Reddit is a prime example of the explosive growth of online communities — and recently it's become a prime test case for the huge challenges such growth brings, especially for those who are trying to use it as the foundation for a successful company. This week we discuss some of those challenges that sit at the intersection of community and business, both in terms of popular examples like Reddit and personal experiences as both members and builders of online communities.
One of the most hilarious claims that we hear from internet trolls and the like concerning copyright and infringement is something along the lines of "but, without strong copyright, there would be no music!" It's a silly argument that has been debunked so frequently that we'd thought that it had been relegated to living on only among uninformed internet commenters, rather than actual industry execs. Enter Neil Turkewitz, one of the RIAA's top execs, who has been with the organization since 1987, and apparently still has the "Home Taping is Killing Music" phrase permanently imprinted on his brain, no matter how laughably false it is.
Turkewitz submitted a paper to the UN last year when it was investigating cultural rights, and that piece has now been republished by IP-Watch. It's a fairly astounding piece of ridiculousness that argues that there's no more cultural output in Africa or the Middle East... because they just don't have strong enough copyright laws.
It starts off with one of those classic lines about how, without copyright, no one makes music any more:
This has been the unfortunate reality in many developing countries where the lack of effective protection has eroded the willingness of private capital to fund production of original cultural works, contributing to economic stagnation and a dearth of cultural diversity. Simply put, when a society fails to reward its own creators, such creators will cease to exist, and “access” will be limited to foreign cultural materials.
Hmm. Except that's not what we've actually seen around the globe. In fact, with the rise of the internet and computers and the easy creation of works, people are finding that it's much easier (and cheaper) to create works and to get distribution. Pull up YouTube or log into Spotify and go searching for music from basically any country and see what you find. And compare that to what those of us who grew up in the era of the "record store" had to do to find world music (which was always all lumped together in a single tiny section in the back).
And, from there, he argues that the Middle East and Africa in particular are now silent. Because they just don't have strong enough copyright laws.
In many developing countries, the marketplace has been so dominated by piracy that there is no viable mechanism for private capital to be employed in facilitating the creation and distribution of creative works. In such instances-i.e. where copyright protection is not effectively introduced and maintained in law and in practice, the creative community is silenced. Communities throughout the globe-particularly in parts of the Middle East and Africa, bear silent witness to the devastating impact that lack of effective copyright protection has on the ability to create. Where there is no financial incentive for the creation and distribution of cultural materials, the distribution of local cultural materials ceases, much to the detriment of society, as well as to the putative creators who are foreclosed from adding their voices to the cultural mix.
Apparently, it does not occur to Turkewitz that there might be other factors that are impacting the markets for music in parts of those areas -- such as civil war, civil unrest, religious beliefs, turmoil, astounding levels of poverty and much, much more. But the idea that people in those regions are just sitting around not making music because of too weak copyright laws is simply laughable.
Besides, it's also not true. It wasn't that long ago that the NY Times was writing about the so-called "African Invasion" of African music coming to the US. Hell, it was just a few days ago that Ebony magazine noted that African music is the "new pop gold rush" which includes this paragraph:
But now that’s all transforming. Africa is now! The Internet has democratized music and threatened the major label’s cash cows. Radio and TV are no longer the only barriers to entry, and the borders are wide open. Our blinders are off, and we are exposed to music from all parts of the globe via the interwebs.
One thinks that, perhaps, Turkewitz's concern may be a lot more about the "threatened the major label's cash cows" line, than the supposed and mythical lack of music in Africa.
As for the Middle East, well, there's plenty of new music showing up there as well. Just a couple of months ago, the BBC covered the hip hop revolution in the Middle East, much of it inspired by the various revolutions in different countries. Turns out that, maybe, life events have a bigger impact on music than copyright law. Shocking, I know. The same BBC has also covered Iran's underground pop revolution and how youth across the arab world are "reveling" in a "pop revolution" in the region.
Oh, if you're interested in some Middle Eastern Pop or African pop music, click on those links. Or do a basic Google search, which will turn up a lot more. Apparently, Turkewitz couldn't be bothered (perhaps it's that whole "entertainment industry hates Google" thing).
So, uh, Turkewitz's argument is already just wrong.
Even more bizarre, he argues that this lack of copyright means that since no one in these countries is making music any more (totally false), it means that those markets are, instead, flooded with American music. You see, it's the lack of copyright protection that's leading to American cultural hegemony in those regions, and the good hearted Neil Turkewitz -- whose job is literally to advance the interests of the copyright holders behind American cultural hegemony -- now insists that he wants stronger copyright laws around the world not to advance the interests of the big labels (oh no!), but rather because he wants to protect local African and Middle Eastern music. Because he thinks whoever's reading this is an idiot.
Make no mistake — cultural hegemony flows not from the protection of intellectual property, but from its absence. We owe the world’s creators and societies a better deal, and effective copyright protection has well served the societies which have maintained such systems. We therefore urge policy makers around the globe to reject simplistic formulations of the public interest that are grounded only in considerations of access to creative works without considering the incentives for the production of creative works. We must ensure that policy makers ask themselves “access to what?” before adopting policies that endanger their own ability to foster creativity and innovation.
Now, we absolutely agree with the central claim that Turkewitz tries to pin his article on: that those who create culture need incentives to do so. But, as we've seen, there are all sorts of ways of doing that that don't require crazy extreme copyright that hinders freedom of expression and innovation at the same time. We see it all the time where new tools like crowdfunding and micropayments are making things possible. We see how the cost of production and distribution has made it so it's just easier for people to create and distribute music no matter what.
And, Turkewitz's claim that developing countries need stronger copyright for their local music just has no support in any historical context. Take, for example, the story we had a few years ago about the rise of a new genre of music in Brazil called "technobrega," which embraced sharing the music either on the internet or via passing around CDs -- often instigated by the artists themselves. That helped technobrega become a cultural phenomenon -- and the artists make money doing live shows. And there are tremendous parallels to the rise of Jamaican music, where an entire industry was created and built off of weak copyright laws and widespread sharing of music and reusing of riddims.
The argument that without copyright, regional and cultural music doesn't get created is simply laughable. The idea that we're somehow now in an era where American music is a "cultural hegemony" as opposed to a decade or two ago is similarly laughable. Turkewitz's basic premise doesn't even pass the most basic laugh test.
From there, we get the other silly old debunked RIAA talking point that "without strong copyright, there is no way to make money." I'd really thought that the RIAA had retired this one, but apparently not:
An effective and functional copyright environment is not a panacea; it does not on its own create global parity in the marketplace of ideas. But it does give individual creators a fighting chance, and an opportunity to compete. The ability to generate revenue from one’s creativity — to earn a living as a creator — is central to a society’s ability to foster cultural production. In its absence, dreams and creative lives perish. The moral and economic aspects of this equation are inseparable. We simply must ensure that all creators, regardless of their location, are able to enjoy the fundamental human right to choose the manner in which their creations are used as reflected in international law.
First of all, this is bullshit. Most creators do not earn a living as a creator. This has always been the case. Unless the RIAA is suddenly promising a basic income guarantee to anyone who can sing a few notes, it's never going to be true either. But, some artists do earn a living -- and it's rarely because of copyright. Sure, sometimes it is, and it may frequently be one important component, but arguing that it is the only lever to pull and that without strong copyright laws creativity goes away is laughable. Lots of artists make more from other ways: live performances, merchandise, crowdfunding and more.
And then Turkewitz gets even more ridiculous:
It does not serve the aspirations of developing societies to return to a system in which the voices of the people serve the whims of the private elite, or worse, to allow governments to be the sole determining body in the matter of cultural works.
A "private elite"? Really? Such as letting a tiny group of top execs at the three major labels choose what songs will be the hit records of the year, and then pay(ola) their way through millions to make sure that those are the songs that everyone listens to? Those kinds of "whims of the private elite"? Because, you know, that's kinda been a big part of the problem with music for a while.
Yet, in the last few years, we've gotten way past that thanks to the internet -- and, for many -- thanks to file sharing.
By permitting creative genius to be fueled by market forces, we unleash the cultural power and potential of the diversity of individuals, freeing creative impulses from the tyranny of centralized controls and making creative works accessible to the public at large. While copyright may be inadequate on its own in creating fair market conditions, it remains by far the most powerful tool for fostering creativity and democratizing culture itself.
Based on what? First of all, copyright is the opposite of "market forces." It's a government granted monopoly to stop market forces from working. Copyright is what has allowed "centralized control" over the recording industry from the likes of the RIAA itself. It's hilarious that a guy who has worked at the RIAA for almost three decades is actually trying to argue that there needs to be stronger global copyright to stop "the tyranny of centralized control."
Yes, it appears the king would like to raise taxes to better help the peasants avoid the tyranny of government coercion.
Besides, we're actually seeing exactly what happens without the "tyranny" of control under the old copyright system, and the true "marketplace" thanks to the various innovations that the RIAA has fought hard to kill, from YouTube to MP3 players to streaming music and more. And it's allowing artists without major label connections to outperform the biggest names from the major labels at times. Perhaps we need less focus on the old system, and more of these new innovations that appear to be giving power back to the public to determine what they really like, rather than the power of Universal Music's payola budget.
Copyright protection, while it may sometimes serve the interests of multinational corporations, is the mechanism that permits individuals to devote their lives to the creation of original materials;
It may be one mechanism, but it is hardly the only such mechanism, and what we're finding more and more is that it is a rather poor mechanism for that -- though it has been a fantastic mechanism for helping the RIAA labels screw over artists. But I digress...
If we want to foster cultural diversity (and I assume we all do), and want to ensure that diverse content is available to be accessed (and I assume we all do), then we must be more vigilant in ensuring the effective global protection of copyright.
Again, copyright may be a tool that works for some in some cases, but this ridiculous insistence that it is the only such tool and that it is the core thing that must be protected -- at a time when it's so obvious that it also creates tremendous problems elsewhere and when many other solutions to funding artists are coming on the scene -- just makes Turkewitz look incredibly out of touch.
Ms. Shaver writes that “copyright protection inflates the price of cultural works.” But again, that is completely wrong. Copyright protection gives economic value to cultural works, and sustains creators. It doesn’t inflate price – it recognizes a property interest so that the creator can determine the conditions of subsequent use.
Of course copyright inflates the price of cultural works. That's its sole purpose. That's what monopolies do. To argue against that is ridiculous. An intellectually honest argument Turkewitz could make would admit that, yes, copyright inflates the price, but in doing so creates new incentives for the original creation of the work. Then we can debate whether or not that's true. Instead, he makes the completely ridiculous assertion that copyright doesn't inflate the price at all. Of course it does.
And, no, copyright does not "give economic value to cultural works." Turkewitz, like so many others, is confusing price and value. Something may have tremendous economic value, even if it's free. This blog is free. Yet it has economic value in generating other kinds of revenue. Turkewitz's article is free. Yet I'd imagine he thinks it has economic value in (he hopes) convincing policy makers to bow down to the RIAA's distorted view of copyright law.
While I'm sure that some will argue that this is just the RIAA spouting nonsense as usual, it's important to note that Turkewitz isn't just sending a random note to the UN with this nonsense. He's also the Vice Chairman of ITAC-15, which is the USTR's "advisory committee" for intellectual property in trade agreements. All that crap we've seen in the TPP and TTIP about intellectual property -- that's partly Turkewitz's doing. And he is either totally ignorant of what's happening in the market (unlikely) or he's willing to make completely outlandishly bogus statements in order to push the RIAA's preferred course of action, at the expense of all of the innovation and cultural development we've seen in recent years.
When it comes to old notions that are used to stave off the need to embrace new business models in the digital age, nothing is more annoying than the whole "the masses just want everything for free" myth. That belief is snappy, punchy, and as simple to understand as it is completely and demonstrably wrong. But for a certain segment of the population, typically older generations of the kind that pine for the good old days when America was all apple pie and tasteful cartoons, the myth persists. Now, however, the myth is old. Old enough that it's begun to lose its flavor, like a piece of gum that you've been chewing on since Metallica shut down Napster. The new flavor is every digital success story that proves the myth wrong. Kickstarter happens to be my favorite example of this. What's remarkable about Kickstarter is that it's over half a decade old and, despite some still embracing the old myths, it's somehow stillsetting records in raising money for content producers.
Shenmue 3 isn’t only the fastest game to raise a million dollars on Kickstarter, it’s also the fastest game to raise two million dollars. The project was announced last night at Sony’s E3 press conference. It’s the follow-up the Shenmue 2, which was released fourteen years ago.
Were you to believe the legacy content producers, who insist the public are free-loading internet anarchists hell-bent on ruining everything and everyone, this shouldn't even be possible. The fact that records for raising money are being broken now is perfect in debunking every part of the myth. The money rolls in over a decade after the myth's creation, despite the expectation that every day would see an increase in younger generations just wanting "everything for free." The money rolls in six years into Kickstarter's existence, meaning nobody can claim that all this money is currently pouring in due to the embrace of some new platform, the popularity of which will quickly die away. The money rolls in for a video game, the exact kind of product that those who believe the myth would expect to be the most pirated.
What does this all mean? Kickstarter is on the verge of becoming the establishment now, if it isn't already. It's no longer the upstart experiment. It's firmly entrenched as a success story in the modern digital economy, taking its place alongside iTunes, Steam, and Netflix as snap-rebuttals to the old mythos. The truth is that there are conversations to be had about how to best operate within the digital economy, but those proselytizing the old gods against a greed that doesn't exist are no more useful in that discussion than flat-worlders might be in a conversation about astronomy. The myth is dead, gone the way of Zeus and relegated to a time before the counterexamples had borne fruit. The new question isn't whether content producers can get the public to pay for their goods; it's whether the now-established platforms can scale to keep up with the wider adoption of the platform.
Site performance is back up to speed. We're still monitoring everything. We've never seen anything like this. Thanks for your patience! #E3
This was in response to the insane amount of interest and traffic generated by Shenmue 3. People flocking to Kickstarter so fast that the site couldn't keep up. People who others will tell you just want everything for free. The myth is dead. Long live the new business models.
The recording is old news. Last century. Dead. The Access versus Ownership debate should have finished 10 years ago, but we're still bickering. Access models (eg. streaming) are not supposed to replace Ownership models. They're supposed to power a new reality, a new age for the Music business, in which the record industry possibly has no place.
"The Music industry" has become synonymous for the recording industry, just as it was synonymous for sheet music publishers prior to the rise of the recording companies. With new technology, come new companies, and the old companies move into the background. The new Music industry will likely not consist of those that depend on the recording (eg. major labels, or even Spotify), but those that apply technology to change what it means to listen to or interact with Music, just as the recording did in the 20th century.
Even the creative process will have to change.
Interactivity
Prior to the invention of the record, Music was far more participative than it has become throughout the age of mass media and mass consumption. Back then, if you wanted to hear your favourite song, you better know how to play an instrument, or have a member of the household who sings well, or you're simply not going to hear it. That sounds extremely restrictive given our current reality, but it also gave Music certain characteristics that made it richer:
Music was participative
Music was mostly a social experience
Music was more intimate
Music sounded a little bit different every time
Music belonged to everyone
I believe these are natural characteristics of Music, that got temporarily pushed into the background in the age of Mass Media and Western individualism. Entertainment and Culture became passive, and the ownership of Culture became less ambiguous, economically. A Creating Class arose, and a Consuming Class. The companies selling the output of the Creating Class benefited from the passiveness of the Consuming Class, because you couldn't consume high margin products while you create.
The KLF's Bill Drummond about Recorded Music
The KLF's Bill Drummond about what the recording took away from Music. From 1:23. Quote below.
"As the technology to record music evolved through the twentieth century, it sucked in and seduced every form of music around the world. They all wanted to become recorded music. They all wanted to become this thing that could be bought and sold. And that narrowed the parameters of what music could do and be. And it took away from music a big part of what can make music powerful, which is about music being about time, place, and occasion."
"Until 100 years ago, every musical event was unique: music was ephemeral and unrepeatable and even classical scoring couldn't guarantee precise duplication. Then came the gramophone record, which captured particular performances and made it possible to hear them identically over and over again. […] I think it's possible that our grandchildren will look at us in wonder and say: "You mean you used to listen to exactly the same thing over and over again?""
Introducing Interactivity
The recording is not the end of the line for Music. Every medium is a transition to the next medium.
Most people call performed music "live music" —
some people call recorded music "dead music"
The Media evolved and spawned Computers, the Internet, Video Games. The latter a highly Interactive example of Culture that went on to give birth to MMORPGs, where large Communities of players Interact and define their own Meaning, participatively. A particularly good example of the aforementioned elements coming together is Minecraft, a world-creating game where players work together to build whatever they can dream of. Deadmau5 uses this to enter a digital world of fan art and interact with his fanbase. Imagine what that's going to look like with the unstoppable momentum Virtual Reality currently seems to have. The Consuming Class has become the Creating Class: Consumption and Creation are becoming, in part, synonymous.
Why is Music still static by default?
Why am I not being offered more ways to interact with Music?
Look at the gaming industry. It's a 1,000 times easier to get someone to pay to unlock a 'special ability' than it is to sell them a piece of content.
Intimacy and Immediacy
The old Music industry is not interested in creating Intimacy. It's hard to scale. The dominance of the recording industry's model depends on hundreds of thousands of well-timed sales, and a long-tail that provides income until 70 years after the death of the Creator.
Yet the fact that we carry computers in our pockets that are more powerful than the PCs on our desks a few years ago, and always connected to the Internet, offers amazing opportunities for Intimacy and Immediacy, ones that fans are happy to pay for. It means that Kevin Kelly's theory of a 1,000 True Fans will become increasingly easy to apply for a growing number of Creators.
The rise of Intimacy and Immediacy will benefit those Creators who work with small teams, who are open about their creative process, and involve their fanbase early on in this process. This enables them to secure funds through crowdfunding, as opposed to trying to secure investment from large corporations, whether recording companies or brands.
One can create dynamics of social competition within a fanbase. Who can recruit the most new fans, or active members? Who are the most valuable contributors to the Creator's wiki? Who spend the most money on merch and who have the most complete collection? The ones that rank highest, get access to perks. A weekly 1 hour video chat with the top 10, weekly 10 minute preview of what you're working on for the top 50, 20% discount on merchandise for the top 200, etc.
An app that has a great idea for how to get people to actively discover new Music, engage with it, and feel part of the artist's success is Tradiio. It gamifies Music discovery and lets users invest virtual coins in songs they believe in. This helps artists rise to prominence on the platform and earn rewards. If this platform evolves from a reward-based game, to a real economy where users can purchase coins and artists can cash out, it would be a good example of the type of company the new Music industry will be made up of. Just to mention some other exemplary companies for music's future: look at Smule and Sonic Emotion.
More on Games
The Gaming industry got into the same mess, at the same time, that the Music industry got into, brought about by the fact that what they thought was their product could suddenly be communicated through networks at zero cost. A whole new Gaming industry emerged with the arrival of connected devices: smartphones. Instead of charging money for the game, they made the game free to play and highly social, and instead charged for a limited set of actions.
Treat money-poor, time-rich fans as well as the money-rich, time-poor, because it's the former that provide value for the latter.
Music needs a new format that's feature-oriented, rather than content-focused. The content remains central to the experience, but the interaction around the content is what brings in the money. Likewise, playback of recorded music will remain important in the future, but perhaps not as the part of the industry that rakes in the most important part of Creators' incomes.
Examples
There are countless examples of companies pioneering the future of Music. From aforementioned Tradiio, to ones started by game developers, Music business serial entrepreneurs, and artists themselves. First let's start with an example from another part of the entertainment industry.
Example: Affectiva & Portal Entertainment
The former is an emotion analysis startup spun out of MIT Media Lab in 2009. The latter is a studio which produces 'movies' for interactive devices. According to a recent article on Wired, using Affectiva's software, Portal Entertainment is creating a horror series that's "exactly as scary as you want it to be":
"The software will read your emotional reactions to the show in real time. Should your mouth turn down a second too long or your eyes squeeze shut in fright, the plot will speed along. But if they grow large and hold your interest, the program will draw out the suspense."
Imagine applying that to music… Some companies are already closing in on that.
Example: Inception, by Hans Zimmer and RjDj
Music producer and film composer Hans Zimmer collaborated on an app for the Inception movie, with RjDj, a company that specializes in Context Aware Music and Augmented music, founded by one of the co-founders of last.fm, Michael Breidenbruecker. Hans Zimmer on the project:
"There's a thing I've been searching for and I've been working on forever now, is a way to get beyond recorded music. To get beyond 'you just download a piece of music and it's just always the same'."
The application they made draws information from the world around the user, and transforms it into fantastic music. It seems as if you're being immersed in dreamlike worlds, as happens in the movie.
They continued their collaboration and made another app for The Dark Knight Rises. RjDj also created a Reactive Music game called Dimensions, which owes its name to the trippy effects of the Augmented Music that make it feel like you've just crossed into another dimension. The game is free-to-play, and offers in-app purchases to unlock new experiences or further augment existing ones.
I asked two of the people behind RjDj whether people are ready for adaptive music. This is what they had to say.
Michael Breidenbruecker:
"I think many of them are ready. Apps like Inception or Dark Night Rises show that people are really into this sonic experience. The problem is how this is presented packaged. I can tell you from experience that not many people hear the difference between 5 hours of generative music and 5 hours recorded music. So really... no one cares if your music changes all the time through an algorithm and never sounds the same or if [it] is a preproduced track. Music has to have a reason why it is dynamic and not linear... that's why we sync it to real life."
Robert Thomas:
"I think Inception especially proved that if the experience is delivered in a way that makes sense, perhaps within a bigger conceptual framework, then millions of people can understand it and really like it.
As for people understanding the depths and details of how reactive music changes. It is very very easy to lose a huge part of the audience here. I think its fair to say that only musicologists and very serious music listeners could pick out the ways in which detailed generative music is changing for instance. Making a reactive music experience meaningful requires that the listener can tangibly feel that the change in the music is linked to his / her activity or life in some direct and hopefully emotionally powerful way.
Often making linear music is about manipulating the emotional state of the listener into particular states of mind over time for dramatic effect. Reactive music poses a different set of possibilities - what if the music is manipulated by them / their emotional state? As a composer this is totally different - its like using a sniper rifle instead of a shotgun - you can make your music hit exactly the right spot for the moment."
Adaptive soundtracks are actually quite common in games, where the Music transforms depending on the player's absolute and relative position (it's called Dynamic Music). Some developers are chucking all the other game elements aside to focus fully on that.
Example: Proteus
Proteus has been described as a non-game. The game (or 'game') was developed by one developer and one sound designer, and places you on a mystical island. There's nothing there to kill, no need to score points, and you can't die. All you have to do is to wander around the island to discover new areas and to enjoy the way objects around you influence the soundtrack. This is the literal embodiment of the phrase 'soundscape'. The changing seasons, different weather conditions, time of day, and varying ecosystems all have an impact on the Music.
I asked David Kanaga, the game's sound designer, whether this is something anyone could do, in order to understand whether this could become a more mainstream medium for Music:
"Yes, anyone could do it. It's maybe even more natural than writing static music in a way. That said, very few people are doing it, and maybe it takes years of UNLEARNING, which maybe means everything needs to be played again, to stop fixating on what's successful and beautiful in recorded music, in Sgt. Peppers and Pet Sounds, to find the play aspect of those and to move on, to stop admiring recordings.. improvise only, this is the tactic that i've been practicing myself to try this unlearning.. no serious learning is needed, really, but the UNLEARNING is totally necessary."
Example: Biophilia, by Björk
In recent years many artists have taken to releasing albums as apps. Björk had a particularly interesting take on it, releasing her album as a 3 dimensional galaxy that can be navigated and interacted with. The app even became part of MoMa’s collection.
Through the use of in-app purchases, the user can unlock new parts of the galaxy, which provide new Music to Interact with.
Example: Don't Be Scared LP, by DJ Vadim
Ninja Tune veteran DJ Vadim released an 'immersive album', which allows users to interact with different elements of the song, recomposing it according to their own wishes. What better way to create a sense of Intimacy between your fans and your Music.
Example: Central Park (Listen to the Light), by BLUEBRAIN
Then there's Bluebrain, a musical duo that produced their own apps, location-aware albums, one of which can only be used in New York's Central Park. In a way it's similar to Proteus, except in this case, the soundscape is mapped to physical locations rather than virtual.
Example: Weav
Recently a new music startup by one of the creators of Google Maps started making waves: Weav. Weav's aim is to simply make music elastic. Unlike Spotify's new feature which picks songs that match your tempo while running, songs on Weav's platform will actually adjust to your pace. The team created tools for musicians to create dynamic music: you don't just write the song, you also program rules for it to recompose itself and adjust to different tempos. Co-founder Lars Rasmussen:
"We believe that as our lives become increasingly digital, and as our increasingly powerful mobile devices play greater and greater roles in our lives, having a song that can change and adapt -- in real time -- to what you are doing will become increasingly important. And delightful. This is why we built Weav."
Conclusion
If you're waiting for disruption in the music industry, don't look at the big platforms like iTunes or Spotify. They belong in the Age of the Recording.
Look at platforms that offer actual Interactivity, Immediacy, Intimacy, and Involvement. Now more than ever can Creators help give shape to future formats of Music, and to new ways to connect the listener to the Music.
Imagine Music in the Age of the Internet of Things.
Music may be static, but it doesn't have to be. And the relation between Creator and Fan certainly shouldn't be.
Bas Grasmayer (@basgras) is a music startup consultant, and former Product Lead of Zvooq, the leading music streaming service in Russia & CIS. He’s best known for his thesis The Answer is the Ecosystem: Marketing Music through Non-Linear Communication and has previously spoken at conferences such as Amsterdam Dance Event, European Lab, Midem and Sochi Winter Music Conference.
I'm going to do something crazy and generally not advised on the internet: I'm going to try to make a nuanced argument that cannot be summarized just in the title alone. I fully expect that some will not read through the details, but please, just ignore them in the comments and try to focus on the full argument presented here.
Let me start out this post by noting a key thing: from the beginning, it was stupid that Apple had negotiated a deal with record labels in which copyright holders would not be compensated with royalties for the three-month "trial period" of Apple's new streaming music program. It clearly should have agreed to pay the royalties, and it was a really short-sighted move to push for a deal without royalties. It was always going to come back to haunt the company. Second, while I know some people like to attack Swift for a variety of reasons, I actually think she's an incredibly savvy music person, who has built a tremendously successful career, often by maintaining control on her own and not giving it up to the major labels. That's fantastic. But all of that doesn't mean I think what happened this weekend was a good thing (remember: nuanced argument, please read on).
Of course, as you've probably heard, on Sunday, pop star Taylor Swift wrote an "open letter" to Apple on her Tumblr blog about how ridiculous this was, and how she wouldn't allow her latest album to stream on the service because of this -- even though she supports Apple's "no free tier" stance. There's a lot to comment on about her piece but, no matter what, it was effective. Late on Sunday, Apple's Eddy Cue tweeted Apple's capitulation:
And... the internet went kind of wild. The fact that Taylor Swift wrote a blog post that made Apple -- probably the richest and most powerful company in the world -- back down within a day (on a weekend, no less), does have a sort of populist appeal to it. People started jokingly suggesting that Swift should weigh in on politics, the Middle East and much, much more.
Thought pieces were written by-the-dozen about how Swift is the "most powerful woman/person in music/tech." No, really:
And that's just the first ones I found in a quick Google search. There are more.
But here's the problem with all of this: it's hogwash, meaningless blather that doesn't change a thing and will have no lasting impact. If anything, the lasting impact may be negative, not positive for artists. And, remember, I actually agree with the overall point that Apple's original decision was the wrong one, and think the company made the right decision to reverse course.
But there are three big problems with the rush to celebrate Swift as the new savior of the music industry over this. First her arguments for why are misleading and not very helpful. Second the overall impact of this move will be minimal to musicians (and other creative types). Third, it will give a false sense of hope to those who rely on obsolete business models, rather than innovating.
Let's break down all three. First: her arguments are kind of useless. Here's the key one, which got lots of people excited:
This is not about me. Thankfully I am on my fifth album and can support myself, my band, crew, and entire management team by playing live shows. This is about the new artist or band that has just released their first single and will not be paid for its success. This is about the young songwriter who just got his or her first cut and thought that the royalties from that would get them out of debt. This is about the producer who works tirelessly to innovate and create, just like the innovators and creators at Apple are pioneering in their field…but will not get paid for a quarter of a year’s worth of plays on his or her songs.
It's very touching. And it's almost entirely hogwash for a variety of reasons. First, if your album is a success, there are all sorts of ways to make money beyond the royalties from Apple Music's streaming service. Swift herself kind of admits this in her first sentence in which she notes that she makes a ton of money playing live shows. And why does she make that much money live? Well, as Tom Conrad rightly points out, her career was built on terrestrial radio play -- which is a free service (the kind that Swift has attacked Spotify over) and which doesn't pay the performers anything at all in the US. You can (and many do!) argue that the law in the US should change on this, but it's the way things are today, and Swift is living proof that being a part of a free service that doesn't pay performance royalties certainly doesn't mean that you end up suffering. In fact, it can lead to an immensely successful and profitable career... like Swift's.
But that brings us to the second problem with that paragraph, which is that for most musicians, this doesn't much matter anyway. That's because the industry's biggest secret, which it always tries to hide from these debates, is that the vast majority of musicians basically make absolutely nothing in royalties. This is due to a combination of factors, starting with the fact that if you're signed to a label, the label is likely keeping nearly everything you get from streaming. When Eddy Cue says "Apple will always make sure that artist [sic] are paid" he's lying. They may make sure the copyright holder gets paid, but that's frequently not the artist.
And, related to this, is the other dirty secret: most musicians don't have a big enough fanbase to generate enough revenue. Most musicians don't make a living, period. That has always been the case. The supporters of the old system like to try to slide this fact under the rug and they do some creative counting, where they only look at the stats of those who have made careers out of music, and they leave out the vast majority who fail. The vast, vast, vast majority of musicians don't make a living, because the music business is tough. It's tough to get attention. It's tough to make good music. It's tough to make money. Apple paying for streaming really only addresses a tiny, tiny, tiny bit of that last one. No musician is going to make it or not based on getting paid in this three-month trial. If they're getting enough plays to matter, then they have other ways to make revenue.
Three months is a long time to go unpaid, and it is unfair to ask anyone to work for nothing. I say this with love, reverence, and admiration for everything else Apple has done. I hope that soon I can join them in the progression towards a streaming model that seems fair to those who create this music. I think this could be the platform that gets it right.
Three months is a long time to go unpaid. But not getting paid by Apple Music does not mean "going unpaid." It just means one small revenue stream is limited while it aims to get up to speed. And, again, Swift herself proves this via the fact that her songs play all the time on the radio — for free, but still helping her get paid. And, even though she can pull it down, she's left her streaming music on YouTube. Furthermore, as others pointed out, Swift herself is a bit of a hypocrite here. She puts ridiculous limits on photographers who are on assignment to photograph her shows, such that it often means they have to put in the work and not get paid -- even as she gets to use their photographs forever. If she's really so concerned about creative types "going unpaid," shouldn't she be paying those photographers for their works?
As for the second point above: the overall impact of this move will be minimal to musicians (and other creative types). As already discussed in point one, for most musicians, this isn't going to move the needle one way or the other. Any musician out there relying on the royalties from Apple Music to make or break their musical career has no musical career. Perhaps it's possible that there are one or two artists at the margin for whom this is helpful, but for the vast majority of artists, this isn't going to make a big difference at all. Additionally, while Apple has said that it will now pay during the trial period, it didn't actually say how much it will pay. Yes, for struggling artists any revenue helps, but trust me, when the first royalty checks from Apple start coming in, I can guarantee there will be musicians complaining online about how little they get. Those stories always get coverage. They'll happen again.
And, of course, for label-affiliated artists, much of it will go to the label anyway, and the artist won't see any of it.
Finally, onto the third, and most concerning point: it will give a false sense of hope to those who rely on obsolete business models, rather than innovating. We're already seeing this in the reverence and adoration being showered on Swift for her blog post, despite its questionable premises -- but more for its impact. And musicians are celebrating this, despite the fact it won't move the needle for them one way or the other. And that's really unfortunate, because here's another chance to do things right by focusing on business models that let them connect directly to fans and give them a reason to buy something. Demanding others pay you money is no substitute for convincing others to willingly pay. One is sustainable, one is not.
But because of this "success," people will still cling to the false notion that the "solution" to content creators' failure to build their own successful business model is to demand that other successful companies give them money. And this goes way beyond music as well. Already, you see people like Jeremy Olshan, Marketwatch's Editor-in-Chief, saying that "journalism needs a Taylor Swift to save content from getting... devalued."
This is wrong on so many levels, but that's another post for another day. But this notion of "a savior" magically swooping in and reviving business models that aren't working any more, based on sheer will, is a myth. And it's a dangerous myth because it gets people focusing on that rather than implementing sustainable business models and creating great content. There is no savior for music. There is no savior for journalism. There is no savior for movies. No talk about "fairness" or "fair compensation" or "ethical compensation" is going to change fundamental economics. Most content creators fail out of making a career of it, and if you're going to succeed, praying for a savior, rather than taking steps to ensure a competent business model, isn't likely to be particularly productive.
To conclude (with nuance baked in): So, again, despite all of this, I think Apple made the wrong move initially, and the right move on Sunday night. However, Taylor Swift's reasoning was silly (even if I think she's a great success story who has built up a tremendous career without ceding much control), and the impact of all this will be basically nil for almost every single artist. But, worst of all, this whole episode reinforces this savior concept, and the false belief that because some companies are successful, while some content creators are not, a savior should just demand "fair compensation" and money will magically rain down upon the creative class. It doesn't work that way. It's never worked that way. And nothing in what happened over the weekend with Swift will change that. If anything, it only serves to distract people from focusing on the business models that do work.
Oh no! The sky is falling! Piracy is decimating musicians!
No, it's not. My latest law review article rebuts these cries and shows how new technologies have allowed musicians to participate in every step of the process of creating, developing, and marketing music.
The Recording Industry Association of America (RIAA) has claimed that piracy is "too benign of a term to adequately describe the toll that music theft" takes on musicians. And it has claimed that "there are fewer people trying to make money as musicians today" and that, in 2012, "the number of people who . . . describe themselves as musicians has declined since 1999 by 41 percent."
Although such numbers sound dire, I explain that the 41 percent figure is vastly overstated. Recalculating the figures for Ars Technica, Matthew Lasar found that the decline was only 8.4 percent. The RIAA's response was that it had not compared data between years, but rather had "looked at MONTHLY data: one month in a year vs. another month a year."
Of course, such an exercise allows one to cherry-pick data to achieve desired results. It is no surprise, then, that the RIAA conceded that "different months yield different figures." And, as Mike Masnick pointed out, monthly data "fluctuates pretty drastically" (for example, July figures might be higher because of more weddings).
The remainder of the article provides an overview of tools available to musicians.
The first step in the production process is creation. There are numerous programs that allow users to create their own music, such as Logic Pro X, Cubase, and Pro Tools 11. The most well-known, GarageBand, lets users assemble as many as 32 tracks of instruments such as drum beats, synthesizer riffs, and guitar sounds.
Next comes distribution. Twitter and YouTube are two prominent examples. By shrinking the gap between bands and their fans, Twitter has offered a platform for musicians to connect with their followers. Bearstronaut, for example, used Twitter to release a new single and gain more followers by using a "Tweet for a Track," by which fans retweet a song to their followers and get the single in return.
YouTube is another tool that musicians have used to distribute their works. Alex Day, for example, gained more than half a million subscribers and roughly 100 million views within six years of creating a YouTube channel, and he released three singles at once, which "kill[s] chart placement" but is "better for the fans and for the music."
Musicians also can do their own marketing. Bandcamp provides musicians with "a rock-solid platform for selling your music and merchandise" and offers "up-to-the-instant stats system [that] reveals who's linking to you, where your music is embedded, which tracks are most and least popular, what's being downloaded and when, [and] which search engine terms are sending traffic your way." Other examples include the Coalition of Artists and Stakeholders (CASH) (an open-source, nonprofit organization "focused on educating and empowering artists and their fans") and ReverbNation's Music for Good Program (which allows artists to split their profits with a charity).
Next comes royalty collection. CD Baby Pro offers worldwide music distribution and endeavors to "give independent artists the same royalty collection resources that major label artists" use. TuneCore distributes music to dozens of online services, sends royalties to participating musicians, and provides "detailed sales and daily iTunes, Spotify, and Amazon Music reports."
To carry out each of the above steps, musicians can raise funds from various services. The most prominent is Kickstarter, which, as of this writing, has raised $1.7 billion from more than 8 million people to fund 84,000 creative projects. Indiegogo has looser guidelines that "essentially allow for the crowdfunding of anything—projects, trips, charities, and personal wishes." And Patreon allows users to offer ongoing support for continued work and gives content creators the ability to set rewards such as "giv[ing] out their personal cell numbers, . . . play[ing] an online game with patrons, or even provid[ing] behind-the-scenes production diaries."
In recent years, touring has become an important source of revenue. Market leader Songkickaggregates concert information, allows users to receive notifications of when bands will be in town, and includes a database of fans' accounts of their concert experiences. Bandsintownpresents the bands users might be interested in as word bubbles, with the boldness level of the name indicating the app's confidence that the user will like the group. Timbreallows users to enter their location and receive a list of bands playing in their area.
In addition to all these tools, musicians can forge direct connections with fans. Our own Mike Masnick, in this and other fora, has been a pioneer in articulating a business model based on connecting with fans and giving them a reason to buy. Just a few examples:
Amanda Palmer, who in three experiments in one month totaling ten hours, made $19,000 from Twitter (compared with "absolutely nothing" from 30,000 record sales) after creating a "Friday Night Losers T-Shirt," hosting a webcast auction, and offering access to a recording studio event for the first 200 fans to request access.
Josh Freese, a drummer who offers, for varying levels of payment, drum lessons, visits to museums or Disneyland, clothes from his closet, his Volvo station wagon, service as a personal assistant, a spot on tour, or personal songs.
Jill Sobule, who similarly offers, for various levels of payment, access to shows for a year, names mentioned on a "‘thank you' song," concerts at individuals' houses, or the chance to sing on an album.
So don't listen to the record labels. Musicians are not confronting doom and gloom. Unlike the late 20th century, in which record labels played a crucial role, musicians today have the tools to undertake every step of the creation, distribution, marketing, and fundraising processes themselves.
The irony of the labels' flawed arguments is that they ignore that many independent musicians are thriving today, using tools their predecessors could only have dreamed about. No longer is the 20th-century, label-reliant model needed for success. The record labels may continue to witness the decline of their business model, but musicians may find that "the sky is rising."
I've been a Pink Floyd fan for most of the time I've been alive, so it was rather disappointing to see band leader and professional misanthrope Roger Waters recently come down with a terrible case of "get the hell off of my lawn." Speaking to a reporter earlier this month, Waters, the man who once blasted oblivious, recording industry bean counters in "Have a Cigar," assailed Silicon Valley as a corrupt den of "rogues and thieves." Rogers also pined for a simpler age -- one when musicians and artists were screwed more directly by their music label:
"Most of all I feel enormously privileged to have been born in 1943 and not 1983, to have been around when there was a music business and the takeover of Silicon Valley hadn't happened and, in consequence, you could still make a living writing and recording songs and playing them to people,” the bass guitarist and singer said.
Right, because as this outlet has covered extensively, the Internet has destroyed the music industry, and it's simply impossible to make any money off of art in this day and age. The fact that the Internet and piracy effectively turned albums into promotional material to sell merchandise and concert tickets is a very difficult idea for older generations to grok, but it's still kind of painful to see a rock hero of my youth fall victim to aggressively rigid neurons.
Waters doesn't stop there, and proceeds to trot out a litany of well-tread conflations, distortions and other flimsy arguments, joining folks like U2 manager Paul McGuinness in no longer understanding how the music industry he's a part of (kind of, since he hasn't released a new album in 23 years) actually works:
"When this gallery of rogues and thieves had not yet interjected themselves between the people who aspire to be creative and their potential audience and steal every f***ing cent anybody ever made and put it in their pockets to buy f***ing huge mega-yachts and Gulfstream Fives with. These … thieves! It’s just stealing! And that they’re allowed to get away with it is just incredible."
Waters went on to say that music lovers must take some responsibility for this parlous situation. “I blame the punters as well to some extent, a whole generation that’s grown up who believe that music should be free,” he said.
"I mean why not make everything free? Then you could walk into a shop and say ‘I like that television’ and you walk out with it. No! Somebody made that and you have to buy it! 'Oh, I'll just pick up few apples.' No! Some farmer grew those and brought them here to be sold!"
And here you were foolishly thinking that the Internet managed to open a massive new universe of music distribution possibilities and business models, helping countless artists connect more directly with their fans. As we've noted probably more times than can be counted, "free" isn't the business model -- free is part of one potential business model, and when done right, resonates incredibly well with consumers.
It's certainly fine if you don't like that, but that doesn't really change reality in the age of broadband and piracy. Of course if it makes Roger feel any better, the same wolfish recording industry Roger used to mock is still there at the end of the gravy train, working tirelessly to prevent artists from seeing their just deserts in the Spotify age. There's certainly plenty to criticize about some specific new Internet-based business models where artists still get screwed; but Waters doesn't really do that -- he just shakes his cane at the general direction of the Internet and "pisses and moans," as my grandfather used to say.
I'll of course never stop loving Pink Floyd ("Animals" in particular), and Waters' lessons on critical thinking, empathy and alienation are pretty much bone-grafted to my personality. Sadly though, he's also now a perfect example of the dangers of letting your aging synapses get so rigid you can't see new forest growth for the trees -- since I'd like to believe, maybe foolishly, that's not an inevitable symptom of aging. Of course I was one of those deviant rogues who helped destroy the music industry by swapping free tapes like this one:
The future of online journalism and related businesses continues to be uncertain. Following the recent shutdowns of GigaOm and San Francisco's The Bold Italic, we ask a critical question that is, of course, of personal importance to us here at Techdirt: how can smaller online media players survive in this age of goliaths like Buzzfeed?
For many years, we've warned newspapers that rushed headlong into paywalls that it was a fool's game. While, yes, their traditional advertising business was struggling, the idea that people would come out of the woodwork to suddenly pay for the online version seemed unlikely to come true, other than -- perhaps -- for the very largest newspapers in the world, the NY Times and the Wall Street Journal (and even then...). And yet, there remain a religious few who insist that paywalls must be the answer. They're wrong each and every time, but they can't stop screaming it. And so they trick foolish newspapers, desperate for some way to stem the revenue slide, into implementing a paywall, and nearly all of those papers discover the same damn thing: the people don't pay, and thanks to the paywall, the traffic decreases, fewer people link to or share their stories, and the advertisers go away even faster.
The latest to make this discovery: the Toronto Star, which has announced that its paywall is going away. Notably, it was the newspaper's own advertisers who helped management make this decision:
This decision means that effective April 1 all of our award-winning content will be available free on our website, thestar.com, and across all digital devices, including tablets and smartphones.
We are making this move after extensive input from our readers and our advertisers. Listening to our audiences is critical to the success of our daily newspaper and our digital offerings and we are committed to continually adjusting our digital strategies to provide them with what they want.
We've been saying it for years, but it needs to be said again: the news "business" has almost never (there are a very few exceptions) really been the "news" business. It has almost always been the community business. Build a community and then do something to monetize that community to continue serving that community. Most of the time that's been selling their attention in the form of ads. But, since the rise of the internet, newspapers no longer had quite the monopolistic control on the communities they were serving. That's the real challenge facing the old newspapers. How to continue to build a community. And yet, rather than look to add value and give the community reasons to stick around, they've gone in the other direction: trying to lock out the community, to put up barriers and toll booths that actually diminish the value to the community. A paywalled story is one that people are less likely to share, less likely to discuss, and less likely to visit altogether.
Meanwhile, you see stories about companies like Nextdoor, which are actively building local communities by providing value, and they're valued at over a billion dollars. Why didn't newspapers build something like that, rather than focus on putting up a stupid paywall that no one wanted?
The NY Times and the WSJ's "paywalls" are still really little more than the "emperor's new paywall." Both are easy to get around, so they still get people sharing. People pay because they're "the NY Times" and "the Wall Street Journal," and some feel a sort of obligation to pay. But they're hardly paying because of the paywall.
The Toronto Star's decision to kill off its paywall just reinforces the simple fact that a paywall is a stupid business model in an age of abundant information. The publications that get the most attention these days -- places like Buzzfeed and Vox and Vice -- don't talk about paywalls at all, because they know it would be pointless and go against the very concept of everything that they're building. So it still amazes me that other newspapers have been suckered into believing that a paywall is somehow the answer.
In discussions of Taylor Swift pulling her music from Spotify because the service wouldn't make the music available solely to paying subscribers, which pays higher royalty rates, and Aloe Blacc's Wired op-ed calling for higher royalties for songwriters from streaming services (but see: Spirit Animal frontman Steve Cooper's thoughtful piece in Business Insider on "why Spotify is not the enemy"), there are a few important economic realities being ignored.
Spotify currently pays about 70% of its revenue to rightsholders. That typically goes to middlemen — publishers for the musical work copyright, who then pay a portion to the songwriters, and record labels for the sound recording copyright, who then pay a portion to the musicians.
VC David Pakman (who testified in November 2012 before the House Judiciary IP Subcommittee about why the current music licensing scheme deters VC investment in new music services) recently analyzed data from middlemen in a few industries and found that many legacy middlemen are not earning the large share they take from creators in the digital age. Record labels, for example, contributed a lot more value when they coordinated and financed studio time (which can now be done with a basic computer and Internet connection, and possibly a Kickstarter campaign), manufacturing records and CDs and got them to retailers (which is no longer the primary way of selling music), and marketing (which can be done online with free services). Now, in the digital age, many of these services are no longer needed or performed.
In remarks last week at the Web Summit Conference in Dublin, Bono explained that rather than fighting against streaming, artists should be fighting for transparency:
Spotify is giving up 70% of all their revenues to rights owners. But it's just that people don't know where the money is going because the record labels haven't been transparent.
The rightsholder middlemen pay a far smaller share to creators than the substantial majority that the services pay, which depends on whether labels have direct deals with services, a digital aggregator/distributor, or whether artists own their rights, and on artists' contracts with their label, as explained in Future of Music Coalition's helpful infographics on how the money flows.
And yet artists appear to often blame the Internet services rather than the publishers and labels. One potential reason for this is that the artists aren't actually making the decisions; the publishers and labels are, because they own the rights and have the bargaining power. But often it's those contracts that are the reason they're not getting paid enough, not the services.
Pakman's data has Spotify currently paying about 70%. But how much should they pay? What is the right amount? 100%? More than 100%?
Lost in many of these discussions is the reality that music sales and streams are not the only way to make money anymore. Streaming services help artists find fans, which enables them to generate sales of goods, like concert ticket sales and other scarce resources.
Another important point is that consumers are going to spend different amounts on music. Many of them are happy to spend nothing on recorded music, and it's better for that to happen through ad-supported streaming sites like Spotify than through piracy. (For some more thoughts on the economic theory behind this, including demand elasticity and whether an infringement is a lost sale, see this post.)
Rightsholders may have delayed the existence of services like Spotify, and may still want them to not exist (which would occur if they were required to pay out more than they take in). But consumers want services like Spotify. And they use them. About 40% of Spotify's more than 40 million users were listening to Taylor Swift before she pulled her music, which some estimates said comes out to $84,000 a week.
Services like Spotify aren't just competing against digital sales on services like iTunes. (Although in Europe, where Spotify launched first, Spotify is now generating more royalties for artists than iTunes, which comports with recent research finding that global streaming revenue will soon surpass physical sales.) As DisCo has said in many posts (see, e.g., 1, 2, 3): Giving consumers lawful affordable options for listening to what they want when they want it in a convenient format reduces piracy.
