Slashdot Mirror
It Took a Couple Decades, But the Music Business Looks Like It's Okay Again (recode.net)
According to latest number from RIAA, music sales in the first half of the year were up 8.4 percent, to $3.4 billion -- the best performance the music industry has seen since its peak days back in the CD era. Recode adds: That boom is fueled entirely by the growth of paid subscription services. This year's numbers include Apple Music, which didn't exist a year ago but has 17 million worldwide subscribers today, as well as Spotify, which has been growing faster than Apple and has 40 million global subs. Digital downloads via stores like iTunes, meanwhile, are falling behind. Those sales dropped 17 percent to $1 billion. And some people still buy CDs, but soon that business will be a footnote: Those sales dropped 14 percent and now make up just 20 percent of U.S. sales. All good, right? Not according to Cary Sherman, who runs the RIAA, the labels' American trade group. He has a Medium post complaining that YouTube doesn't pay enough for all the music it streams, almost all of which is free.
now they can't blame piracy for poor sales.
FU, make some good music and I might buy it. Else, fuck you RIAA nazis.
Re: YouTube not paying enough.
Pick one of the above. You can't have both, you can't pick both. You get to exert an outsized control over the medium which is going to cost much of that profit in the form of maintaining the outsized control. People are clever and will figure out ways around automated filters and counters for no other reason than because they can. It's a challenge to overcome. Countering that takes time, effort, and most importantly money.
Or you can give up the outsized control and get the profit from the views on your "channel" or whatever self-organization YT comes up with next. That's the way it works. You can try making your own streaming platform, but I'm fairly certain we all know how that's going to work out. Complaining about it isn't going to change anything.
The record labels, hell, the media business in general had all the warnings that their world was changing and they had best get along with it. But those in charge stuck their heads in the sand and ignored it. This is the result.
About is profits, and about the latest music distribution technology - this goes back to the days when the music industry made money by selling sheet music, and faced the threat of wax cylinders, player piano rolls, then radio play, etc.
Back in the 1990s, when profits were at a (then) all time high, due to people replacing their LP and cassette collections with CDs, the industry was complaining about piracy and got a tax on blank CDs imposed, a straight up subsidy for a highly profitable industry based on zero evidence.
There has never been a new music distribution technology that was not claimed to be a threat to the industry's profits. Another eternal verity - every profit peak is taken to be the "natural" profit level that only despicable piracy could be responsible for eroding.
Actually it is worse than that. The growth rate ramping up to the peak is claimed to be the "natural" state of the industry and year-after-year perpetual profit growth is "normal" and any reduction is due to those nefarious pirates. (And now direct music sales! The horror! Musicians selling music direct to fans! This must not be allowed to grow!)
But an industry whose revenue is due entirely to controlling access to the creativity of other people is like that.
Second class citizen of the New Gilded Age
Technology marches on. There was a time when expensive recording processes lead to expensive presses to create shellac, and then to the expensive process to record music onto cheaper-to-make tape. Without digital computers to handle all the engineering, engineers had to manually adjust the recording of a record, making the grooves wider or narrower to fit the sound being recorded as you moved toward the inner spiral; this all had to transfer to a master record, used to produce negatives which were then pressed to create records. Those eventually wore out (well, got damaged well before that), and you'd have to make more, until the original masters used to make stamping presses were no longer usable and had to be recreated.
The same problem comes with tape: a copy of a copy loses fidelity, and the master tape eventually wears out from use, so you're using a copy of a copy of a copy (copy the master to the tape used for duplication, then duplicate from that), and the damn tapes take forever to record. The process was simpler, though, and digital mastering tapes are easily copied without error; thus you can have perfect back-ups of the master source, the final mix, and the tapes used in the duplicator to make the analog product.
Digital electronics eventually brought CDs, which are digital, easy to duplicate perfectly, and easier to press than records and tapes. CDs are pressed into polycarbonate, then backed by aluminum foil, and lacquered to protect the foil layer. The material is cheaper and easier to handle than shellac or lacquer; recording is a pressing operation; and the masters are easier to reproduce than gramophone masters. This is a lot cheaper than tape.
Now we have digital distribution, which costs near-nothing. Millions of dollars go into services which distribute millions of songs to millions of subscribers. Spotify has 20 million songs in its portfolio, 40 million *paying* users, over 100 million total users, and 1 billion streams per day. Spotify pays literally several million dollars for its infrastructure costs, and almost $2 billion for licensing fees. The physical cost is around a dollar per 10,000 songs streamed, or 1/100 of a cent per song.
Tell me why they shouldn't ship more units for less revenue when their costs are now damn near nothing. The cost of music production isn't that much lower; but a $2 CD with 10 songs is still 2,000 times as expensive per song as digital distribution. It's so much more expensive that we don't even just download the damned things once; we REPEATEDLY RE-BUY THE SAME SONG BY STREAMING IT OVER AND OVER AGAIN, because the cost of distributing a song is one one-hundredth of a cent and we have to buy it a hundred times to spend a penny. The fair cost, considering production cost, may be 5 cents or it may be a dollar per song; and almost 100% of that is production cost, while distribution costs nothing.
Distribution used to carry a hefty cost. Now any moron with a $50 microphone and a laptop can record, master, and distribute his own music. If you're using digital production (Modplug Tracker), you don't even need special equipment like instruments. Why should the music industry represent the same revenue per unit shipped as it has in the past? If it did that, it would represent literally dozens of times the profit.
Support my political activism on Patreon.
After a decade or so of blaming piracy for its own internal lack of vision, the music industry is finally looking good again since it finally embraced technology to give its customers what they want.