Steve Albini Takes On 'Parasitic' Record Labels And Copyright's 'Outdated' Illusion Of Control

from the the-future's-here-if-you-want-it dept

Musician and producer Steve Albini has never been a fan of the recording industry. He posted the definitive essay on how labels screw artists over 20 years ago, and it's just as relevant today as it was then. The internet (read: file sharing) has been public enemy #1 for the recording industry (and now the motion picture industry), despite offering a host of benefits to artists and labels. Those at the top see its decentralized distribution as a threat, with any accompanying gains in marketing power and reach deemed a net loss after totalling up the "lost sales."

Albini -- similarly affected by these same "negatives" -- doesn't see it this way. While acknowledging the fact that infringement occurs in amounts previously unseen (but that it's not in any way a new thing -- just far more efficient and not necessarily a bad thing), he continues to point out that the problems the music industry suffers from are mostly self-inflicted.

Speaking to an audience in Barcelona, Albini elaborated on his "updated" rant against the industry. Now expanded to include the massive increase of internet usage, the points still remain largely the same. There's a problem in the recording industry -- one virtually identical to the one pointed out by Albini in 1993. And that problem is… the recording industry.

“I don’t feel like I’m part of the music industry, the music industry meaning the corporatised business structures where you have people who are in the lower level, people in the upper level, people in administration, and people making legal relationships between all those people. [...]

This administrative business structure that’s syphoning money out of that whole scene has always seemed artificial and unnecessary and I’ve spent my life trying to remove its influence.”

While the industry frets about "lost sales," it has done very little to evolve from the bloated form it took on during the 40+ year run where multiple format shifts resulted in unprecedented sales figures. It's not just the corporate structure that's a problem. And this isn't to say labels haven't shed personnel over the years. It's just that they've been forced to make cuts due to falling revenue, rather than actively working to streamline their operations to fit the expectations of the internet age. Frontline staff and low-level employees have lost jobs but there are still many layers of employees distancing artists from those who own them.

Then there are the lawyers. Some are there to ensure every last bit of revenue can be wrung out of an artist before any royalty checks are cut. Some are there to explore every possible legal angle that might be used to combat piracy The first sort have always been present. The latter still exist only because industry heads still hold out hope that file sharing can somehow be defeated with court orders and legislation.

Albini says the first set are roughly as useless as the last.

“The idea that you have to have contracts to do [business] agreements, that you have to have formal understanding between people in order to have a long relationship, is a complete fallacy.

If you enjoy working with someone and both feel the relationship is working out, you naturally carry on indefinitely.

That’s the way I’ve approached essentially all of my business, you don’t need contracts."

But you do need a contract if the "relationship" is actually just exploitation. This is why contracts are of utmost importance to the recording industry. Artists may initially show enthusiasm when offered a recording contract, but a few years down the road, they often find they're cranking out recordings just to avoid going deeper in debt. An equitable agreement -- like those used by Albini (who prefers a flat-rate fee for his production work, rather than seeking a cut of every sale or stream in perpetuity) -- doesn't need a multi-page contract or a team of lawyers. Honesty and openness up front can trim a lot of pages from an agreement... as well as the jobs of lawyers whose entire purpose is to ensure "agreements" are as long and inscrutable as possible.

Lastly, Albini goes after copyright -- itself a legacy business model.

“The old copyright model – the person who creates something owns it and anyone else that wants to use it or see it has to pay them – has expired in the same way that around the world you’re seeing structures and social norms [lapse] that were standard for many years.

It’s going to take a lot for the business to catch up to where the audience is, in the same way it takes a while for the church and the laws to catch up to where the people are.

But there is no longer the possibility to exclusively control music through copyright.”

Those arguing that stronger copyright protections will somehow "control" social sharing aren't grasping the reality of the situation. As it stands now, any copyright holder can demand $150,000 per infringement in statutory damages, and yet, that has had no appreciable effect on infringement. Just ask Rightscorp, which offers $20/infringement "settlements" while waving threats of $150,000 "fines" over internet subscribers' heads. It's in the business of spending money to lose money.

The idea that lifetime+ copyright terms will put creators' grandkids through college is likewise suspect. Grandkids are going to college thanks to these terms, but they're the descendants of label execs and studio heads.

The "control" offered by copyright is an illusion. The continued belief in this misconception allows labels to take advantage of artists. An artist may feel (incorrectly) that an individual can never hope to fully exploit his or her creations without the assistance of the marketing and legal teams of major labels, but they almost invariably have to give up full control of their creations to make use of these services. What good is their copyright then? It's not even theirs. And the assistance they're receiving is charged up front at full retail and paid off with royalties -- a tiny percentage of actual sales and profit.

As Albini points out, the way people enjoy music continues to change, and attempts to offer iterations of existing platforms and services is missing the point. People, for the most part, don't care about the quality of streaming music. They only care about the convenience. Albini notes that people carried around transistor radios to enjoy music on the go, something that offered truly terrible sound quality, but was no less popular for doing so. The way people consume and distribute creations will continue to change, but trying to harness that potential using contracts, outdated business models and delusions of control will never work.

Filed Under: copyright, music industry, record labels, steve albini

Some Facts & Insights Into The Whole Discussion Of 'Ethics' And Music Business Models

from the well-needed dept

I know we've written a few times now about David Lowery's now infamous shaming of an intern because she apparently doesn't give him enough of her money, but that story keeps getting attention. Thankfully, a lot of that attention comes in the form of people from all over the music business popping up to explain (1) how Lowery's factual claims are false , (2) his ethical claims are silly and (3) it's time to get with the future, rather than pine for a mythical past that never existed. Here's a collection of some of the more interesting such posts.

First up, we have Jeff Price from Tunecore -- the company that helps thousands of artists release and sell music. Jeff has more data on how artists make money than probably anyone else alive. And he says that nearly all of Lowery's factual claims are wrong, or at best, misleading. Here's a snippet, but the whole thing is worth reading:

Well here’s some truth about the old industry that David somehow misses.

Previously, artists were not rolling in money. Most were not allowed into the system by the gatekeepers. Of those that were allowed on the major labels, over 98% of them failed. Yes, 98%
.

Of the 2% that succeeded, less than a half percent of those ever got paid a band royalty from the sale of recorded music.

How in the world is an artist making at least something, no matter how small, worse than 99% of the world’s unsigned artists making nothing and of the 1% signed, less than a half a percent of them ever making a single band royalty ever?

Finally, as much as I hate to say it, being an artist does not entitle the artist to get money. They have to earn it. And not everyone can.

This is a point that Lowery and his friends always ignore: because they don't count all the bands that failed under the old system. Those artists don't matter to them. The fact that those guys can make some money today where they made $0 before means nothing to them. The only artists who count are the artists who used to make lots of money, but don't make much money any more. Another example of Lowery being wrong that Price responds to is the claim that recorded music revenue to artists has been going down. Price has data:

This is empirically false. Revenue to labels has collapsed. Revenue to artists has gone up with more artists making more money now than at any time in history, off of the sale of pre-recorded music.

Taken a step further, a $17.98 list price CD earned a band $1.40 as a band royalty that they only got if they were recouped (over 99% of bands never recouped).

If an artist sells just two songs for $0.99 on iTunes via TuneCore, they gross $1.40.

If they sell an album for $9.99 on iTunes via TuneCore, they gross $7.00.

This is an INCREASE of over 700% in revenue to artists for recorded music sales.

Yeah, but you have to actually work at it now. Go read Jeff's entire writeup. It's pretty damning for Lowery.

Next up, we've got famed musician/producer Steve Albini's response, in which he notes that Lowery's facts are wrong and he's pining for a past that doesn't exist and ignoring all sorts of new opportunities:

In addition to vastly overstating the generosity of record labels toward artists in the old paradigm, Lowery openly sneers at the booming avenues for income that define the new music industry, merchandising and live performance.

As is true every time an industry changes, the people who used to have it easy claim the new way is not just hard for them but fundamentally wrong. The reluctance to adapt is a kind of embarrassing nostalgia that glosses over the many sins of the old ways, and it argues for a kind of pity fuck from the market.

It's doomed thinking. When it became obvious that the studio recording industry was not going to remain an analog domain, we built Electrical Audio to be as self-sufficient as possible so we could continue to use those methods we thought had important advantages despite changes in the greater industry. We didn't whine at the moon and expect the rest of the industry to indulge us. We also bought a Pro Tools rig to accommodate the sessions that weren't going to be done in the analog domain regardless.

Adapt to conditions or quit. Bitching is for bitches.

Next up, we've got successful "internet-era" musician Jonathan Coulton, who Lowery and his friends are claiming wrote a post supporting them. But that's only if you read the beginning, where Coulton claims that he agrees with Lowery. If you actually read the whole thing, Coulton's point is much more clear. He agrees that artists should get compensated, but scolding your customers is no way to do it. In fact, he talks about how exciting the future is going to be where more and more stuff is available for download for free, and how that will shake up lots of industries, beyond just music -- and just how exciting that is:

This is my bias: the decline of scarcity seems inevitable to me. I have no doubt that this fight over mp3s is just the first of many fights we're going to have about this stuff. Our laws and ethics already fail to match up with our behaviors, and for my money, those are the things we should be trying to fix. The change is already happening to us, and it's a change that WE ARE CHOOSING. It's too late to stop it, because we actually kind of like a lot of the things that we're getting out of it.

My one quibble with Coulton is that he seems to accept it as fact that artists make less money these days. His own experience and number from folks like Jeff Price above show that's simply not true. It may be true that the small circle of folks, like Lowery, who had some success in the past under the old system, and who then fail to adapt, may make less money, but that's the nature of a competitive marketplace.

Former record label guy Ethan Kaplan, whose insights we've discussed before, also weighed in with a more philosophical take, which is worth reading too. He makes two key points. As a guy who ran technology for Warner Music, he certainly has first hand knowledge about the role of innovation in the music business, and according to him, innovation was seen as a problem, because it broke the gatekeeper basis on which the old labels were built:

Innovation was antithetical to value for content, as it diminished the use of accessibility to increase relative worth.

Get that? He's pointing out that the labels' entire model was built on them being the gatekeeper -- limiting accessibility, in order to artificially suppress supply to keep prices high. The problem with innovation is that it inevitably moves towards greater efficiency. And that means pulling down artificial barriers. In the end, that's what Lowery is really complaining about, even if he doesn't realize it. He and his friends who once had some success as musicians face a more difficult world not because of unethical kids or because of technology... but because the way they used to make money was based on an artificial barrier that limited supply and competition, and allowed them to artificially inflate prices. It was good for them, but sucked for everyone who was kept out of the market. Why do you think this same crew is now arguing for a "new elitism" and directly insulting artists who succeed through more open means? It's because they want to go back to a limited supply. That's not happening.

And that brings up Ethan's second key point. There is no right to make money:

It is not a musician’s god given right to make money from their art. No one ever said this would continue as is.

This is a hard lesson. It doesn’t mean that copyright isn’t important. It doesn’t mean that artists can’t make money. It just means that it’s not a given, nor is it the responsibility of others to make this possible.

No one has ever had a "right" to make money from what they create. They have a right to try to do so. And many people have figured out how to do so under the current system. Those complaining don't seem to understand that you don't just get to sit back and have people give you money. You have to work at it, every day. That's the lesson Amanda Palmer provided everyone with her massively successful fundraising. She didn't raise that money based on any "ethical" arguments or anything having to do with copyright at all. In fact, she's explained how infringement has always helped her. She's able to do that because she works hard every single day to not just create great music, but to connect with her fans at a very deep level. She doesn't scold her fans -- she celebrates them. And because of that, she can make a ton of money and her fans love her for it.

Finally, we've got musician Travis Morrison, who was in a decently successful band (Dismemberment Plan) for a while and now works for the Huffington Post. He points out that this argument that there's some sort of ethical issue with the "kids these days" ignores the fact that past generations got music for free too, and for him, it was a huge boost to both his fandom and his desire to become a musician:

Music is so important to people. It is majorly important to young people. And to me? Literally somewhere below water and air but above food. And I just went for it. I bought a lot of music; I got a lot of free music from whatever sources were at hand; I just had to have it by any means necessary. If you duped a copy of a Dismemberment Plan record in college or something, it's cool. I guess I'd like to have the money, but you know what, I hope you just listened to it with even 1/10 of the consciousness I gave to the music I listened to as a kid--copied, stolen, or bought. And you know, maybe take some of the sermonizing from my peer group with a grain of salt. I think some of them did some of the things I did. Or... maybe a lot of them.

He's basically reinforcing the original point that Emily made and which kicked this whole thing off. Access to music and compensation of artists are two separate issues. The fact is that people know that the technology today enables access to pretty much every piece of music around. And it's a shame that we try to suppress that. The issue of compensation is somewhat separate from that -- and plenty of smart musicians are figuring it out. But arguing that access automatically means you need to compensate musicians at a high level (remember, Spotify's no good according to this bunch) or it's "unethical" just doesn't make sense, and has never made sense.

This debate has been interesting, but I'm glad to see that tons of people who live directly in that world have been coming out to correct the many inaccuracies in Lowery's post, which a few too many people took as gospel without understanding the details.

Filed Under: david lowery, emily white, ethan kaplan, ethics, jeff price, jonathan coulton, steve albini, travis morrison
Companies: tunecore

Amanda Palmer And Steve Albini On 'Piracy': It Only Helps Musicians

from the spread-the-music dept

Okay, here's a bit of a two-fer. With all of the attention that Amanda Palmer has been getting for her massively successful Kickstarter campaign, we had some commenters here questioning whether or not she would freak out if people then shared her music. Thankfully, in her latest update about the project she answers that and many other questions from some folks who are still a little confused about what's going on. But, for this post, let's focus on the simple question of "piracy" -- since it's one that comes up often enough around here:

i think music should be shared. all the time. by everybody. i think it’s pure insanity to make music filesharing illegal.
and with that said, i have, for years, encouraged my fans to burn, download and share all of my music with each other and with strangers.
and i will never stop doing that. all that sharing eventually comes back to me in all forms of income and goodwill.

This actually reminded me that, a few weeks earlier, famed music producer Steve Albini did an AMA on Reddit, in which he was asked a similar question, to which he responded:

I reject the term "piracy." It's people listening to music and sharing it with other people, and it's good for musicians because it widens the audience for music. The record industry doesn't like trading music because they see it as lost sales, but that's nonsense. Sales have declined because physical discs are no longer the distribution medium for mass-appeal pop music, and expecting people to treat files as physical objects to be inventoried and bought individually is absurd.

The downtrend in sales has hurt the recording business, obviously, but not us specifically because we never relied on the mainstream record industry for our clientele. Bands are always going to want to record themselves, and there will always be a market among serious music fans for well-made record albums. I'll point to the success of the Chicago label Numero Group as an example.

There won't ever be a mass-market record industry again, and that's fine with me because that industry didn't operate for the benefit of the musicians or the audience, the only classes of people I care about.

Free distribution of music has created a huge growth in the audience for live music performance, where most bands spend most of their time and energy anyway. Ticket prices have risen to the point that even club-level touring bands can earn a middle-class income if they keep their shit together, and every band now has access to a world-wide audience at no cost of acquisition. That's fantastic.

Additionally, places poorly-served by the old-school record business (small or isolate towns, third-world and non-english-speaking countries) now have access to everything instead of a small sampling of music controlled by a hidebound local industry. When my band toured Eastern Europe a couple of years ago we had full houses despite having sold literally no records in most of those countries. Thank you internets.

Considering that Amanda actually linked to Albini's fantabulous rant about what happens when you sign a major label deal from many years ago (nearly two decades) in her previous blog post about where all the money is going, it doesn't surprise me to find out that she's still on the same wavelength as Albini today.

The key point that both Palmer and Albini recognize is that it's not about the "sharing" or "piracy" or whatever you want to call it. It's about what you do with it. Both recognize that if you play your cards right, things can be absolutely fantastic for musicians these days, because not only can they have more control over their own destinies by taking charge of their careers, the biggest challenge is obscurity not piracy. And, in fact, file sharing (not "piracy" if it's supported by the artists themselves) can help alleviate that problem, help them build up larger audiences around the globe -- at no cost -- and then do something with that fanbase later.

I keep seeing critics complain that Amanda's Kickstarter campaign only is useful to someone like Amanda because she "had a big fanbase" already. That ignores (completely) how she built up that fanbase. And part of that is making sure as many people as possible could and did hear her music. In that context, fighting against "piracy" seems to be fighting against an artist's own best interests...

Filed Under: amanda palmer, piracy, sharing, steve albini
Companies: kickstarter

Steve Albini Explains Why Royalties Don't Make Sense

from the get-paid-for-your-work dept

Beyond being a world famous musician, engineer, producer and journalist, Steve Albini has long been pretty outspoken about the music business itself -- and while I don't always agree with him, I appreciate that he speaks his mind and often presents his arguments in ways that make me think and reconsider some of my own positions. herodotus points us to the news of some comments Albini recently made at a conference about the music business, with a great quote about the focus of so many on royalties:

"Royalties are a means to pay producers in the future -- and in perpetuity -- based on record sales," said Albini, who is also a music journalist. "If a band does a show, blows a whole bunch of minds and a bunch of people become fans and go out and buy millions of records, the producer gets paid. I think that's ethically unsustainable.

"I don't think you should pay a doctor extra because a patient doesn't die. I think the doctor should be busting his ass for every patient. I don't think I should get paid for someone else's success."

I'm guessing that we'll get a fair amount of disagreement in the comments, but I think it's a point worth considering. So many creative industries get really hung up on royalties and collective licensing and other aspects -- when those are basically lottery tickets, relying very much on what other people do, not on the work you actually do. And it leads to this entitlement mentality that we see all the time, where certain content creators feel they need to get paid every time their content is used -- even if they didn't do any additional work on it. This is what all the ongoing legal battles about collective licensing and royalty rates are about. This is what the Hollywood writers' strike from a few years ago were about. They're ongoing attempts to keep getting paid over and over again for one thing you did in the past. Most jobs don't work that way -- and that's the point that Albini is making.

Now, some will argue, of course, that the entertainment industry is "different," because it involves more speculation: no one knows if the content you create will be a hit, so the concept of royalties is a way to deal with that. But that assumes a rather static market, and pays little attention to the entitlement mentality that it creates. If you have a hit, charge more for future work -- rather than focusing so much on getting paid over and over and over again just for that one piece of work you did in the past.

Filed Under: copyright, royalties, steve albini