It seems like it's become the "in thing" in the recording industry these days to "admit" that suing Napster, rather than working out a deal, was a "mistake" ten years ago. Of course, plenty of folks were telling them this at the time, but we were brushed aside as wackos who just wanted free stuff. The latest to make this claim is BPI's Geoff Taylor, who says he "regrets" that the industry didn't move faster to embrace online music. But, of course, Taylor and others still don't get it. They still want ISPs to police users. They still claim that piracy is a legal problem, and they still seem to get the facts wrong. Taylor claims: "There is simply no getting around the fact that billions of illegal free downloads of music every year in the UK mean that significantly less money is coming into the music ecosystem."
Except... that's not true at all. As a recent Harvard study showed, the amount of money going into the "music ecosystem" has grown -- tremendously. The only thing that's dropping is the sale of plastic discs.
In the meantime, considering BPI and others were so incredibly wrong 10 years ago, and they're only willing to admit it now, why is it that they think everyone should trust them now -- and that those of us who were actually right 10 years ago should still be brushed off as wackos who just want stuff for free? Perhaps it's time to start actually listening to those who have been pointing out new ways to embrace what consumers want to do with music in order to make more money. Otherwise, we'll be seeing the same thing in another 10 years, about how BPI's Geoff Taylor (or whoever replaces him) made a mistake trying to shut down The Pirate Bay.
Peter Davias alerts us to an article over at Indyweek noting how more and more bands are adding value in order to get fans to actually find it worthwhile to buy the album. The article includes a bunch of examples down at the end, including a limited edition comic book based on each song on an album (by the band The Hold Steady). The band Sunn O))) apparently offered up some different options, including just getting a patch with the CD... or if you bought both the CD and a t-shirt, you got the patch along with a sticker and a poster. And on and on it goes. But, what's worth mentioning here is that many of these promotions appear to be done with the record label in question. I know it's fashionable for some to claim there's no need at all for a record label any more, but I still think there's a place for labels in helping the bands that don't want to figure out these business model issues themselves. It's just that the old "model" of bands signing away everything to those labels is likely to change drastically. Still, it's nice to see more and more record labels recognizing that the way to sell these days is to provide additional value beyond just the music.
In the last post, I showed the video of my presentation at the NARM event full of music industry and music industry retailers. I recognize that not everyone wants to sit through a 30 minute presentation (even though I promise that it goes quickly!), so I did want to highlight two parts of it separately, here in text, that I think are worth calling out. Both show companies that seem to (implicitly or explicitly) recognize what we talk about in terms of enabling artists to better connect with their fans and give those fans a reason to buy -- Topspin and Nettwerk. We've certainly talked about both in various posts, but execs from both companies were kind enough to share some data on some of their experiments that have not been reported elsewhere, and which I thought was worth sharing.
Topspin, of course, has built up a platform to better enable artists to both connect with fans and to give them a reason to buy, and has been able to work with some fantastic artists, both big and small, including Eminem, Paul McCartney, the Beastie Boys, Metric, Beck, Van Hunt, David Byrne and a bunch of others as well. The exciting thing is the level of success Topspin has found with these artists:
The average transaction price across all Topspin artists has been $22. Compare that to the average price of a CD, which remains between $12 and $14. If you give people a reason to buy, they're willing to pay more. It's obviously not just about "getting stuff for free" as some contend.
Even better, two separate artists using TopSpin have found that their average transaction price is between $50 and $100.
Finally, one artist using Topspin has found (amazingly) that the average transaction price from what was being offered was greater than $100.
And, on top of that, on one recent project, they found that 84% of the orders were premium offers (meaning above the lowest tier).
The idea that people just want stuff for free? Debunked. Give people a reason to buy in the form of real value they can't get elsewhere, and they absolutely will. About an hour after my talk, Ian Rogers, CEO of Topspin did a keynote interview at the same event. You can watch it here:
Separately, we've definitely been quite impressed with what Terry McBride has done lately with some artists who work with Nettwerk, the indie label/artist management company. Terry's very much been a believer in the mantra of connecting with fans and giving them a reason to buy, and has even talked about how the whole concept of copyright has become outdated. His view isn't that this is necessarily a good or bad thing, but it's just the way it is, and in helping the artists he works with, they have to figure out ways to work with it. To date, that's included a lot of creative ideas for better connecting with fans and then giving them a reason to buy. One experiment he did was with the artist K-OS, who did a few different experiments, starting with allowing the fans to create their own "mix" of his latest album. Not a remix, but a mix. They released the stems of the songs before the album was released, let the fans create their own mixes, had them vote on the best, and then released two albums at the same time. One was the "pro" mix and the other was the "fan" mix. Then you could buy either one separately, or both together as a package.
The second experiment was the "pay on your way out" concert tour. Realistically speaking, this was a series of ten "free" shows. You could get in for free, but they asked you to pay what you felt was reasonable on the way out. Given the insistence by people that fans just want something for free, you would expect that very few would actually pay anything at all. Of course, that wasn't what happened.
Terry was kind enough to share with us some data from the experiment. Despite being free to come and go without paying anything, 63% of people attending ended up donating money on the way out. Now I'm sure some folks will mock this and say that he could have made more by charging everyone, but it seems quite likely that a lot more people came out to these free shows than if he had made people pay in advance. Almost two thirds of people ended up paying, totally voluntarily -- and their average donation was $6. Again, some will claim that this is low, but you have to look at the bigger overall picture. During this tour each of the two K-OS CDs were separately in the top 50 list of best sellers.
So, he gave a series of free shows that ended up bringing in tens of thousands of dollars combined (average attendance at each show was approximately 1,000 people) and it helped get a lot of people to buy both the CDs that were being offered in support of K-OS. Some people are going to nitpick the numbers, of course, but the evidence remains clear again: it's not that fans just want stuff for free. If you give them a reason to buy, an awful lot of them will absolutely buy.
To hear some in the industry tell it, the music industry is falling apart. Except, we're not seeing that at all. What we have seen is that sales of one particular element of the industry have come under much needed competitive pressure, and that's caused a few companies who relied too heavily on that area of business to finally start to recognize the inefficiencies in their business model -- which they're falsely blaming on "piracy." However, the rest of the industry is thriving. A couple weeks ago, I presented at the National Association of Recording Merchandisers (NARM) event, held in San Diego, about "success stories from the music commerce frontier," highlighting both artists and companies that were finding success, despite the "woe is me" complaints from both the big record labels and certain music retailers. Parts of the presentation come from older presentations, but about 2/3 of it is entirely new material, including the opening bit, built off of Clay Shirky's wonderful analysis of what comes next for the newspaper industry -- but applied to the music industry. The presentation itself runs about half an hour and you can watch it below (if you're in an RSS reader, click through to the page to see it):
Ah, those collection societies just never learn, do they? We've discussed in the past how ASCAP once threatened the Girl Scouts for singing songs around the campfire, but in the past few years it's been ASCAP's counterpart in the UK that's been in the news the most for things like threatening small business owners after calling them on the phone and saying they hear music in the background or threatening a stable owner for playing the radio to her horses. I guess ASCAP was feeling a bit left out. Its latest move is to claim that legally purchased ringtones on mobiles phones, playing in public places, represents a public performance for which it is owed royalties. Songwriters and music publishers already are paid royalties on ringtone purchases, but ASCAP is claiming that buying the file is entirely different than "the performance" (i.e., the phone ringing).
In the EFF's response to ASCAP, it notes that copyright law makes a specific exemption for performances made "without any purpose of direct or indirect commercial advantage." ASCAP counters that even if that's true, only the owners of mobile phones can make that assertion, but the mobile operators (AT&T, Verizon, Sprint, etc.) still need to pay up for performance rights because they are commercial entities, even if the use of the phones is not. The EFF goes on to point out how this reasoning does not mesh with the law, the case law, or the intended purpose of copyright.
On top of this, even if, in some bizarre, twisted interpretation of the law, a ringtone playing on a phone was a public performance, how would it be the mobile operators' liability to pay? That would be like saying that Apple should pay ASCAP royalties because songs it sells on iTunes could potentially be played through speakers publicly somewhere. Perhaps I shouldn't be giving ASCAP ideas...
However, this is not a surprise. It's simply the way industry groups (even those representing the songwriters, rather than the labels) have always worked. It's always about "extending" rights. That's why copyright was broken down eventually into different types of rights -- including distribution rights and performance rights, because the "old" rights didn't fit the new technologies. It's a particularly obnoxious trick to claim that, because a single file can be used in multiple ways (for both distribution and performance), it is now subject to both types of royalties. The only reason those separate royalties were broken out in the first place was due to angry demands from these sorts of groups about how the old "rights" didn't cover new media versions of content. To then double back and claim multiple coverage is beyond obnoxious.
As a whole bunch of you have sent in, the musician Moby has put up a blog post where he suggests the RIAA should be disbanded for its $1.92 million win over Jammie Thomas. While (unfortunately) he gets a few of the facts wrong (they didn't sue her for $2 million, but it's what the jury chose -- though it is accurate that the RIAA has clearly suggested it has no problem with the statutory rates for infringement in the past), his overall point is sound. It's ridiculous that the RIAA thinks this is the proper strategy:
argh. what utter nonsense. this is how the record companies want to protect themselves? suing suburban moms for listening to music? charging $80,000 per song?
punishing people for listening to music is exactly the wrong way to protect the music business. maybe the record companies have adopted the 'it's better to be feared than respected' approach to dealing with music fans. i don't know, but 'it's better to be feared than respected' doesn't seem like such a sustainable business model when it comes to consumer choice. how about a new model of 'it's better to be loved for helping artists make good records and giving consumers great records at reasonable prices'?
i'm so sorry that any music fan anywhere is ever made to feel bad for making the effort to listen to music.
the riaa needs to be disbanded.
This isn't new territory for Moby. Way back in 2003, he got angry after finding out that some of his songs were being used by the RIAA to sue people, and stated: "I'm tempted to go onto Kazaa and download some of my own music, just to see if the RIAA would sue me for having mp3's of my own songs on my hard-drive."
Still, we're seeing more and more artists react poorly to the RIAA, who still claims to represent them. Why is it that our politicians still buy that clearly incorrect story?
It's been interesting to see the aftermath of the Jammie Thomas $1.92 million ruling, as it appears that even the RIAA is recognizing that such an insanely large award gives them something of a black-eye and has the possibility of creating a bit of a backlash. However, apparently they forgot to send out that message to all of their usual attack dogs. In an AP article discussing the ruling and the $1.92 million number with a variety of different people, the RIAA tried to distance itself from the number, specifically stating, "That was not our number, that was what 12 regular folks rendered." Uh, yeah, except that the RIAA has long used the statutory numbers in their arguments about the "risks" of file sharing.
Tom Sydnor, from the Progress & Freedom Foundation (PFF), a loud and proud supporter of stronger copyright at every turn (and who is well funded by the RIAA labels), apparently missed the memo on playing down the number. He told the reporter that it was a perfectly reasonable number.
"Legally acquiring a license to give copies of a song to potentially millions of Kazaa users might well have cost $80,000 per song,"
Except... that's not even close to accurate. The record labels presented no proof that she gave the song to millions of users, and seem to totally ignore the fact that these songs were available from tons of other sources (either legally or illegally) for prices between nothing and $1. To claim that the record labels would literally consider an option to license a single user putting a song into a shared folder at $80,000 is simply ridiculous.
But, of course, it shows the mentality of those paid for by the RIAA. These are the same people who accuse Larry Lessig of being a communist by taking a few statements totally out of context, and then accuse universities of supporting terrorism by not violating students' privacy and handing over their details to the RIAA.
So, if the RIAA is really serious about playing down the size of the jury award, it might want to rein in Sydnor before he says much more. If you're looking for someone to get out a message by appearing as a caricature of the evil record labels, I don't think you could find any organization better than PFF. But, that's probably not what the RIAA needs right now, unless it really wants to give the folks on the fence even more reason to leap over to the side who recognizes just how much the labels have twisted, stretched and abused copyright law over the years, totally at odds with its constitutional prescription of promoting the progress of science. Defending a $1.92 million award to the record labels for 24 songs in a shared folder, with no evidence that a single one was actually shared, is not promoting the progress. It's promoting massive greed and regulatory capture at the expense of society.
While some folks like to mock the business model examples we talk about by saying that the future is just in selling looooooooooooooooooottss of t-shirts, the truth is that while the models involve a bunch of different things, we shouldn't mock the idea of using t-shirts as part of some models. It appears that Mos Def recognizes that. As a bunch of you have sent in, his latest album is being sold via t-shirt. That is, you can buy a t-shirt that will include the album artwork on the front, track listing on the back... and a code for a digital download. And even more impressive, he's convinced Soundscan to count sales of the t-shirt as album sales. Another cool experiment.
With everyone talking about the Jammie Thomas case, someone who preferred to remain anonymous, alerted us to the fact that Mavis Roy, a woman who did not own a computer for a while, but was still sued by the big record labels, has "settled" her case with the record labels with neither side having to pay anything. We had written about this case earlier in the year. She did not own a computer on the dates she was accused of file sharing, and then when she got the legal threats from the RIAA she thought it was a joke and ignored them. Finally, some law students took up her case, and it appears they've worked out this "settlement." While Roy suggests this is a "victory" in that she didn't have to pay anything, she's right that it's not that much of a victory when the recording industry is still able to bring such bogus lawsuits to court with no penalty:
"I am still unsettled that the record companies are able to treat upstanding American citizens in this way. Invading people’s privacy and accusing people of things that don’t even make sense. It is such a sad waste of the courts time."
While it's great that she was able to get out of it without having to pay off the labels, nothing about this result provides any incentive for the labels to make sure they have actual evidence before filing future lawsuits.
It appears that the collection society for indie record labels in France, SPPF, is a bit confused about how the internet works. It's sued Google over videos on YouTube, claiming that while Google had removed a bunch of videos that were using songs covered by SPPF, many of those songs had returned! Of course, that's probably because other people uploaded them. But rather than put the blame where it's due (on the uploaders), SPPF has just decided to sue Google. Even worse, SPPF never bothered to sign up for Google's totally free program that lets artists upload content they want protected so that Google can match the content and either stop it from being uploaded or allow the copyright holder to profit by putting ads on it. So, basically, SPPF is complaining that Google won't do what Google absolutely would do if SPPF only used the tools Google has provided. And, claiming that SPPF shouldn't have to be proactive on this makes no sense either -- because how is Google to know whether the use of the content is authorized or not? This lawsuit seems like folks at SPPF were just too lazy to actually understand how Google/YouTube work and so they sued.
