Musicians On The Wrong Side Of History

from the how-medieval dept

Things are getting really odd in the latest music/internet/Silicon Valley skirmishes. It would appear that the step up in anti-streaming music, anti-silicon valley, anti-Google rhetoric by famous musicians is getting heated.

The lexicon is growing: Thom Yorke called streaming music services the last desperate fart of a dying corpse, where "corpse" refers to the recorded music industry. David Byrne joined the fray with an odd article for the Guardian last month that compelled me to write my own Op-ed rebuttal. Mr Byrne was telling of how he had removed "as much of my catalogue from Spotify I can." I believe that is the wrong answer for all musicians, rich and poor.

I also wrote a post that offered a solution. I proposed that if the richer musicians were so concerned for their less well off brethren, and believed that culture and society was about to collapse, then perhaps they should help them out.

Not that that's going to happen anytime soon.

The latest addition to the anti-technology list of musicians is the well-respected T Bone Burnett, who in a Halloween-inspired fit of pique, said in a Hollywood Reporter article titled: T Bone Burnett vs. Silicon Valley: 'We Should Go Up There With Pitchforks and Torches.'

How medieval.

Mr. Burnett has a soundbite for us all -- "Digital sound has dehumanized us." If I think for a moment about the true dehumanization of societies under attack around the world -- Iraq, Syria, Mali to name but a few -- I can only scoff at that statement. It's pure hyperbole.

I saw a tweet from Thom Yorke the other day where he'd taken a snap of a page from a Jaron Lanier book (I'm guessing Who Owns the Future?) where Yorke wrote "I am proudly Luddite if to be so is to criticise the power and destruction of Google etc.. J Lanier again."

Let's take a look at what exactly describes a Luddite -- "a member of any of the bands of English workers who destroyed machinery, esp. in cotton and woolen mills, that they believed was threatening their jobs (1811–16)." And in a finer description -- "The Luddites were 19th-century English textile artisans who protested against newly developed labor-saving machinery from 1811 to 1817." [Link]

And so, if we were to take Thom at his word, the fall of Google would cause him and his supporters to dance in the streets waving their proverbial "pitchforks and torches," while denying those in society who are not musicians the benefits of labor-saving technology that Google and other technology companies bring.

That's about as far away from a credible position in this discussion than I can imagine. The real irony there is that the "labor-saving technologies" of today make it easier, not harder, for musicians to reach an audience. Thom's band Radiohead posted a film, Scotch Mist, to the Google-owned YouTube where it has garnered almost 7.3 million views. Just sayin'.

Very recently Tim Quirk, a musician and a friend who I have known for some time now, gave a speech at the Future of Music Summit (you can link to it here.) At its heart Tim's talk was an impassioned plea for musicians to understand the true value of music, not as in a price-point, but at its emotional level. He notes that you cannot devalue music's worth at that level. He understands that musicians are fighting technology because of their misguided, nostalgic view of the recording industry. There was never a "Golden age" of music. Record deals were not built to empower musicians, they were to benefit the record labels. Most musicians hardly ever made a living from music, only those who rose to the top did. Nothing has changed.

Tim provided an image that shows the reality of a music ecosystem:

From Tim:

You can sketch this dynamic with a simple pyramid showing lots of people spending little or no money at the bottom and fewer people spending lots of money at the top. If you’re a new band, you begin at the bottom of that pyramid, but no matter how popular a given artist gets or how amazing her latest single is, there will always, always, always be more people in the world who don't care than who do.

So the goal for every artist and every song has always been to climb this pyramid, convincing as many people as you can to part with something in exchange for listening. At first, you just want their attention. The next step is to get them to give you some money for the privilege of hearing your song whenever they happen to get the urge and as you keep climbing the pyramid, you find yourself with fewer and fewer listeners but each one who remains is happy to give you more and more money.

It has never been any different than it is now in other words. The only change is a societal shift. Young people have voted with their ears. They want to access music wherever they are, they are willing to pay for it too. If they like your music they'll keep paying, if they don't like it they won't bother to even listen to it. Radio has always been free for music fans. If they heard something they liked they bought it. Today -- same as it ever was. (Before you jump in and say the access to "free" music is killing careers, please remember that radio was always free, 24 hours a day, 7 days a week. Still is. Purchasing decisions are made around it. Online and mobile access to music creates demand if the listener perceives its value.)

Let's take the musician's arguments at face value and tell it like it is: they are demanding that they be singled out as a special interest group that should always be able to make an income from their work. If they hold to that position in the face of how markets actually work, e.g. a superior product at a reasonable price will sell better than an inferior product where demand creates the price points, then they will simply lose face and their audience will move on.

And prices are flexible. Arcade Fire released its new album this week and reportedly sold 140,000 copies. If another band called Arcade Ice was as popular but offered its album at $1 less it doesn't mean it will sell 140,000 copies or more just because it's a dollar less. That's because fans of Arcade Fire and Arcade Ice are not necessarily fans of both bands. Each band therefore reaches the fans that will purchase their respective albums, and each band's income will differ -- not on a price point but on demand.

Musicians are in the marketplace and there's a thing called a Demand Curve:

There's a comment in the Demand Curve article I link to that creates an analogy -- "The higher the price of a Kindle is, the less people want to buy it. If the price for a Kindle is to go up drastically, people will buy substitute goods like normal paperbacks, and the demand for ebooks will fall accordingly."

So underpaid authors should force Amazon to increase the price of the Kindle, right? Oh, wait...

Yelling get off my lawn is not a serious response to a lack of demand.

Dave Allen is the founding member and bass player for Gang of Four ad Shriekback, and is currently Digital Creative Director at North, a Portland-based brand strategy company, where this blog post was first published (along with many other great blog posts).

Filed Under: dave allen, david byrne, history, luddites, musicians, silicon valley, t bone burnett, thom yorke, tim quirk

Getting Past The 'But Artists Should Just Be Artists' Myth

from the it's-designed-to-keep-you-down dept

At Monday's excellent SF Music Tech Summit, there was a really good discussion in the final panel of the day, that crystallized in my mind why it's hogwash when some repeat the refrain that "artists should just be artists" and not worry about business models, connecting with fans or social networking. It's a claim that is made over and over again -- sometimes by musicians themselves. In the past, we've pointed out that this is fine, if artists just want to be artists then they need to do one of two things: either not expect to make much money or partner with someone who can focus on the business model and social networking side of things. Dave Allen, who was on that panel, used his manifesto on why artists needed to stop whining and start taking charge as a kicking off point, and brought up his concept of why all bands needed "a fifth Beatle" to manage that side of their efforts. In many ways, it reminded me of Andrew Dubber's recent manifesto that pointed out that if you wanted to make money as a musician, you had to become a musical entrepreneur.

But, two other comments on the panel made the point even more clear. First was Sebastien Keefe, from the band Family of the Year, who talked about how the band (more his bandmates than himself, actually) did a really good job connecting with fans online, including a special private concert that only Twitter followers found out about, and a cool postcard promotion, where people would pay $5 for a postcard, and the band would send it back to the fans from their tour. When the question came up of artists claiming that they didn't want to spend the time on social networks to connect with fans, he noted first that it wasn't that much time, and second that an artist unwilling to do that was "selling themselves short," in not really building up their audience.

Though, what's really cementing the myth of "artists should just be artists" was Tim Quirk's comment. Quirk, of course, got a lot of publicity recently for revealing how major record label royalty statements are often total works of fiction, using his own royalty statements as an example. On this topic, however, he noted that the people who tell artists that "you should just focus on being an artist" were almost always "feeding them bullshit" in order to gain more control over the artist. That is, it's a line you often hear from record labels or managers who want more control over a musician's business. So all three of those musicians (Allen, Quirk and Keefe) highlighted how the claim that "musicians should just be musicians" isn't just a myth, but it's often used to limit the potential of musicians.

Right after that panel, there was a short (and very sparsely attended) talk given by Stephan Jenkins, of the band Third Eye Blind -- and without realizing it, he put the exclamation point on this particular discussion from the previous panel. While he said he was grateful for his major label experience, he also talked about how being on a major label actually made it harder for the band to really focus on their music and artistic ideals -- because the label started dictating everything that the band should be doing. From that, he felt like the band really got away from the sort of music that it wanted to create, that had helped make the band big in the first place. He talked about how piracy has given the band "a second chance" by letting a new generation of fans discover their original music, and that has resulted in the band's most recent album, which he felt was much more true to the band's musical roots. He noted also that, now that they were out of the major label system, they were making a lot more money, even if they were selling fewer units.

All in all, it really helped solidify the idea that the claim that "artists just need to be artists" and shouldn't be concerned about business models or talking to fans is really just a line used by record labels to try to gain more control over artists, at their own expense. That doesn't mean that artists shouldn't try to find that "5th Beatle," to help them when it becomes necessary, but that they should make sure that whoever that 5th Beatle is, he or she is really aligned with their thinking in where they want to go with their career.

Filed Under: artists should just be artists, business models, dave allen, music, musicians, sebastien keefe, stephan jenkins, tim quirk

More Creative Fiction In Warner Music Royalty Statements

from the going-backwards? dept

With Tim Quirk's story about his fictional royalty statements from Warner Music, more people are beginning to talk about these kinds of things. Bob Lefsetz points to another report of a royalty statement of an unrecouped artist (and former major label exec), David Bach, who notes with some surprise that on his last royalty statement from Warner Music, the amount the band owed had gone up. In other words, the royalties that the band had accrued had somehow decreased:

In May of 2007, I wrote a post about the wacky world of record company royalty recoupment.

This week (Nov.-2009) - I received another royalty statement.

Wow!...we've gone backwards!

In May 2007, we were unrecouped to Warner Brothers to the tune of $174,073.84

Now...our balance is up to $174,717.56!

Talk about "pushing forward back!".

How is this possible?

Good question!

Now, to be fair, Bach still says that he was happy with his major record deal, in noting that it was effectively an "unsecured loan" in that he doesn't lose his house if it never gets recouped. He conveniently leaves out the clear explanation that the label is still making money based on the wholesale price of the album, which is many times over what royalties are due to recoup the advance. He also leaves out the fact that while it was an "unsecured loan," it also involved him giving up basically all rights to the music created under that deal forever (or, as the industry prefers, forever minus a day). Not sure that's really that great a deal. With a real loan, you don't also give up the lender something to keep forever. That's not a loan, it's a transaction.

Still, the bigger issue is this idea that the amount that still needs to be recouped has gone backwards over time. It again raises serious questions about how Warner Music accounts for what it owes bands, whether they're recouped or unrecouped. I recognize that accounting may be a boring topic, but it's an important one that Warner has contractual obligations to keep accurate. And... plenty of other businesses with similar challenges seem to be able to keep track of what royalties are owed to whom. Why can't Warner Music keep it straight?

Filed Under: accounting, david bach, royalties, tim quirk
Companies: warner music group

Warner Music's Royalty Statements: Works Of Fiction

from the too-much-joy dept

For years we've all heard the stories about how bad the major labels are at accounting for royalties they owe bands. There have certainly been a large number of lawsuits from artists claiming that this rather opaque accounting system is used to hide money from musicians, with various multi-platinum selling musicians claiming they never saw a dime of royalties from their albums, thanks to major label accounting. This is, of course, rather amazing in this day and age where technology allows for amazingly accurate accounting practices -- even for massively complex operations. But, then again, these are the major labels we're talking about, and they're often proud of their technical cluelessness.

Still, it's quite interesting to see a blog post, sent in by Quentin Hartman and written by the singer for the band Too Much Joy, Tim Quirk. Quirk is in an interesting position. Having been a moderately successful major label artist who is now an executive at digital music company Rhapsody, he's seen different sides of the business -- and in his must-read blog post, he details the absolute fiction that is a royalty statement from Warner Music Group -- leading to the flat-out false claim that Too Much Joy earned a grand total of $62.47 in digital royalties over five years across their three Warner albums. You really should read the whole thing, as it's quite detailed about how the major labels view most bands on their roster.

Back to my ridiculous Warner Bros. statement. As I flipped through its ten pages (seriously, it took ten pages to detail the $62.47 of income), I realized that Warner wasn't being evil, just careless and unconcerned -- an impression I confirmed a few days later when I spoke to a guy in their Royalties and Licensing department I am going to call Danny.

I asked Danny why there were no royalties at all listed from iTunes, and he said, "Huh. There are no domestic downloads on here at all. Only streams. And it has international downloads, but no international streams. I have no idea why." I asked Danny why the statement only seemed to list tracks from two of the three albums Warner had released -- an entire album was missing. He said they could only report back what the digital services had provided to them, and the services must not have reported any activity for those other songs. When I suggested that seemed unlikely -- that having every track from two albums listed by over a dozen different services, but zero tracks from a third album listed by any seemed more like an error on Warner's side, he said he'd look into it. As I asked more questions (Why do we get paid 50% of the income from all the tracks on one album, but only 35.7143% of the income from all the tracks on another? Why did 29 plays of a track on the late, lamented MusicMatch earn a total of 63 cents when 1,016 plays of the exact same track on MySpace earned only 23 cents?) he eventually got to the heart of the matter: :"We don't normally do this for unrecouped bands," he said. "But, I was told you'd asked."

As you hopefully know, with a major record label, the band gets an advance to record the album. From then on, the label no longer pays the band anything. Even though the band accrues royalties on albums sold, those royalties simply go towards repaying the advance. Most label bands never fully repay the advance, and are thus considered "unrecouped." This does not mean (as record label defenders will claim) that such bands were money losers for the label. The labels still take their own hefty cut from any album sales. They just also hang onto the tiny fraction of album sales that are officially designated for the actual musicians.

Basically, what Quirk notes, is that whether through malice or indifference (or a combination of both), the general major label attitude towards "unrecouped" bands is that the accounting is meaningless, so they don't even bother. That means they make massive mistakes -- such as the time Warner just happened to make a $10,000 mistake in Warner's favor, and then mocked Quirk for even caring about such a measly sum.

Now, when it came to digital revenue, for most artists, Warner apparently doesn't even bother to tell artists what their digital royalties are. They're unrecouped, so it doesn't matter in the minds of Warner execs. Quirk, by nature of also being an industry exec was able to (thanks to a chance meeting at a conference and 13 months of waiting) get Warner to agree to detail his digital earnings. But, because the band is unlikely to pay off the nearly $400,000 in "unrecouped" advance money, basically Warner did a slipshod job of it all. What this tells you is that Warner either has no serious accounting system to track this sort of thing or has mastered the art of obfuscating everything and purposely acting like their accounting department is run by six-year-olds. I'm not sure which is scarier.

Now, Quirk is reasonably clear that he's just as likely to attribute all of this to a combination of indifference and incompetence than to malice -- and there's nothing to indicate otherwise. But, you do have to ask how seriously anyone can take any of the ridiculous numbers that Warner Music Group or the RIAA toss around concerning the music industry and "losses" due to "piracy" and such, when it can't even put together an accounting system that can track (let alone accurately count) the most basic information that it is contractually obligated to both track and report. It also should highlight, for any bands who still actually think signing a major record label contract makes sense, how little regard major labels like Warner Music Group actually have for most of the artists on their label. As Quirk notes in discussing the $10,000 error:

When I caught this mistake, and brought it to the attention of someone with the power to correct it, he wasn't just befuddled by my anger -- he laughed at it. "$10,000 is nothing!" he chuckled.

If you're like most people -- especially people in unrecouped bands -- "nothing" is not a word you ever use in conjunction with a figure like "$10,000," but he seemed oblivious to that. "It's a rounding error. It happens all the time. Why are you so worked up?"

So, perhaps, the next time that Warner Music claims that it deserves $22,500 for a "pirated" song, someone will point out that according to Warner Music's own accountants, such numbers are really just a "rounding error" and there's no need to pay them. Somehow, I get the feeling that Warner Music will take a different view on such numbers about then.

Filed Under: business models, music, royalties, tim quirk, too much joy
Companies: warner music group