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Research: File Traders And Music Purchasing
An anonymous reader writes: "Like a TV preacher taking excerpts from the Bible to support a contrary thought, the results of research can be similarly interpreted in opposite ways. Edison Research just released a pro-record industry report stating '10.1% of 12-17s are actively downloading/not purchasing music.' Richard Menta over at MP3 Newswire noted that this also means 90% of file traders are buying music, a positive result that supports the virtues of trading. Menta then goes through the study's findings one-by-one, questioning Edison Research's conclusions. This includes their recommendation to the industry to fight the 'downloading problem.'"
I like to consider my money an investment into a band I support - the more money they have to spend, the more music I get from them in the future. And just like any investment, one must have research tools on hand to ensure that your money is going to get a good return - It just so happens that in my case, its gnutella. Its not piracy - its good business. Surely the RIAA understands that.
10% is a _huge_ number to a capitalist corporation. They won't stop short of murder to get this 10% in their pockets.
This is the game of greed.
"I don't know that atheists should be considered citizens, nor should they be considered patriots." George HW Bush
People that critique the RIAA/MPAA business model tend to not really think-through the long-term self-interest of themselves. They toss around terms like Information Age as if it only describes their ability to search Google for the theme of a 50s sitcom, and don't consider the thought that developed nations are more and more using information economies to derive their value, as physical production is exported to sites of cheaper labor. There's only so much in the "service market," and so much in being able to capitalize on the relatively expensive realm of expanding the quantity of information capable of being used.
Another possible option is to download the songs you want, or a whole cd of you so desire... then find the band's contact address and send them a bit of cash. Perhaps it'd only be symbolic, but I know for a fact that the $2.50 you send them in the mail would be substantially more than what they'd get otherwise - plus, the band might just get that "playing music for the sake of music" feeling again. It's worth a shot *shrug*
I'm trying hard not to sound condescending, but you do realize the fact that your playlist often syncs up with what's on TV at the time means that your playlist is pretty limited, right? I haven't been a serious viewer of MTV or VH1 in quite a while, but I still occasionally flip through, and the one thing that always stikes me about it (aside from the lack of music on music television), is that just like mainstream mass radio, the playlists on MTV and VH1 are very, very small. Like on the order of 2 or 3 dozen songs available to be played, tops.
Now don't get me wrong, I'm not saying that all that music sucks, or that your taste is bad - I like plenty of music that is popular - I'm just saying that there's a much wider world out there to choose from as well. I really think if people sampled a little wider variety in addition to what they like in the mainstream, the overall quality of music available and promoted would be dramatically increased.
And for me, that's where the internet comes in. I've been exposed to so much more variety in the last 5 years than ever before, and my music collection reflects that.
Seriously. The only software I buy anymore is Linux distributions, the odd computer game, and a rep theatre movie ticket. Plus, there's no way I'm going to pay for a CD that I can't preview, and without Napster that pretty much means I either steal from my friends or develop a deeper appreciation for the stuff I already have.
I look at all the media corporations out there and I see rich bastards at the top who are looking to fleece their customers, employers and investors so they can buy that umpteenth car or beach-house. Whenever competition comes up, these corporations try to squelch it. If wage earners base salaries went up in the same ratio as corporate CEO's over the last two decades, we'd all be earning at least 20$ per hour.
If CD's, software and movies were priced according to the realistic cost of production, maybe I'd be a little more inclined to pay. But, since it's not, and since the sham rich people pretend is capitalism keeps it that way by killing upstarts, I don't have any option other than to pay (thereby enabling the system I want to fight), or pirate.
So, really, I'm doing it out of a sense of duty. That and the fact there's no way I'm forking over $15 for another mindless Hollywood blockbuster, $25 for another crap-filled album, or whatever inflated monstrosity of a price Microsoft is charging for an OS upgrade. Fuck that.
Just my two cents.
If cd's were more resonably priced I think more people would buy them. I can go out and get a casset for around $10 where a cd would cost me around $20 usually. Cd's are cheaper and easier to make than cassets and they are no longer new technology. The only reason they are so expensive is because RIAA makes them that way with their oligopoly.
The real problem is, when i like a song i download the MP3's from the album to check out the album. I now have a very effective crap filter the industry cant work around (yet).
ON the other hand i have found CD's that i really want to purchase through the method, happened more often when Napster was up.
Yow! That's active passive resistance. Ghandi would have been so proud.
But here we go again, the same old crap we have seen with other research and - especially - with benchmarks. Some company, club or whatnot buys a researcher to bend statsitics their way and hopes that no one really notices that they're just reading a modified excerpt from How to lie with Statistics/Charts. And most of the time it works, because most of the really important folks (legislators) exceeded their level of competence when they were elected (you know who you are). They get those really biased statistics on glossy paper with lots of really biased charts, have a look at it and say: "Man, those [insert enemy here]s are really bad and should be [put against the wall|fried|gassed|drowned|beat to teath|stoned]." (Personally, I'd prefer the last one afther ther Berkeley definition.)
Then, it all ends. Why? Because any counterargument comes on standard paper, printed all in black with perhaps one or two graphs meant for people who know what they're looking at, and not for decisionmakers!
In the end, we can all just sing and hope that the revolution's coming and we get to decide who's to be put against the wall. Or at least who's to rethink their corporate policies to avoit a smack-bottom.
Fight hunger. Filet a politician and send him to a 3rd world country of your choice.
How did the Greatful Dead do it? They made money from concert tickets, t-shirt sales (Hey, that's the sweetest pie! quoth Krusty.) and probably a little from album sales. But they never really cared about concert bootlegs. Don't know how they felt about trading actual albums.
I'm not a deadhead by any stretch of the imagination, so maybe someone can explain.
Concerts are where most bands make the vast majority of their money. The only people making real money off CD's are their labels. The only reason bands need the albums at all is to raise awareness for their concerts. So if they can use the Internet to make others aware of their existence, the labels are no longer nessecary. Excellent business model, but theres no place in it for the RIAA, and hence they'll fight it every step of the way.
Why?
Ah, such beautiful doublespeak. Would you like to hear the sad tale about the twenty-something who is actively not purchasing a new Lexus? In fact, said twentysomething actively doesn't purchase a new Lexus every single day of the year. Assuming a new Lexus costs $40,000, that adds up to nearly $15million per annum, which is a lot of lost revenue for the high-end car industry.
When questioned, this twentysmoething admits he feels no moral misgivings about accepting rides to work in his neighbor's Lexus without the company's express permission, and will probably continue to get free Lexus rides without paying in the foreseeable future.
Something needs to be done about this not-buying Lexus problem!
One model that can work has already been mentioned by someone else: to focus more on making money from live performances, a la Grateful Dead. Not everyone gets to create something and stamp out millions of copies very cheaply, making huge profit margins on each one. The music industry is actually something of an anomaly in this respect.
Providing convenient and cheap downloadable music would also help, so that it's easier and preferable to pay a small fee to download a high-quality recording than it is to copy a crappy one. No-one has yet actually done this, the middlemen are all too busy resisting the inevitable reduction in their revenue stream.
The fact that middlement are being disintermediated doesn't mean that there's no future for the industry as a whole, just that there's no future for certain kinds of middlemen.
RIAA members won't fall all over themselves to copy whatever successful model arises, because that model will not involve them at the profitability levels they currently enjoy. However, I'd bet that consumers and artists will both find the end result more congenial, on average, with the possible exception of the likes of Maddona, Britney, and the Back Street Boys.
"If the record labels make a concerted effort to get their artists to educate the public about how downloading takes money directly out of the artists' pockets, things may change." This quote tells it all. The recording labels view artists as a commodity they own, like slaves. They tell artists, "I made you a star, and I can take it away!" What nonsense! They view music fans as a commodity as well. Boycott the recording industry. Don't buy CDs. We, the fans decide who is and isn't a star. The RIAA and record executives are the real pirates.
The Uncoveror: It's the real news.
Don't forget to mention that the artist retains the copyright to their music instead of being forced to sign away their control, practically if not literally, forever.
I'm with you. I keep hearing about the "outdated business model" that the RIAA are using. Ok, I'll stipulate that, so what's a model that works?
The problem with this question is that no one will ever accept anything as the right answer. The current situation with the RIAA is like a gasoline fuel company trying to keep their profits up when everyone has switched to electric or hydrogen cars. The market is simply gone, and the best that the company can hope to do is sustain itself by changing to a new, smaller business model that serves the few customers that prefer their product. Like or not, it has become a solid fact that people now regularly trade music between each other and burn mix CDs for their friends. From here on, the RIAA can hope to keep themselves from dying by finding a newer, smaller business model, but they cannot get back the annual profits that they once had.
I'd propose a new business model for them, but I'm one of the people that just thinks that the RIAA is doomed and that the music "industry" is bound to join the art and book "industries" as small but popular businesses that offer a good product at a sane price. I believe that the days of musicians being huge superstars and their companies making billions of dollars are reaching their end, and that that is not as bad a thing as many people think it is.
If the artists were being paid more
I won't buy a CD because there's only 1 or 2 songs I like on the album
If the cost of a song was $1 to download without restrictions
I'm a poor college student, so I have to download them...
I will pay to support indy labels
While there's a free alternative I'll just use that instead
I already own the CD
You see, when you get right down to the point, it's all just a bunch of excuses. No real substance.
Thanks, Me
I suspect the music stealing that's going on is not just a problem of how easy and penalty-free it is, but also a function of people feeling a little vague about where that $15.99 is going in the first place. I, personally, have this picture in my head of a fat-cat record executive standing on his penthouse balcony with a fist full of cash tossing nickles and dimes down to starving musicians clad in filthy rags groveling in the street below.
But is the distribution simply $15.89 to the exec and $0.10 to the artist? Has anyone done a comprehensive breakdown of where all the money goes? A&R, advertising, promotion, marketing, etc.? A link would be appreciated.
I'd love to see Ross Perot come on national TV with a pie-chart: "See right here? Two dollars* of every CD goes to the A&R guy. Can I finish?! Two dollars, people! That's over twelve percent!"
*DISCLAIMER: I have no idea how much money actually goes to the A&R guy.
The RIAA represents a business model that might not be necessary anymore. As many have stated many times before, the artists make their money from concerts, merchendise, and other outlets, and not so much from the sale of CDs that you buy in the music stores. Those CDs are almost completely for the expressed purpose of marketing the artist so they can make money elsewhere. CDs are the RIAA's baby.
Its possible, we simply don't need them anymore. Distribute everything in mp3 and cut out the recording industry completely. It wouldn't hurt the artists any, and it would completely eliminate the whole piracy issue. Of course, there is a chance that the RIAA DOES provide a useful service, but I find it hard to believe that artists won't be able to get coverage if the RIAA isn't around to support them. Radio will still play the good stuff, and they will actually go looking for the good stuff. People will send in good stuff for them to play. It'll happen. It can work, and the RIAA and the companies it represents simply don't need to exist.
Of course, I'm sure they have a different opinion in the matter, but times change. Industry changes. And they had a good run. But its ending. It might be in their best interests if they realize that now and change to match the way the world is going, or they're going to become the insignificant righteous.
-Restil
Play with my webcams and lights here
You have the usual misunderstanding of the purpose for RIAA labels trying to put MP3 downloading and Internet Radio out of business. Evidence that these act as cheap promotion for albums is abundant. The problem isn't that record labels object to cheap, the problem is that anybody can play, anyone can upload to P2P or submit a record to a Internet Radio station, the payola the RIAA labels provide for a monopoly on FM radio access suddenly becomes a lot less valuable.
You also don't quite get that sales/revenues are declining for both FM radio and major labels. Is it because of downloading? Let's take the word of the RIAA for a change since they tell us that the 90% of download users buy CDs. This tells us that people are buying, if it's good... and what they are paying for is better than 128K MP3 sound so they can hear something they like better. The MP3s that are played with the listener saying "what total shit" going into the bit-bucket and he's just saved $20. Part of the RIAA model depends on the listerer finding out that an album is crap AFTER paying $20 for it.
One can blame this the decline of sales on the recession, but I would attribute to the "mass market" fragmenting into niches which are getting small enough to limit the potential market value while simultaneously increasing the expertise required for the labels to know what they are selling, who they are selling to.
Their attempts to use traditional marketing, focus groups, polling, etc. to find the next million-record seller are an attempt to hit a target that is not only moving, but becoming illusory. Why are people turning off FM radio? Why did you? If it doesn't cater to your tastes, why bother?
However, this doesn't answer the rest of your question. The answer is drastically cheaper promotion and physical distribution making it possible for a record label to break even / profit on far fewer sales. A record label that intends to be around in 2020 needs to find a business model that doesn't depend on a significant number of their artists going consistently platinum.
The goal here is to make sure that an artist selling 10K records is a profitable and prosperous one. Since an artist who is selling 10K records a year that she is producing and selling herself is grossing about $100K a year, the question is... how can a record label add value to this product to justify an artist doing business with it?
The other point is that with the fragmenting of the mass market, a record label that depends on a few record artists going platinum to allow making a profit despite the other artists who "only" sold 5K or 10K or 20K records is going to find increasingly fewer platinum records and ultimately, will find itself in Chapter 11.
Remember, an artist who sells his own music and finds an audience of a few tens of thousands of people is better off without an RIAA label supporting him. Musicians know that the odds of signing with a label and going consistently platinum are not only comparable to winning the lottery, but if the label gives up on that person or band, that person/band is no longer able to sell his/their own music.
One piece of the puzzle is missing for a record company to make this new business model possible. The TVD (terabyte removable media in CD/DVD form factor) won't be out until next year. This would make possible a black box driven by a TVD jukebox that would allow CD-on-demand purchases at any record store which has a copy. Automated production equipment for CDs on demand already exists. It would need to be repackaged for non-geeks...
This allows full quality CDs to be purchased at any record store which has the black box and TVDs from each record label they carry. Each record label could send a TVD out weekly or monthly with every single record on the label, including the back list. Encryption could be used to allow only legitimate stores to use this to make copies. Automated record keeping can be done with the machine to tell the store who to send checks to every week.
This eliminates physical production and distribution of CDs from the label POV. This also eliminates a great deal of the financial risk with respect to signing a band, as the incremental cost of getting them into stores drops to about zero.
Promotion? Stop worrying about "anybody can play" and start supporting Internet Radio (unfortunately, outside the US) and MP3 networks. Start buying ads in music print media to tell people where the new "cool places" to find new music is. Make effective use of the Internet. Don't try to be all things to all people, find a niche and try to expand to neighboring niches. Keep overhead low and develop serious expertise in a category to allow effectively helping the artist to promote themselves. The converse of this is that musicians won't be able to
If a record label develops the expertise to pick artists and give them effective support at a low cost to the label, they don't need to worry about controlling promotional channels.
Once word gets around to musicians that XXXXXX Records knows how to market, to Internet Radio that they can pick music people actually listen to, and to the industry that they are making real money with a collection of artists who wouldn't even show up on their mid-list and haven't spent a penny on FM payola, a monopoly on FM Radio becomes a whole lot less valuable.
You wanted a new business model? While I think the technology and environment probably makes other alternative models possible... I've certainly answered your question in detail adequate for a slashdot post, anyone who wants me to work on this further can discuss my hourly consult rate with me.
Tech Public Policy stuff
And I don't ask anyone to work for free. If the artist doesn't want to produce music, that's fine. But the market has spoken and the market will no longer pay for the digital representation of a song. I'm part of that market and will continue to pay the current market price for sound recordings: zero.
And with that statement you debunk two arguments: yours and another of the prevailing sentiments on Slashdot. Firstly, the market has not spoken; the mob has spoken. Do you consider "the market" to be so broad as to encompass theft? I may just go out and buy me a Porche (which I have conveniently valued at $0).
Secondly, for all the people bitching about how the artists aren't being fairly compensated, the reason is that there is a huge glut of wannabe musicians out there. The labels know that if you don't want to sign away 90% of your royalties to get a contract, there are 100 other bands out there that will.
I know they won't get 260 gigs a year. I know there are expenses. There are also expenses involved in getting a 4, 6, or 8-year education for those careers that require it. And we all have to eat, too, whether at home or on the road.
We all have to eat, but most of us don't eat in restaurants every day. It's expensive (unless you want to eat complete crap). And to be a musician, you have to learn to play an instrument. I know some punk bands brag about how little they practice, but the bands I like are composed of very talented musicians. Heck, some of them even went to university to get a degree in music.
My point? Where is it written that musicians should earn a lot of money? There are a ton of jobs where the people earn peanuts. Many people can't even make ends meet, but they still go to work and do their job.
People who are good at what they do deserve a chance to make good money. You have organized it such that even a successful band will barely break even. And for the privilege of making peanuts, they have to literally live on the road. That's just crazy.
Just as there are people who love to write code and make it open source and free for everyone--and many of these projects are arguably better than those which cost $300 off the shelf--there will be musicians that will create good music (arguably better than Britney Spears) and make little or no money doing it. Heck, if you consider their time they might even lose money... just like open-source programmers.
Well I happen to think that the GPL is a communist plot and open source contributors are idealistic dupes, but at least free software advocates (mostly) don't advocate stealing proprietary software. If free music advocates simply made equally good music and allowed people to copy it that would be defensible, but consumers are greedy and they want all the best music for free. If you remember, that's all Lars Ulrich said anyway: I don't mind if bands want to allow people to share their music, but no one ever asked us if we wanted to participate.
And no, I don't think the music out there would be as good if it was impossible to make a living as a professional musician. Britney Spears would probably continue to do quite well, seeing as she is a performer and is capable of filling stadiums. The one who gets screwed is the guy who writes her songs, which is a shame because I thought some of them were quite well written.
-a
How to rationalize theft.