same time that the recording industry insisted that the "music industry" was dying. Cute of the RIAA to leave out the scale by which it grew. It is true that we did not include 2010 or 2011 numbers -- and that's simply a function of the fact that we didn't have them. The latest detailed report we had was the 2010 report showing the numbers up until 2009. And we finished the report before the 2011 numbers came out (we finished it before the end of 2011). Furthermore, it's worth pointing out that Pollstar's numbers are not the be all, end all, as they focus on the bigger venues and leave out an awful lot of interesting things happening among smaller venues. We have been working on ways to get better data there as well, but didn't have enough solid data to put anything into the report (contrary to the RIAA's claims, we were quite careful to focus on data that was highly credible, and rejected a number of reports that we saw that were less than trustworthy, even if they supported what we saw in the other data).

As for the decline in concert revenue, that would be an issue if the entire point of our report was "all the money is moving to concerts!" But it wasn't. The report was looking at the overall industry, and showing how consumers are spending more money overall, and that the industry is healthy. Frankly a decline in concert revenue over the past couple years is neither surprising nor a major concern. Some of the bigger touring acts have been experimenting with increasingly high prices for concert tickets, and eventually they were going to hit a ceiling and face some pushback. The latest Pollstar numbers suggest they may have found that ceiling. Separately, the data corresponds with a global recession (remember that?) where people may have decided to hold back on what seems like more of a "luxury" -- which includes things like going out to an expensive concert.

Finally, the original paper by Mr. Masnick included factual errors about SoundScan data. The increase in the number of new album releases only reflects the ease with which sales even in very low numbers can be tracked today (only a single copy needs to be sold to be counted). For example, of the approximately 75,000 new albums released in 2010, about 60,000 sold less than 100 copies each, and a mere 1200 of them (less than 2% of the total) accounted for 87% of all new release sales.

Notice the RIAA does not actually say what "factual errors" were in the paper. And that's because they can't. To claim that the increase in new releases is only because of better counting by Soundscan defies reason. For example, TuneCore does not report results to Nielsen Soundscan and it puts out a hell of a lot of releases. Similarly, CDBaby/Disc Makers points out that Soundscan doesn't count its releases either -- which number around 50,000. But even looking at just the Soundscan data, it's foolish to believe that the increase "only" comes from better counting. The ability to record and release an album today is easier than ever before, and with more musicians doing exactly that, pretending that there isn't more music being made today than in the past is just silly.

As for the "low sales" of certain albums, I'm not quite sure what point the RIAA thinks it's proving there. As we noted, much of the opportunity was in moving away from record sales, and in encouraging other business models. That artists are recognizing that, by relying less on direct music sales, seems to support our position, not go against it.

The problem is that the RIAA is, once again, focusing solely on the revenue stream that the labels earn on, rather than what's actually happening in the wider industry.

Regardless of the metrics you choose, the trends in the United States have been clear, with a market less than half as large as it was 10 years ago and 60% fewer employees in the music business.

Um, but that's wrong. First of all, the "market" that is "less than half" is merely the market for recorded music sales. As the paper shows -- and the RIAA does not dispute -- the overall market and the amount of money being spent, has continued to increase. It's just that it's going into different parts of the industry. The parts the RIAA doesn't control. The 60% fewer employees number we debunked a few weeks ago, when the RIAA made the same claim. It represents employees at the legacy gatekeepers: the major record labels only. The major labels have decreased employment from 25,000 to 10,000 people total. First of all, note just how small this is. And this is all of the major record labels. But that does not represent all employment in "the music industry" not by a long shot.

Also, over this same period, the major labels went from the "Big Six" to the "Big Five" (UMG buying Polygram) to the "Big Four" (Sony and BMG merging) to the "Big Three" of today (Universal buying EMI). With so much consolidation, is it really any surprise that overlapping positions might get killed off? Furthermore, as was the point of the entire report, the music industry is changing. The sale of recorded music is no longer the primary driver, and much of that revenue has moved elsewhere. So, um, duh, there will be fewer jobs at the buggy whip makers major labels. But that's a problem for the major labels. It's not a policy problem for the government nor is it a problem for the wider music industry.

Virtually every neutral academic study (overview here) has concluded that there is real harm to the music community when people download music illegally. 

First of all, that is not a summary of "every neutral academic study." It's become the new go-to talking point for the industry to point to that Liebowitz paper and I've been spending a lot of time going through the details for a future post, but rest assured that it's a joke. And, at best, even if you take many of the claims in that paper at face value (and you shouldn't, because they're laughable), all it discusses is the impact on record sales, which again is just one part of the market. With the money shifting to other parts of the market, the only ones this is a problem for... are the major labels who make up the RIAA.

Either way, we're glad that the RIAA decided to check out our study. If they had attended Midem, they could have enjoyed the rather enthusiastic response the report received from numerous musicians and independent labels I spoke to. Lots of folks are excited about the opportunities the world enables today. It's just too bad the RIAA is looking backwards, rather than forward.

Filed Under: music industry, recording industry, sky is rising, stats

How Much Of The Collapse Of Recorded Music Sales Revenue Was Due To The End Of Illegal Price Fixing?

from the just-saying.. dept

Harold Feld has made a very important point that has been totally ignored in the debate over the state of the recorded music business. In Cary Sherman's diatribe about how the evil tech industry is destroying the music industry, not only does he pretend that recorded music is representative of the wider music industry's situation (it's not... at all), but he seems to have carefully chosen the date of 1999 as his starting point for the supposed "collapse." Why? Because in 1999 the major record labels (i.e., exactly who the RIAA represents) were charged with illegal price fixing... a practice they then agreed to cease. And, of course, when you stop price fixing, generally speaking your revenue goes down:

This is important because in 1999, according to the Federal Trade Commission (FTC), the major labels were engaged in an illegal price fixing scheme. The major labels agreed to discontinue their price-fixing practices as part of settlement decree in May 2000. Not surprisingly, once the major labels stopped violating antitrust law, their artificially inflated profits declined and independent competitors saw a significant rise in profits.

This is a pretty important point. The "high point" for recorded music sales was completely artificial, not just because of a "legal" monopoly right, but because of illegal antitrust activities in the form of price fixing.

Filed Under: antitrust, cary sherman, music industry, price fixing, recording industry
Companies: riaa

SF MusicTech: A New Hope

from the a-new-day-dawns dept

I spent most of yesterday at the always excellent SF MusicTech Summit. And, as usual, I try to pull out a "central theme" that seems to come across from the overall event. This year, I actually heard a few people note that it was difficult to find a central theme this year -- but I'm not sure that's true. What struck me wasn't necessarily what was being discussed, but what was not being discussed. Unlike past such events, there was no major label presence (if they were there, they were hidden). There was also no talk about piracy. I honestly can't recall it coming up even once on a panel or in a discussion (perhaps other than Michael Robertson talking about how EMI claimed MP3Tunes was built on piracy after a judge clearly ruled the exact opposite). In fact, there wasn't even the typical "doom and gloom" talk that so often permeates these conferences.

Honestly, what struck me was the sense that the industry is finally coming through that long dark winter, and that the future is suddenly wide open in front of them. Yes, there were reasonable complaints (some of which I hope to write more about later), that there hasn't been much "real" innovation or disruption yet. But almost everyone was looking forward and thinking about all the exciting things that could come next. It really felt like an awakening of sorts, where people are finally realizing that the major labels no longer have the power to be bottlenecks, and that the playing field is wide open with opportunity. Lots of people recognize that there's a long way to go and lots to be done, but it really was the most optimistic "music" related event I've ever been to.

So the central theme that I started noticing was a simple one: lots of people in the industry are done with complaining, and they're ready to move forward. That can only be described as good news.

Filed Under: hope, music industry

Former Google CIO & EMI Digital COO Guy Explains How File Sharing Is Good For Artists

from the oops dept

In April of 2008, EMI hired Doug Merrill away from his Google CIO position to lead the company's digital efforts. As we noted at the time, this actually seemed like an opportunity for EMI to really embrace what the technology allowed, though we feared whether he'd have any real power at EMI. Indeed, it wasn't too surprising to see him leave less than a year later, without a clear explanation at all. We'd heard some rumors of a bit of a "culture clash," and it appears that Merrill is finally confirming that in a recent speech he gave. What was the culture clash? Well, Merrill, like a typical Googler, decided to actually look at the data and found that it said file sharing could be good for artists and that users of Limewire were their best customers:

Merrill profiled the file sharing behaviour of people who used Limewire against the top iTunes sales and the biggest iTunes buyers were the same as the highest sharing “thieves” on Limewire.

“That's not theft, that's try-before-you-buy marketing and we weren’t even paying for it… so it makes sense to sue them,” he said wryly.

Not surprisingly, as we've noted over and over again, this sort of data and evidence (of which there are now at least half a dozen studies all saying the same thing) is simply not something that the major record labels are willing to hear. They just continue to deny the evidence. And then they wonder why they're flailing... Merrill apparently didn't talk about his departure from EMI, but it's not difficult to read between the lines.

Filed Under: customers, douglas merrill, music industry, sharing
Companies: emi, google

Marketing Music Through Non-Linear Communication: Accepting The Full Reality Of The Digital Age

from the i-just-can't-hide-it dept

I'm so excited to finally present the public version of my thesis, which investigates the problem of record labels' adjustment to the digital age and provides a solution. One of the key inspirations while composing the thesis was Mike's Trent Reznor Speech at MIDEM. Throughout the two years I spent composing my thesis, some of the thesis' content was already posted to Techdirt. There was the Shpongle case-study, in which a band went from yelling at fans to embracing them in a remarkable way. Then there was an analysis of the unique way in which deadmau5 connects with fans. Most recently, I posted a case-study of Fulkultur's The Ugly Dance, which is really a genius way to get your music discovered. Oh, and there was a white paper with music business model case-studies, but it was not directly related to my thesis. Thank you, Mike!

Today however, I can finally launch the entire thesis! It is free, it should be shared and I would love for folks to remix it!

Go for it.

Personally, I have some favorite findings that I will further explain here on Techdirt.

The "Pirates-Buy-More-Music" Chart



This chart seems to indicate that there are different groups within pirates. As is obvious from the chart, the group on the left side is more likely to have bought music recently than 'non-pirates' (people who engage in filesharing less than once a month or never). I thought this was an interesting result from the survey, especially since some people are generally too quick to disqualify pirates as economically interesting music consumers.

One size price fits does not fit all

I asked surveyees to respond to the statement "One US dollar ($1.-) is not too much to ask for a song." This resulted in two groups that were almost evenly split. Around half of the respondents agreed, and the other half disagreed. This indicates that prices of music should perhaps be much more variable than they are today and real attention needs to be paid to one's target group when trying to sell copies.

Instead of inventing numbers to argue how things should be - as a marketeer, I'm much more interested at looking at the reality and using that reality to maximize the potential. So what do you do when your business model (that relies on control) gets disrupted through peer-to-peer filesharing and other types of non-linear communication? You adjust to the new reality and make use of that non-linear communication.

The solution that originates from this non-linear communication is 'the ecosystem' and this excerpt from my thesis probably describes it best:

The ecosystem is an active fanbase which is interconnected through non-linear communication. This means producing a story worth telling to turn the internet's non-linear communication and loss of control over distribution into an opportunity to get discovered. The second step is retaining the attention by connecting with listeners and connecting them to each other like the host of a party would with guests. Turning the ecosystem into a fun party helps energize the fanbase and amplifies the aforementioned "story that's worth telling". Marketing opportunities come from listening to the ecosystem and releasing the products they want, as opposed to the classic approach of pushing the product that you want them to buy. Internet-enabled concepts such as pre-ordering and digital releases allow labels to offer their ecosystem abundant choice to play into all the different expectations regarding price and product characteristics. This most likely will involve a mix of (feels like) free and publishing products or services that are better than free.

The answer is the ecosystem. Note that in the below picture, both the artist/label as well as the target audience are part of the same ecosystem.

Filed Under: connecting with fans, music ecosystem, music industry, piracy

Universal Music Goes To War Against Popular Hip Hop Sites & Blogs

from the bizarrely-misguided dept

A few weeks ago, leading ad firm GroupM, a part of marketing giant WPP, proudly announced that it had "adopted an aggressive new anti-piracy policy" for its digital media buys. What that meant was that it prohibited vendors that it worked with from putting ads on any of a giant list of sites that it had declared were "pirate sites" -- defined as "sites that support piracy or contain any illegally distributed content." That's pretty broad. In fact, TorrentFreak got their hands on the list and noted many rather bizarre entries, including the Internet Archive (archive.org) and BitTorrent's corporate page -- neither of which have anything to do with "piracy" at all. There are some other shockers on the list, including the popular web video site/YouTube alternative, Vimeo, which is about as far from a "pirate" site as you can find. Stunningly, there's also SoundCloud, which has become one of the most popular tools for musicians to promote their own music these days. That's the site where the Beastie Boys streamed their latest album. A pirate site? Are they crazy? You can see the full list embedded below.

While there are many oddities on the list, we wanted to explore one aspect of the list, which is that it appears to show that Universal Music has decided to declare war on the online hip hop ecosystem that promotes its music in a big way -- and some of those sites are hitting back. First of all, it's worth noting that these blogs and sites are considered instrumental to promotion in the hip hop world, and Universal Music knows that. In talking to some of the folks at sites involved, you learn pretty quickly that they get sent tracks and other promotional info from insiders at Universal Music -- including high level execs -- all of the time. On top of that, hip hop artists themselves regularly rely on these same sites, and link people to them via their own blogs and twitter feeds. And yet, a whole bunch of these sites are on GroupM's list... and they got there because Universal Music told GroupM to put those sites on the list:

GroupM's own content producing clients -- such as Warner Bros, Paramount, Universal Music and Summit Entertainment, which produced the popular Twilight series of vampire movies -- have shared their own lists of pirate websites to help create a master copy.

While I don't know which of those companies may be responsible for some of the other headscratchers on the list, the attack on hip hop sites is being pinned squarely on Universal Music by many of the sites involved, and they're not happy. Among those on the list, for example, is Vibe.com, the online site for Vibe Magazine, founded by Quincy Jones of all people, and still considered one of the key sources for news and information about the hip hop and R&B worlds. And yet it's on the list as a pirate site? Really?

Back in 2009, Vibe produced a big list of the "50 hottest rap blogs." This is basically a who's who list of the top sites in hip hop, and the places that most music producers want to see their music appearing, because it's how they get attention these days. Yet, if you run down that list, you start to notice a pattern. An awful lot of those sites are on GroupM's "banned" list. I went through the top 12 sites on that list, and seven of them are "banned" as piracy sites, despite being some of the most popular promotional vehicles for artists and labels alike. Also, a bunch of the top hip hop blogs teamed up a while back to form what was called the New Music Cartel -- and every one of those sites is on the "banned" list.

And, of course, that Vibe list is a couple years old. There are plenty of other top music/hip hop sites that for unclear reasons were also put on the list, and they're not happy about it. For example, there's Complex, an up-and-coming and incredibly popular lifestyle magazine for the 18-34 male demographic. Somehow, they're on the list, and the magazine/site's editor-in-chief recently took his frustration to Twitter, calling out Universal Music and saying this means Universal Music will get less coverage:
Other sites on the list are similarly pissed, though not everyone's willing to talk about it publicly. The ones who should be angry are the musicians who rely on these sites to get their works heard, to build up a fan base, and to become popular, because Universal Music is making that more difficult for them. There are mixed opinions as to why Universal Music is attacking the hip hop blog ecosystem. There's the "left hand/right hand" ignorance theory, in which the lawyers at Universal Music who helped put together this list are so disconnected from reality that they don't realize they're trying to shut down the very sites that the promotions side of the business (and the artists themselves) rely on. There's also the more nefarious theory that Universal Music is sick of having to rely on such sites for promotions, and is seeking to shut down a bunch of them to limit where it can focus its promotions efforts -- perhaps even trying to prop up a few "friendly" sites that it wants to rule the market, over the competition.

Either way, this seems like more evidence of how ridiculous it is to claim it's easy to define "rogue sites." Given the chance, it looks like Universal Music has defined it as sites it doesn't like. The fact that this list includes all sorts of sites that clearly are not piracy sites should give anyone who supports bills like PROTECT IP pause. Defenders of these laws like to say that it's obvious what is and what is not a rogue site -- yet here you have Universal Music and GroupM showing how that definition can be quite broad, and extremely questionable.

No matter what, it seems likely that this move is going to backfire on Universal Music in a big bad way. It's like what would have happened if a record label suddenly declared radio as "piracy" and said that its artists couldn't appear on radio any more. It suggests a company so out of touch with how people find out about new music these days that it has no business being in the business of promoting artists. It also should serve as a warning sign to any artist thinking of signing with Universal Music. Why would you sign to a label that is actively working to kill some of the best sites for promoting your music? I reached out to Universal Music, asking for some comments and answers to a few questions raised in this article, and (not surprisingly) have heard absolutely nothing in response.

Filed Under: blogs, complex, music industry, piracy, rogue sites, vibe
Companies: groupm, universal music, wpp

The Many Killers Of The Music Industry: The Digital Era

from the the-bigger-they-are-the-louder-they-bitch dept

Welcome to the second half of our rather longwinded look at the attempted industriacide committed by various music formats over the years. Part two concerns itself with the Digital Era, an era that started with the introduction of the CD, which was hailed by the industry as the "savior of the music business," right up until someone had the bright idea of "releasing" CDs with nothing on them. Read on... 

Compact Discs
If LPs and cassettes were the show ponies of the media race, the “CD” (or “See Dee”) was Manowar, Secretariat and the Four Horsemen of the Apocalypse’s horses rolled into one.

Popular, cheap to produce and yet another format to gouge completists with, the CD had it all. Distribution cost? $0. Paid out of the artists’ royalties. Production costs? Studio time? Blow? Free. All paid for by the artists. Plastic, paper, ink – all cheap. Lots and lots and lots of profit.

The music industry responded to their incredible fortune the way any short-sighted leviathan would: by steadily increasing prices. Soon customers were paying $19 for one good song and 11 shitty ones. On top of that, the new format ran 20-25 minutes longer than the LP, leading many bands to pack their albums with filler their drummer wrote. Finally, after so many other formats repeatedly “killing the music industry,” they had found a savior in a nice, cheap plastic disc.

But there was trouble on the horizon. The twin specters of “used CDs” and “blank CDs” soon cast a shadow over the hookers and blow purchased with its ill-gotten gains.

The first, “used CDs,” was decried by artists as disparate and incredibly wealthy as Garth Brooks (68 million albums sold) and Chris Gaines (1.1 million albums traded in at used CD stores). They now demanded to be reimbursed every time the album changed hands, claiming that purchasing music in this format subjected you to a vague and ever-shifting contract, filled with more rule changes than a drinking game.

The other, “blank CDs,” when combined with affordable CD writers, shoved a slightly-battered industry towards the edge of a long flight of stairs. The industry responded with more built-in fees and cries of “Home burning is killing music.” This cry was misinterpreted by various local fire departments and indie-leaning arsonists, who both quickly sprung into counterproductive action.

MiniDisc
Having learned nothing from its “Betamax” experiment, Sony forged ahead with a boldly miscalculated attempt to corner a non-existent market with the MiniDisc. Like a CD, only smaller, more easily lost/damaged and handcuffed to Sony hardware, the MiniDisc never had a chance.

Sony once again walked away empty-handed from the R&D roulette table, having shown only that early adopters will buy anything as long as it’s shiny and prohibitively expensive. Its ability to record music onto the midget-sized discs threatened to destroy the music industry, or at least kick it a little when it was safely down. The music industry responded to this pint-sized miscreant with “Awwww. The little guy’s trying to say something” and slapped it with some punitive fees.

mp3
Not content to be merely a threat to the entire music industry, the mp3′s storage-friendly compression rate and ultra-portability did what no other medium had, and actually destroyed the music industry. The music industry was now truly “fuckt,” as Mozart had so aptly put it millions of years ago. Its Rasputin-like longevity was threatened as was its Rasputin-like propensity for evil behavior. Now every Tom, Dick and Harry with an eMachine could download and dump hundreds of pirated songs onto jump drives, mp3 players and CDs with absolutely no physical effort. And, thanks to the major labels and their years of price gouging, no one was troubled in the least to see them limping into port covered in pirate wounds.

Soon the good ship “Outdated Industry” was leaking money from a million tiny holes. So-called “experts”, in the guise of lawyers and yes-men, were consulted. They all agreed on two things:

1. Something should be done at some vague point in the future.
2. Someone should be sued.

It summoned Dark Elf Lars Ulrich to attack the face of international music piracy: a certain Shawn Fanning. Coming off their most successful album to date, Metallica forged ahead in (self-)righteous indignation, alienating an entire generation of potential fans. With Napster on the ropes, the recording industry went from barn to barn to verify that all the horses were indeed missing and methodically began slamming shut door after door.

A nation of tweens and octogenarians were summoned to court and threatened with usurious fines for downloading/uploading “Happy Birthday” and other such top 40 songs. Kazaa watched in horror as its user base (which numbered in the dozens) was swept into lawsuit after lawsuit. Meanwhile, malware creators watched in horror as their remaining victims lost their internet privileges and a great deal of money, both being very key components of their continued success.

Other high-dollar performers got into the act. Madonna seeded file sharers with mp3s of her asking, “What the fuck do you think you’re doing?” Most pirates found this immensely preferable to her second-rate electronica and occasional British accent. Alicia Silverstone hastened her irrelevance by appearing in magazine ads reminding people that stealing mp3s was exactly like stealing cars, a move that upped the “cool” factor of file sharing to the Nth degree. The youth of the world, properly chastened, switched from P2P to torrents, in essence moving from joyriding to Gone in 60 Seconds.

As the industry bled out, it summoned its archangel, Bono, to appear in the “paper of record,” flatly stating that America needed to follow the lead of Communist China and track every piece of information travelling the internet. This was met with sneers of derision and cries of “Fuck you, Bono! Find some other way to finance your malfunctioning electro-lemons!”

Panicked lawsuits filled countless courtrooms and lined countless corporate lawyers’ pockets. Bills for "lost revenue" were presented to anyone who acknowledged that “music” existed. Everyone and anyone was asked to “give until it hurts,” in order to prop up a sagging multi-billion dollar industry. No one was spared. YouTube, bloggers, Girl Scouts, mom & pop stores, animal shelters, cop shops, hotels, bars and nightclubs all became notches on rent-seeking industry’s bedpost.

Nothing stopped the bleeding. The mighty mp3, victorious over King Music(k), waved its variable bit rate triumphantly, zipped itself into a compacted file and hid itself amongst the overstuffed shelves of Mediafire, RapidShare and Megaupload.

The "Cloud"
The industry wasn't done being killed yet, despite the best efforts of a new compression format. The latest and greatest thing to change the music scene was something referred to euphemistically as "the cloud." Now this "the cloud" wasn't so much "little" and "fluffy" like the clouds Rickie Lee Jones sued about so many years ago, but rather an unpicturesque rack of redundant servers. With Amazon taking the lead and Google following shortly thereafter, music fans now had a new and ultra-portable way to enjoy their music. 

The labels and various rights groups were none too pleased as these new "clouds" rolled out. The performance rights groups indicated that it was really only interested in one kind of "streaming": that of money into their pockets. The major labels declared this to be a violation of its unwritten end-user agreement, which didn't allow for music that could be accessed anywhere at any time. "Music wasn't meant to be portable," it bitched. "After all, it never has been before," it said as it looked back fondly on the heady days of cassettes, CDs, 8-tracks and MiniDiscs.

While no lawsuits have been filed yet, it can only be a matter of time before the shambling, corpse-like music industry attempts to sue Amazon, Google, et al into the Stone Age, musically speaking. Its only hope now is to return to the days before music could be carried around like so many photos on an SD card, a golden era when listening to music meant purchasing an ultra-expensive, hand-cranked phonograph, whose incredible heft required a team of child laborers to install.

So, as Big Music limps into the future, cursing the whole way, unsteadily clutching its Congressional life support system, music lovers can be sure of one thing: behind every technological step forward, there's an irate record exec dying (not literally, of course) to take everyone two steps back.

Filed Under: history, music industry

The Many Killers Of The Music Industry: The Analog Era

from the all-industry-killer,-no-filler dept

The music industry has been around for as long as anyone cares to remember, and not for a lack of trying. Industry killer after industry killer has taken a shot at bringing down this mighty foe, but it still continues to limp along, bitterly writing most of the internet community out of its will. With this two-part post, separated between the Analog Era (or "Golden Age") and the digital era (or "the Apocalypse"), we take a closer look at this rogue's gallery of stone cold killers, each one less successful than the last.

Formative Years
Ever since the early cavemen looked for ways to “punch up” their stories of the Coelacanth that “got away,” man (and occasionally, woman) has expressed himself through music.

Progress was minimal during the next several thousand to several million years (depending on religious beliefs). It wasn't until a young composer named Wolfgang Amadeus Mozart burst on to the scene that music was finally invented.

No sooner had Mozart invented music than he began to reinvent it through inappropriate hairstyles, setting his harpsichord on fire during live performances and marrying various 13-year-old cousins. His wild behavior and manic giggling led to him being credited with “singlehandedly destroying the music industry,” thus undoing all of the groundwork laid by him just earlier that afternoon.

After destroying the music industry, Mozart began to rebuild it, this time with him safely on the inside. After another manic, flaming performance, Mozart gazed into his piles of money and made an eerily prescient remark — “If ever there doth become an effortless way to perform these musicks at home, I am truly fuckt.”

Mozart relentlessly campaigned for protection of his musical ideas, which led to sheet music being horded by royalty, in order to protect their patronized income stream. However, as the price of paper, ink and quills continued to drop, an underground group of transcriptionists began distributing “copied” sheet music. A legislative effort to build so-called "royalty" fees into the price of these items had little effect on early "pirates" and Mozart was often seen hawking waistcoats embroidered with the inscription, “Verily, home transcribing is killing the musick industry.”

Fun fact: Emperor Joseph II was an avid home transcriptionist. His famous remark that Mozart’s music had “too many notes” was not a critique of the piece but rather a complaint about the pending transcription, as he was suffering from a case of “pirate’s elbow.”

Bedroom Composers
Flash forward 50 years: innovations in mass production make musical instruments more affordable than ever. Soon every saloon, bawdy house and tenement has a minimum of one piano. And it’s not just piano companies that see a boost. Manufacturers of harpsichords, claviers, pipe organs and fiddles see exponential growth.

Advances in movable press technology allow sheets of music to be reproduced faster than ever. Early ASCAP pioneers bemoan these developments and attempt to collect performance royalties from bar owners and burlesque house pimps. Even homeowners are subjected to handwritten missives declaring them responsible for “rights and royalties for performance of popular musicks.” The singing telegram industry folds thanks to the crippling fees levied against them.

The Player Piano
As the 19th century wound itself down, another breakthrough in musical entertainment surfaced in the form of the Player Piano (or Auto Pianist), a piano that amazingly “played” itself using perforated paper. (This form of “musick” would later resurface rather noisily in dot-matrix printers.)

Bawdy house proprietors and saloon owners benefited greatly from this invention, firing their drunken, incompetent piano players and replacing them with slightly less drunken and dimwitted paper-loaders (usually an unattended child). The tireless tones of the Mechano-Piano were the soundtrack of the “Gay ’90s” and the less-unfortunately named “Nondescript Aughts.” As usual, this new invention, with its user-friendliness and low-cost, was saddled with the burden of “destroying the musick industry, starting with the extraneous ‘k’.”

Records
The invention of the phonograph by multiple people (and its resulting patent suits) proved to be the “death blow” for the music industry, with its ability to reproduce the sound of a miniature, tinny band playing in your anteroom. No longer could people be expected to leave the house to simply hear music and the resulting struggle for market share saw tours bloom into full-blown juggernauts of light, sound and outdoor toilets.

The record brought music to the masses in a handy 12″ or smaller package, which most men found non-threatening and women found non-overwhelming. These flat discs could hold more than 20 minutes of music per “side” and were played via a “stylus” or “needle” when not being used to sort seeds and stems.

Due to its multiple formats and speeds, the record had something for everyone, from Jethro Tull 4-disc opuses to Flexi-discs from local punk bands whom no one other than the band members ever cared about. The record seemed to be the zenith of home audio. However, a change was coming, much like the prophet Bob Dylan warned, and the musical media landscape would never be the same.

Fun fact: Audiophiles still cite the medium’s “warmth” and “crackliness” as preferable to those formats that don’t make your music sound like it’s being performed in a fireplace.

8-Track
During the mid-’60s, the music industry added another “horse” (and possible "industry killer") to the race: a three-legged Clydesdale called the 8-Track. Its peculiar formatting and general hideousness did nothing to endear it to the general population and its reputation was further harmed by its performance in auto-reverse decks, where changing from Side A to Side B resulted in a violent action that registered in the low 5′s on the Richter Scale and frequently left small children and pets dazed and bleeding.

Perhaps sensing that this format would never achieve the success of vinyl or sheet musick, the music labels altered their distribution scheme and began shipping 8-tracks directly to swap meet vendors and pawn shop owners.

Cassettes
Highly touted by everyone (but audiophiles) as more “portable” than records, if slightly less useful, the cassette soon proved to be the “medium of the people.” Blank cassettes, in particular, had universal appeal as even novices could record their bulky records or capture “streaming audio” via the radio. They could then give these “tapes” to anybody, including friends, family and that chick they were trying to score with.

Widely hailed as the “death of the music industry,” cassettes soon became a ubiquitous feature of shoulder-mounted boomboxes, which were replaced with slightly less spine-maiming Walkmans. The Walkman also added a headphone jack, thus allowing the user to keep their shitty music to themselves while blocking out your stream of obscenities as they repeatedly roller-skated over your foot.

Despite cassettes and home taping having been fingered for “killing the music industry,” (usually in the form of t-shirts, bumper stickers and PSAs), the music industry enjoyed the monetary reward of having three “horses” in the race, not to mention the royalty fee levied on blank cassettes (aka, The Hissing Killer).

Stay tuned (ha! that's probably some sort of radio joke!) for the thrilling conclusion of this breathtaking series, overdramatically titled "Part 2".

Filed Under: history, music industry

Oh Look, The Overall Music Industry In Canada Has Been Growing As Well...

from the and-so-it-goes... dept

We've discussed many, many times how the recording industry is merely a subset of the music industry, and it's quite unfortunate that many (including in the press and among politicians) seem to think that the recording industry is the music industry. However, if you actually take a look at the larger view, you quickly realize that almost every other part of the music industry has been doing quite well over the past decade. It's really just the recording industry part that's struggled. In fact, we've pointed to studies covering the UK, Sweden, Sweden and Norway which have all seen their overall music industry grow.

Even more importantly, in all of those, musicians themselves were making a lot more money than before. That's because the shift in the industry was towards markets and business models where the artists were able to collect the money, rather than a gatekeeper who kept most of it (i.e., the record labels). In an excellent article for the Toronto Globe and Mail, by professor Dwayne Winseck, which details all the problems with the copyright reform proposals in Canada, Winseck also does the same analysis for Canada, and once again finds that pretty much every other area of the music industry is growing: When you look at it that way, you begin to realize that perhaps the only real issue is that one segment of the industry is becoming obsolete. But the other parts of the industry are more than making up for it -- indeed, the larger music industry has grown from $1.26 billion to over $1.4 billion. So why are we wasting so much time around the globe trying to pass laws to buck up that one obsolete segment? And why do politicians and the press buy this false story that the industry is in trouble?

As Winseck notes:

Ultimately, only once the myth that the music industry is in peril, and that it is the canary in the coalshaft for all media, is discarded will we get copyright laws fit for these digital times.

Filed Under: canada, copyright, copyright reform, growing, music industry

RIAA Two Top Execs Made $4.8 Million In 2009; How Many Musicians Could That Have Funded?

from the just-wondering dept

As a whole bunch of folks have been sending over, RIAA President Cary Sherman made $3.2 million in 2009 -- the highest paid "non-CEO staffer who is a federally registered lobbyist in a tax-exempt organization" by more than double. Meanwhile Hypebot adds in the details that Sherman's official "boss," RIAA CEO Mitch Bainwol made "only" $1.6 million that year. Kinda makes you wonder what exactly the two of them did that deserves that kind of cash. Presided of an industry that's collapsing? Got Congress to pass new laws that didn't help and really only served to make things worse? This seems like pretty strong evidence that the labels, perhaps, should be giving less money to the RIAA. After all, we keep hearing about how the labels don't have enough money to invest in new artists these days. You could make quite a few new albums for $4.8 million. And I doubt the RIAA would do much worse without Sherman or Bainwol around. Hell, the RIAA could pay me half of that, and I'd actually help them move forward, rather than trying to keep pretending that they can bring back 1990.

Filed Under: cary sherman, music industry, salary
Companies: riaa