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.

Comments

What "study"?

[XorNand]

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.

Re:What "study"?

[I2egulus]

Before I start, I agree with parent post. Record labels that invest time in promoting an album have a right to some of the money too, though not nearly as much as they take currently.

The question though, is whether said labels are necessary to the industry anymore. Can a band sustain itself without a record label, while still releasing music in an album format digitally? I'm not one to pretend to be knowledgeable on the issue but I figure I can at least pose the question.

Re:What "study"?

[RonnyJ]

It's not even a good example of an album to study. Radiohead had enormous success with it, but they were hugely helped by two things:

1) They were already a very well-established band.
2) They had a huge amount of publicity given to them because the method of distribution was 'revolutionary' (and they got that publicity largely because of 1) above).

Re:What "study"?

[aztektum]

Who needs labels anymore anyway? If someone is interested enough in truly making music, they should find a way to do it and make money off it.

It isn't like labels are really promoting anything worthwhile anyway. They're more like a marketing machine. Miley Cyrus or Cute Cookie Cutter Female Singer #324,234,465 hardly qualify as "artists".

What's needed is iTunes that let's anyone on and you screw all to the record companies by finding a way to record your music w/o them. Home recording is hella cheap compared to a couple decades ago and there are ways of gettin' real studio time. Until you're good enough to warrant it though, flip burgers and pinch pennies. No different than any college kid eating a case of ramen a week.

Re:What "study"?

[TheLostSamurai]

The question though, is whether said labels are necessary to the industry anymore. Can a band sustain itself without a record label, while still releasing music in an album format digitally?

Let me answer your question with another question; Which band? If you're talking about Radiohead, then yes. However, if you're talking about your buddy Joe's local garage band, no. In the end it all comes down to the individual bands ability to market themselves and actually get their music heard.

Re:What "study"?

[zappepcs]

Short answer? Yes. The recording industry as distribution giants are no longer needed. That is not to say that there is no place left for their business, just none left for them to run it the way that they have been. Bands still need help with getting concert venues and promotion. I'll wager that before the large RIAA members figure it out there will be others jumping inline to provide such as is needed by bands who distribute electronically.
The old methods of finding out about new music are slowly failing. Commercial radio is floundering, magazines are not covering all the music available, so the market (roughly speaking) is wide open for competition to large record labels. I listen extensively to Internet radio. I live in a large metropolitan area and there is NOTHING on regular radio that I can suffer through for 6 songs an hour. I say this because if I have gotten to this point, you can bet I'm not alone and as a result the RIAA members are losing out until they start supporting the "New Way" of doing business. It is now completely legitimate and plausible to do without their services IMO.

The real problem for RIAA members is that they don't seem to realize how long ago this boat left the pier while they were partying at the boathouse. Now they have to play catch-up to the likes of iTunes, Napster etc. They have given their business away by being afraid to innovate and change with the times and technology.

Bands mostly sustain themselves on concert generated revenue, not record sales. The smaller the band, the more this is true. The internet sales model is giving some small bands more money than they could have thought possible without a record deal. Direct sales == money. Radiohead, NIN, and others are showing that it's not just a big money pit to throw away your profits in. It DOES work. Some reports say that revenues for a band from CD sales is negligible, so in these terms the Radiohead deal is a big deal. They got all the revenue from music sales. Despite mistakes or blunders, Radiohead and NIN are showing others how to do business in The New Way.

As technology takes it further, the avalanche of music available to users will overwhelm them, and they will look for the New MTV to help them limit their choices and search for the next pop idol. That is where Internet websites will slowly begin taking share from RIAA members. The new nexus of distribution is being the person who knows what is available and can help you find music you like.

So, in both short and long answer... yes!

Re:What "study"?

[badasscat]

Here at Brazil there are dozens of local bands that I never heard about, but are able to market themselves and earn money. These bands basically perform at regional shows, sell their albuns themselves and basically are ignored by the mainstream music industry. The music is basically "pirated" by the artists themselves, because it's sold on a such informal way directly by the band or by street vendors that copy and resell the albums as much as they want to.

Yes, and this is the way it's been done in the United States and England and Japan and everywhere else for decades too. Nothing new there...

Eventually some of this bands get attention from the general public and become know nationwide...

And here you've left out about a million steps, most of which involve a record label or at least some form of professional PR. (I'll get to your specific example in a minute.)

How do you suppose a band that's playing around locally and selling tapes or whatever to local people becomes "eventually" known nationwide? Every local area has dozens or hundreds of bands all trying to do the same thing, so why would somebody pay attention to a local band from 500 miles away?

The answer is they get mentioned in newspapers, they get played on radio stations, they make it into video games, etc. etc. Hopefully at some point before that they get a more professional recording made, which costs a lot of money that most local bands don't have.

None of this happens without a record label.

As for this:

And some even internationally, see the Calypso band for an example...

I've never heard of them. A quick Google search turns up nothing either. Searching for Calypso brings up results for calypso music, some technology company calling itself Calypso, a Calypso catamaran... but no band. Searching for "Calypso band" is similarly barren - lots of results for calypso bands, but no band specific named Calypso in the first few dozen results. So they can't really be all that popular internationally - not many people are mentioning them online or linking to pages that do.

Now, if they'd had a record label, maybe a different story. Record labels have SEO specialists that would ensure they'd be high up in search results. They'd have a nice SEO-friendly official web site with a blog or two. They'd be setting up tours. They'd get them on appropriate radio stations and TV shows. An associated PR agency would be sending out press releases and samplers to various publications.

Like the parent, I can't believe I'm here defending record labels, but the fact is they do serve a purpose. That doesn't mean I support everything they do or that I think their current form is right for the way music is distributed today - their business model is still very 1950's, and they need to get smaller and streamline. They also need to acknowledge that the internet is not going away. A lot of bands might not need a "full service" record label, but then they shouldn't expect as much help either (be it financial or practical).

Re:What "study"?

[Dun Malg]

I guess Google searches are more or less influenced by the country you're at. Google.com.br returns lots of results for "Banda Calypso"... Banda is portuguese for band.

Heh. Looks like the GP poster isn't as bright as he fancied himself:

"I've never heard of them. A quick Google search turns up nothing either. Searching for Calypso brings up results for calypso music.... but no band. Searching for "Calypso band" is similarly barren

Always there are subtle pitfalls when you try to look sharp... like remembering that other countries speak languages other than English, and that when searching for a Brazilian band, perhaps one ought to use the Portuguese word for "band"... and maybe even searching google.com.br...... or perhaps even coming to the conclusion that "calypso", being a a word already heavily associated worldwide with an entire genre of music, might not return a hit on the first few dozen pages for a small, locally famous band in Brazil...

This isn't news anyway...

[Jane Q. Public]

... though it might be good if they are constantly reminded that they are hurting themselves by going against consumers rather than with them.

Re:Why would I want to give away my product when..

[Etrias]

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?

Re:It's good to have wants...

[Dunbal]

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".

Middlemen? Yes and no.

[Nerdposeur]

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.

Re:RIAA should learn...

[sm62704]

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.