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The Music Business and the Internet
Lots of people sent in links to stories about the music industry holding a press conference and claiming that people are copying music rather than buying it (see their press release if you like). But there are some alternative points of view too: a study at the University of Buffalo claims that music sharing may cut down on superstars and promote new music. The New Republic has a story about a band that released their album on the Net six months before CDs were available, and is now wondering whether fans will buy more, less, or about the same number of aluminum and plastic circles. And a nice chart I saw a few days ago compares CD sales vs. price over the last several years and suggests that price-fixing by the recording industry may play a part in slowing sales.
Go to your local pub or club tonight, drop some coins in a busker's guitar case, wrap a piece of waxed paper around a comb to make your own kazoo - whatever you can do to create and support music on your local level has got to be better than supporting the Machine.
They are taking a slow economy and making into another reason for to attack the use of MP3's any thing related.
5% ba
As in everything, there are always ups and downs, such is life. If it were 25%-50%, i can see that there was an issues but 5%, maybe they need to make better music, lower prices, or stop their complaining. Not get up on their soapbox and scream-"they did it"
If we refuse to be flexible, we are in effect opting out of the game of life. The world moves on without us.
While I support buying records of bands I like I know full well that they don't get much of the money I pay. Therefore if I like a band a lot I'll go see them in concert and buy their cds there. They get much more of the money from cd sales at concerts, plus they get your ticket money and support. This works out for the betterment of everyone except the record companies, but who cares about them anyways.
ahh, the egg in the basket..
People download music because CD's are over-priced.
The record companies lose money so start charging more for CD's
People download even more music.
This circle is set to continue unless record companies start pricing CD's realistically. If AOL/Compuserv/Freeserve can give away CD's in shops and with hardware then why do i have to pay £20 for a music CD?
At some point, the recording industry is going to have to realize that they have things BACKWARDS. Now, artists tour to increase and promote album sales. In the future, it's going to have to be the other way around -- artists will put out albums to promote and support their tours. Go see a band live, then buy a copy of the performance you just saw on your way out.
According to the UK national news, although there is a general downturn in CD sales globally, in the UK sales are up over 5% !
It might be something to do with a country's cultural background as to whether you buy or download for free.
No sharp objects, I'm a programmer!
If the music industry can't satisfy my wishes but the file sharing networks can, what do you expect me to do?
- Internet music sharing was rampant in the UK (probably partly attributable to increased availability of broadband) and
- CD sales in the UK rose 4% (NB: vinyl sales rose by even more; go figure), contrary to a downward trend everywhere else
Hrm, let me see...Unfortunately, this information didn't make it through to their web site, as far as I could see...
In my country, ie india A blank CD costs approx 30 cents adn a blank casette 1$, however a recored CD of a big band costs 12$ and the casette of the same album costs 3$. It is ridiclous, its like saying "{We want to screw you, so please let us do so with a smile}"
My Aurora : http://www.youtube.com/watch?v=o91ZsGwJYyg
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"Music sharing may cut down on superstars and promote new music" is not something the industry wants to hear. Sales of music by superstars are predictable and that's what the entertainment industry loves about stars-- that's why the pay at the high end is asymptotic in music, movies, etc. And that's why the industry tries to create stars.
I wrote about one of the first digital custom music systems (Personics) for Rolling Stone in the mid-80s, and even back then, the industry feared technology because it might break their stranglehold on distribution. They've long been using copyright law to prevent any technology that would broaden distribution and therefore create broader choice in music.
there was a poll not too long ago which asked high school football players what they believed they would be doing. ALMOST ALL of them said they believed they would be playing in the NFL. even though, statistically speaking, ALMOST NONE of them would be.
"statistics are for somebody else. not me. i can't be a statistic."
-rp
it's a similar statistical argument for lowering taxes. there is a curve, and somewhere on that curve, is the 'maximum' income (for record companies in this case, for the government in the other case). if the labels charged $100 for CDs, they would sell hardly any. if the government taxed 100%, hardly anyone would file a second time (everyone would have 0 dollars). if the labels charged $0, they would obviously be out of business. if the government taxed 0% it might find itself with millions of starving, diseased citizens.
but somewhere on the curve is a bump - probably around $9.99 or so, but that is just a guess of course - where the labels would be selling so MANY damn CDs the money would be pouring in. likewise somewhere on the tax curve - probably around 19% or so, but that's just listening to economists - where income is maximized to the government.
why doesn't anyone pay any attention to economical fact, statistical fact?
-rp
ps - there are lies, damned lies, and statistics.
The UB study just goes to underline why the RIAA is fighting so hard to prevent P2P sharing. It is well-acknowledged that the current business models of RIAA members is superstar-driven.
It's an oft-repeated fact that record labels lose money on 90% of their roster of artists, and make it all up and then some on the 10% of artists and records that become blockbusters. Thus, if P2P sharing is primarily undercutting the superstars (as the UB study states), that's the logical attack point for the RIAA.
There's no question that a new business model is needed, not just because of P2P, but because the idea of an industry where 10% of a company's products underwrite the losses on the other 90% is inherently unsound. The music industry managed to make it work for a while, but the inefficiencies and alternatives have caught up, and the RIAA is going to have to adapt or die.
A little while ago, printing was banned in most of the modern world. This was because the good prople of the church knew that only they could speek the word of the gospal, and though that printed material may allow the devil to creep into the system.
As good church going citisens, RIAA feer this evil creeping into music, via the file sharing networks as we all should.
So by putting in legistation we can kill of the heritics that use file sharing networks.
Without the RIAA we would all burn in hell.
thank God the internet isn't a human right.
I really see this situation as capitalism at work. With the ~$20 "fixed" price point not all the buyers getting satisfied(you could argue most are not), and a black market of sorts has opened up.
Downloading mp3's and writing them to cd is not free. It takes hardware, blanks, and TIME. What the record industry should be doing is figuring out ways to get these people to actually buy the cds. I am not sure how much profit is in each cd sold, so I don't know what is the absolute lowest they can go. BUT, if I could buy cds for around $7-$10, I would buy many more to just see if I like them.
I downloaded Yankee Hotel Foxtrot and like it, so I am going to cash in my yahoo points (I buy lots of stuff on yahoo shopping for work) and get the album when it comes out. Of course the mp3s I downloaded are only 96bit, and are full of static :).
Would I buy the album if the mp3s were 320bit? Probably, but I might just save my money to see Wilco if they come to town. Would I buy the album if I thought it was bad? Probably not.
While Wilco IS one of the bands that I would buy a new album from without ever having heard it, I would be much more likely today to download some or all of the songs before making a purchasing decision. Occasionaly even bands I like put out crap albums.
What I would like to see is labels and artists put up all of their music that is no longer being printed for download. I would happily pay $4-5 to download mp3s, oggs, etc. of an out of print Alejandro Escovedo album. That is money the label and artist would never see if I spent $25 buying the album from somebody on Ebay.
Somewhat in connection with the Amazon vs. Authors story regarding used books sales, I'm rather surprised that the RIAA hasn't yet determined that Amazon is cutting too deeply into their profit margin when they sell used CD's... I'll be watching Slashdot for this inevitable suit.
Except that in a free market economy, if the price that "people are prepared to pay" for an item falls below the cost of production, then nobody will produce the item. The cost of production of something like a Britney single is quite high - the technology which makes it sound like she can sing, video production etc (in fact chart singles rarely make money). If nobody will pay for it, then nobody will produce it (hallelujah!).
This may seem like a Good Thing when it comes to the talentless, manufactured chart acts today, but ultimately it will affect everyone. Can bands like Radiohead really make enough money touring to pay for making "free" records? There is a cost.
"Under the iron bridge, we fist" - The Smiths, Still Ill
Rules of profit maximization in the modern recording industry:
1. You are what you listen to, just as you are what you drink and what you wear; you are the car you drive and stuff you buy. You must buy what everyone else buys to be accepted. People who choose not to buy are strange and suspicious; marginalize them at all times. Their politics must be repressed.
2. You must buy this thing NOW. You must subscribe to the illusion that you 'got it first'. Buying things later is not acceptable. You must buy when demand is highest and supply is limited.
3. You must believe and support the supposed American ideals of 'freedom of choice' and 'rugged individualism'. But then, you must buy what we tell you to buy and you must eat at McDonald's. You must drive a sport-utility vehicle.
4. We will use modern streamlined methods of industrial manufacturing, production and marketing; but at all times you must refer to our products as 'art', and the manufacturers as 'artists'. Our right to produce these products must always be protected; however, your rights to use the products or criticize them must be limited sharply. We do not wish for you to use the product, or even to enjoy the product - we only want you to buy it.
Everyone will start to cheer when you put on your sailin' shoes.
>
I said essentially the following about proprietary software in one of my very first posts to Slashdot:
The music industry is suffering the same phenomenon that got a certain part of the USA labeled "the Rust Belt". Technology changes; sometimes the window of economic exploitation opens, sometimes it closes. There was a time when you could become a zillionaire by covering your continent with railroads, but in much of the world that opportunity has passed, and in some places tracks are being removed. Technology makes things possible; technology makes things obsolete.
For half a century the music industry was needed by the artists: studios were expensive, pressing masses of vinyl was expensive, shipping stacks of vinyl all over the country/planet was expensive, racking it in stores was expensive. This needed middlemen with lots of money, and it was only right (IMO) that they made a profit off it.
But times have changed. A band that can afford a drum kit can afford a multi-track digital recorder; the internet can bypass the rest of the infrastructure. Bands don't need middlemen who have turned into fat cats. (At least not to get their music out; they may still need them if they want to be superstars and appear on the cover of magazines.)
As GauteL says, the music industry should be required to adapt to the changed environment. Instead, they want the USCongress to assure them their profits as an entitlement. Why should they be allowed that? What antiquated industry is it going to be next? Why should voting consumers put up with it?
This is nothing but trade protectionism, but in this case the USCongress is trying to 'protect' the US music industry from US citizens. Hey, Congress -- whose side are you on?
Sheesh, evil *and* a jerk. -- Jade
REM has reportedly the second largest recording contact in the planet with Warner Bros records. They're good friends with Wilco, who were dropped from Warners when Yankee Hotel Foxtrot wasn't "commercial" enough. Some quotes from recent interviews with REM. Only posting because it shows in some ways that one of the biggest bands on the planet (which they, along with U2 are), doesn't give a shit what the RIAA says:
...Really (looking surprised)?
"MS: Well the industry as we've known it is dead. Gravitational shift, complete upheaval and extinction. It makes way for the stuff I just mentioned, and kind of settles the "art versus commerce" dilemma. Where it will go from here I can't say, but it is certainly exciting to watch." - Michael Stipe
"MW: What are your thoughts on the Napster issue and free music over the internet, because it really annoys me.
MS: I'm fine with it..
MW:
MS: I like anything that shakes up the status quo, and in the entertainment industry, not just music, file sharing has certainly done that. We'll see where it goes from here. I have a few ideas of where it's headed."
- MS = Michael Stipe, MW = a country singer from Atlanta.
"Q: How do you feel about people trading R.E.M.'s music for free over the internet?
A: People that are looking for live & rare tracks online, well, that doesn't bother me at all. People that are too cheap to buy the CD's and decide to get them for free (online), well, I personally would feel bad about doing that. I feel like I would be taking something from someone, and I don't believe in that. When you break it down it's stealing, and there's no other way to look at it."
- Mike Mills
And of course the Yogurt man, Peter Buck talking about Wilco and the industry as a whole:
"ERK: Well, you have to look at the music industry right now. Its not conducive to artists like R.E.M., Wilco or anybody with remote talent (laugh).
PB: You know, that's the thing. Warners has been in chaos in America for five years and, you know, I just think they might have dropped the ball a bit this year, and not just for us either. That Eric Clapton record sure disappeared pretty quick.
ERK: Seems like every record they put out disappears...
PB: Linkin Park is the only thing that sold. You know, there are new people coming into Warners this week and next week, and people will probably get fired. It's a constantly changing company and we feel that, well, we have a commitment to them. They have done great jobs for us outside of the United States, and in America, who knows what went on. I certainly wouldn't point my finger at anyone.
ERK: The state of the American music industry, I think, is in a huge flux right now. Grant Lee Phillips is getting more promo for Mobilize than you did for Reveal, and you're on Warners and he's on Rounder. There is something not right with Warners.
PB: Yeah, well, put this into perspective. Aimee Mann sold a quarter of a million of her records out of her apartment with a guy helping her mailing it out. And Warner Bros sold 330,000 of our record in the States, with all the might of Warner Bros behind it. I love the Aimee Mann record, but I don't think there is a huge amount of quality difference between the two. I think her record is really great, she deserved it.
ERK: I've been following the whole debacle since Grant left WBR.
PB: Now, with Wilco gone too, what is happening is that these record companies are doing these huge conglomerations and essentially what they then do is drop half their acts. So instead of having what used to be 8 record companies with 60 acts, it's gotten to 3 record companies with 15 acts.
ERK: Then you have people like Rounder picking up what's left.
PB: When you consider, it doesn't make business sense to drop someone like Wilco, who makes the record company money. They are recouped, they don't owe Warners any money, they make records inexpensively and tour their asses off. They make critically acclaimed records, and sell half a million world wide. And there is always the chance with those guys that Jeff is going to turn out a Top 20 single that will blow one of their records wide open and sell eight million copies. You know, when I heard that they got dropped, I just thought it was the most insane thing I had ever heard. One of the things we signed with Warners about and we were so excited about was catalog, you know, people like Randy Newman for 25 years. Those records are in print. They held onto some really great artists and that is disappearing, and disappearing everywhere, not just Warner Brothers. There is no such thing as signing someone and they do great work and they back them. Now it's, you get one record and you're out.
ERK: Do you think there will be a resurgence or upheaval in the music industry like 91?
PLB: What I think is going to happen is that the major record companies, and they are in this position, where they are run by accountants and promo people who don't know about music. So they're just imitating each other. The promo people go, "We've got to have a boy band" and the accountants go, "We need to sell a few more records."
ERK: I think that is causing a huge thing for record labels. Websites have eliminated the need for distribution deals for some artists.
PB: When you're talking about Destiny's Child, where you can sell 10,000,000 more records if you get the right video and promotional push, that is when you need a major label. If you're talking about someone who is playing...a smaller artist, there almost is no need for a record company. Essentially, I think a lot of things are going to go through MP3, the net. You know, the play music I put up for free. Have you downloaded it?
ERK: Yeah, it was great!
PB: It was something that I wanted to put out there. It was only 7 minutes long. I trimmed it down to what I liked the best. I wanted it out there and didn't want to press it, choose a cover, a title, charge people. Essentially, I just wanted it out there. I'm into the idea of spreading things in that way. Eventually, I'd love to download whole concerts that way."
In Germany, 18% of 10,000 consumers surveyed said burning CDs resulted in them buying less music ... while 35% of people downloading more than 20 songs per month said they now buy less music as a result.
What about the 82% of germany consumers who bought MORE music because of burning cds? What about the 65 percent of people downloading 20 or more songs a month who bought MORE music as a result?
And how do CD singles fit into the picture? I remember the whole scandal last year about drooping cd sales, only to find in the fine print it was CD singles that were accountable for this statistic, full album sales themselves were either the same or higher. Maybe I'm talking out of my ass... Regardless, you gotta love how people always phrase statistics in a way that suits their view.
Joseph?
I'd much rather go to Best Buy(or the likes there of) buy a bunch of CR-R's, download someone's CD, then mail the artist $12. That way the "Machine" that is the music business dosen't get jack, which it deserves to get.
1) Weed out the lousy artists - find something that people will like.
2) Record the music, with the fancy mixers and recording studios so it sounds "right".
3) Distribute the music. With this could be considered promotion.
The real problem here is that the RIAA perform all three functions, but only gets paid at the 3rd step, while the Internet obviates the need for the 3rd step!
Via Gnutella, KaZaA, etc. the method of distribution has largely shifted to the consumer, and people frequently won't pay for something they can do themselves for much cheaper.
Find a way that RIAA, inc. can get paid for 1 and 2 above, and I think we can move on.
And, if you don't think that RIAA is important, and should be disbanded, go to mp3.com and listen to something BESIDES Britney, Nsync, and Pink Floyd. Otherwise, shut up and help figure this out...
I have no problem with your religion until you decide it's reason to deprive others of the truth.
Quote: It's an oft-repeated fact that record labels lose money on 90% of their roster of artists, and make it all up and then some on the 10% of artists and records that become blockbusters. ::
...Just work in opposite directions.
Believing anything a Hollywood accountant says is like believing Enron financial reports.
A few Hollywood accountant tricks that get quoted in the 'press' too often as fact and what they really mean.
9 out of 10 films/albums don't make money in the "Domestic Market". --- What this means is - they didn't recoup their entire investment marketing a product world-wide from a single country. It does NOT mean they lost money. It does NOT mean they lost money on the product in the domestic market. It only means that while selling a million copies of something in 20/200 countries - a single country in the mix did not make up their marketing & distribution expense for all of the rest of them from THE PORTION OF CD/FILM sales ALONE.
Music & films have a second life. You get paid when the radio plays them, when they are used in films/commercials, when TV shows feature your music. And you get money every time they are rebroadcast! Did the Mighty Ducks of Aneheim movie make money? At the US theater? No. By the time it was released to cable and to 200 other countries? Yes. Then there is the publishing rights and all that stems from that.
There are peculitarites in the US tax law which allow you to write off promotional expenses for selling your product overseas - but not have to add the sales from those manufactured overseas to your bottom line as income! Of course, you can also locate your HQ in Bermuda and avoid the problem all together. A lot of Hollywood accounting on the profit and loss side stems from this.
While record companies don't always get "everything" on their wish list in negotiations, they tend to get most of it. Most artist make their money on concert sales, and if they are smart they hang on to the publishing rights. Not all are.
Freedom is merely privilege extended unless enjoyed by one and all.