Slashdot Mirror
Study Suggests Music Industry Embrace Piracy
unassimilatible writes to tell us that according to the Financial Times, the music industry should embrace illegal file-sharing websites. A recent study of the recent Radiohead album release found that huge numbers of illegal downloads actually helped the band's popularity and, by extension, concert ticket sales. "Radiohead's release of In Rainbows on a pay-what-you-want basis last October generated enormous traffic to the band's own website and intense speculation about how much fans had paid. He urged record companies to study the outcome and accept that file-sharing sites were here to stay. 'It's time to stop swimming against the tide of what people want,' he said." Update 19:46 GMT by SM: Several readers (including the original author) have written in to mention that it isn't stressed enough that this study was engaged by the music industry itself, making the findings that much more interesting. Take that as you will.
Not saying that there might be some merit here, but this was hardly a scientific study. Someone simply looked at the number of downloads of a single album, by a single band and said "downloads == good." Sure, you can make statistics say whatever you want them to say, but this isn't even trying.
Secondly, it's no longer "pirating" if it's condoned by the copyright holder, eh? So, we're now expecting labels to just let everyone freely copy music? The problem here is that labels own the copyright and make their money from album sales. Merchandising and concert revenue, on the other hand, typically go into the bands' pockets. So of course there are bands out there that would love to use albums as a loss leader for their concerts. This kinda screws the labels though since the only reason so many people attend the concerts or buy the t-shirts is due to a heavy promotional investment by the labels.
I can't actually believe that I'm spending a few minutes of my life to defend major record labels, but we do need a bit of intellectual honesty and middle ground in this discussion.
Entrepreneur : (noun), French for "unemployed"
... though it might be good if they are constantly reminded that they are hurting themselves by going against consumers rather than with them.
The article is making the (increasingly realistic) argument, albeit in a round-about fashion, that the recording industry needs to adapt or die. They've got just about zero chance of regaining the revenue streams they had pre-napster, and so its time to think outside the box. Not a newsflash by any stretch of the imagination.
It's a choice between figuring out how to continue to make money (redesigning your business model) or making none (continually declining revenues for major labels until they can't afford to pay anyone in any case).
Y'know though, the labels and record companies are really just middlemen and the artists make their money from concert tours and very little from actual CD sales.
So why are we paying for the middleman?
People want *everything* for free.
Not really. It's barely worth my time trying to dig up enough iron, aluminum and other metals, as well as finding the oil and manufacturing the plastics, in order to build my own automobile. I would spend my lifetime doing this, and would nowhere near approach the quality of car available on the market today. I have other things to do.
However the perceived cost of a "song" - especially in the information age where anything digital can be copied an amazing number of times for virtually no cost - is very close to zero. Therefore that's exactly what I am willing to pay for it. Sure, the band had to spend a few weeks writing the thing, and a lifetime learning to play their instruments properly - that's why they get to charge willing customers for concert performances. Just like I get to charge my patients for the skills I have honed over the decades. However I don't become an overnight multi-millionaire just because I made a successful diagnosis with a single patient. It takes work, you know? The "entertainment" industry is long overdue for a "correction".
Seven puppies were harmed during the making of this post.
I know the knee-jerk reaction thing is a bit heavy around here but to proclaim that the RIAA hates concert sales because artists make money from them is a bit far fetched.
And as for bands who pump out multi-platinum albums who don't make a dime? I'd really like to see the books in that case. If it's true than there is so swamp land I want to offer these people. If you really have a serious fan base and you're not smart enough to go in and say "I sell records, I want a cut or you won't get any more recordings out of me" than you deserve whatever you get.
Do you honestly think that established artists who pre-sell in the hundreds of thousands of albums don't have negotiating power? Please. Now, there are cases where bands foot their own production costs and the band loses because they went over budget but even that is a rarity and somewhat of an unlikeliness today given the great reduction in costs as far as recording and mixing.
Dedicated Cthulhu Cultist since 4523 BC.
As an idealistic independent musician, I dream of staying indie, making free music for the fans and having the fans support me out of the goodness of their hearts. And maybe it can happen.
On the other hand, I just recorded an album (not released yet), and I value the producer/engineer's work tremendously. I would also be ecstatic to have someone take over many of my business/marketing tasks for me. It would be worth it to me to pay those people - not 90% of my income, but definitely some.
Assuming fans will continue to be willing to support the music they love, I can see the industry moving from "labels employ artists" to "artists employ a business staff." Those people would cease to be middlemen, but they wouldn't cease to be needed.
The industry needs to realize that a person not buying their products is not their customer, whether it is a subsistence farmer on the African countryside or a frequent visitor to the Piratebay and that ilk. So they need to start focusing on the real customers to actually make money.
The difference is that the visitor to Piratebay is MORE likely to actually turn into a customer. So why chase him away through litigation? The fantasy that they are losing money (i.e. has money taken away) is a fallacy, there is just potential income that is less than if they had bought the album. So you want them to do just that.
Turning into a fricking monster is not the solution.
The problem here is that labels own the copyright and make their money from album sales. Merchandising and concert revenue, on the other hand, typically go into the bands' pockets. So of course there are bands out there that would love to use albums as a loss leader for their concerts.
Okay, but I think the most important implication of this post is that perhaps there is absolutely no need for there to be record labels anymore.
Recording studios aren't even a hundredth as expensive as they used to be. Many bands - Radiohead included - have their own.
So if enough people are inclined to listen to music without having it on plastic disks in physical stores - why bother with the labels at all?
Sure, a band needs to be promoted, but the logical solution is for them to hire a PR guy - not for their PR guy to hire them.
"Beware he who would deny you access to information, for in his heart he deems himself your master."
You get to charge a lot of money for your skills not because they took so long to develop, but because the years of development means that your skills are rare.
Musicians, on the other hand, are a dime a dozen. The world is full of skilled musicians. It's even full of skilled musicians who can put on a good show, though stagecraft is rarer than people think.
The real skill on that side is in getting people to all want one particular song. The record companies used to be pretty good at that, through a combination of skilled production, skilled marketing, and collusion with radio stations. Nobody listens to the radio any more, and skilled production comes free with an iMac.
Marketing is still a wide-open field. Maybe somebody will figure it out.
They feared that radio would kill them (like the movie industry feared VCRs would kill them) but it was untrue; radio ushered in a new age for the record labels, with record profits.
In the US radio never paid royalties to labels (they did pay the songwriters) and in fact "payola", its illegal polar opposite, hapopened - labels paid radio to play their tunes.
mcgrew's razor: Never attribute to stupidity that which can be explained by greedy self-interest
This study is missing something huge. Widespread downloading of music only works as a promotional tool if the music is actually GOOD. If it isn't then it will hurt album sales. I'm sure the major music labels are entirely aware of this(and that most of their product is definitely not good) which is why they are fighting piracy with a vengeance.
If every artist followed the Radiohead model, or alternately released their songs for free at a reduced bitrate, then Radiohead wouldn't be unique. For one, they would no longer enjoy a price advantage over similar artists when competing for music consumers' dollars. But they would also suffer in a "public relations" sense. Radiohead's gesture generated a significant amount of goodwill toward the band. Among their fans, sure, but also among non-fans who just happen to want music to be free. Many of these non-fans or marginal fans may have downloaded the Radiohead album simply to reward Radiohead for taking a chance on the new distribution model.
I'm curious whether the apparent success Radiohead enjoyed is not so much due to the distribution model itself, but the fact that they're one of the few big acts to use that model.
It should also be noted that among the pantheon of artists out there, Radiohead's fan base is likely more 1) wired, 2) wealthy and 3) interested in the "politics" of music distribution than the fan base of, say, 50 cent or Carrie Underwood. If true, this would further boost the effectiveness of Radiohead's experiment beyond what an arbitrary artist could expect.