Music Industry's Future Foretold in China?

sapphire writes "An article today in the International Herald Tribune provides a look at music piracy from the point-of-view of pop stars in China. China is a country forced to deal with the reality of unchecked piracy of digital media products. Will their experience lead to new business models for the world-wide recording industry?"

Comments

China's artists not receiving royalties

[Rojo^]

"There is no income from the royalties, so artists in China record single songs for radio play instead of albums for consumers," said Lachie Rutherford, the president of Warner Music Asia-Pacific. "Stars need to look elsewhere to finance the rock-star lifestyle."

So how is this different from the U.S? The RIAA keeps all the money from album sales. Or, according to those wacky flash animations with Lars Ulrich and James Hetfield -- you know what I'm talking about (reliable source of factual information), a few pennies of each CD. The real money comes from concerts or other live performances. Or, in Will Smith's and DMX's case, movies =)

Examination of piracy in general

[vga_init]

Piracy has seemingly always run rampant in China (always meaning the past few years I have spent examining its occurance in the country), and may be considered even worse in other parts of the world.

This article deals mainly with music theft, but in reality, all manner of digital information is finding ways to slip through industry fingers as media becomes cheaper and the internet becomes popular.

I once spoke to a Russian programmer on Odigo who claimed that he had never met anyone in Russia who had paid for windows; according to him, all copies he had ever seen were pirated.

Though I don't have anyone to bear testimony, a similar trend seems to be occuring in China as well. Not too long ago I remember an article posted right here on /. about Microsoft offering the Chinese government large sums of money to use Microsoft products (primarily in eduction, I believe) as well as attempt to crack down on high levels of piracy. Did China ever accept that money; was the deal even real? Though I never heard the end of that tale, the "Chinese government officially adopts linux" announcement came, ironically, shortly thereafter.

The bottom line is that people just won't pay for something if they can get it for free, be it software, music, or what have you. While piracy is not as blatant in America (ie you can't just walk into your local supermarket and buy pirated Windows CDs), the problem continues to escalate.

However, there is economic light being shed on the subject. As the article points out, it isn't destroying musicians, but just changing the way they operate. As record sales decline, artists need new sources for revenue (god forbid anyone should have to go out and actually play their music).

In software, there have always been little tricks to combat piracy, but they don't always work as well as intended. I believe that the software industry will be hurt by, and therefore change more drastically as a result of, piracy more so than the music industry.

The real question is, what changes are going to come about as a result of this fact? To me, only time will reveal the answer.

... aaah, you're breaking my heart!

[missing_boy]

That's really cute, you know. I thought everybody around here was all in favour of making your own fortune, not considering the fact that one man's gain is another man's loss.

I think your point is excellent! It's the very same thing that leads to the bancrupty of NHL teams (too high salaries, tickets too expensive, etc.): the league is getting out of touch with the market. Who can afford 4*$100 tickets + parking and burgers to bring the family to a hockey-game? This might seem off-topic, but my point is this: a "rock-star lifestyle" is ridiculous any way you look at it. Also, why on EARTH do the Friends "actors" make ~$1M per episode?? This is what I'm talking about: overpay. Get real and be happy with a couple of hundred thousand dollars a year. That's many times more than what most of us make.

Re:Information Devaluation

[ATMAvatar]

I'm not quite sure it's worth comparing China's music industry situation with the possible future of the industry here in the US. Arguably, the piracy in China has far different causes than piracy here has.

From the CIA World Factbook 2002 - China:
GDP - per capita: purchasing power parity - $4,300 (2001 est.)

To me, that says that piracy is probably as prevalent as it is because people simply cannot afford music at the prices they'd be with a legitimate album sales market in place. Perhaps I'm wrong - it could very well just be a social issue, stemming form differing cultures.

Here in the US, though, there are probably a number of factors for music piracy.

Price may be an issue for some. As a college student, I can't really afford to spend $20 a pop on CDs when my school is sucking me dry.

For others, downloading music may simply be a way to preview music. The radio stations play nothing but top 40 crap unless an artist pays the station to get their stuff on air. Sometimes the only way to expose yourself to new music is find it online and download it.

Still others pirate music because of a philosophical disagreement with the industry's treatment of artists - money from albums goes almost entirely to the labels. If we want to support our favorite bands, we would be better off going to concerts.

On top of this, typical record contracts state that the label owns the music. To me, this is a travesty, and totally contradictory of the whole point of intellectual property and copyright. Who was the most successful band in history? The Beatles. Who owns the rights to all the music produced by The Beatles? The Beatles? No. Why not? Their contract gave the rights to their label, and when the copyright came up for renewal, someone else (Michael Jackson) renewed it. Personally, this part bothers me the most.

Many artists get stuck in contracts that give ownership of their music to their label, and if they wish to perform their music after their contract expires, they have to pay their old label to do it(assuming the label even allows them to play it). However, this isn't limited to the music industry, and the rant is best saved for a "why copyright law needs to be gutted and rewritten" topic.

Other people dislike how the record labels treat music consumers. Price fixing, filler music, bogus copy protection schemes, DMCA, DRM, and to top it all off, big, rich executives telling me how, when, and where I can listen to music I bought... doesn't make me think fondly upon the prospect of supporting the music industry. It seems that with every RIAA-related press release, I find myself more determined never to buy CDs again.

In spite of all this, though... I genuinely want to pay for the music I have, so long as I could guarantee that the artists get a decent share of the money. I like the feel of owning things, and I like the feel of giving money to people who make things I like to use. I would imagine many people feel like I do. As a result, I can't really see the Chinese model happening here. There's a certain pride embedded in the idea of owning something in our particular culture. Instead of seeing pirate booths lining the streets, I can forsee labels finally getting the clue and changing how they sell their music or the artists breaking free of labels and finding a better way to distribute music...

...that, or the RIAA/MPAA will successfully lobby Congress to enact further legislation that effectively limits our consumption of intellectual property to what the RIAA and MPAA want us to consume. If (when) that happens, I'll start practicing my "eh?" and move north.