Given that file sharing is not going away what does the music industry do?

[astro]

How do you make a buck in the new millennium where file sharing may be illegal but is also ubiquitous. What are the real world options for the music industry? Are the gravy days over for the big acts?


Do you tour more and do more live shows?

Implement more diabolical copy protection schemes?

Legislate stricter penalities?

Change the structure of the net itself to prevent file sharing?

Accept that digital file sharing is here to stay and try to compete with a better (however defined) product?

What do you do to keep that multi-media conglomerate stock price up?

[robertliguori]

Foist off, copy protection won't work, for the simple reason that computers can record sound directly to a .WAV, and convert it to MP3, with a minimum of effort. Penalties mean nothing: <click> "What music, officer?"
The net's here to stay. Basically, a medium through which child pornography and bomb recipes pass without a trace could swallow almost any informational industry with nary a burp. The real question is what happens to movies when broadband widens a little?

[NutWrench]

Evolve?

[Sam Stone]

Adapt. VHS didn't kill the movie industry. Neither did Blockbuster. Cassette tapes didn't destroy the record business, and neither did Minidisc or the recordable CD. And in all of these cases, the various industries went ballistic and tried to stop the technology. And in every case, their profits went UP after they gave up the fight and worked with the technologies instead of against them.

If you ask me, the record industry should embrace the new technology, and work with it. Copy protection is a non-starter - the only way you can do it is to force every manufacturer to put a copy protection chip inside every piece of equipment that can store digital information (there's a bill in congress right now that seeks to do just that - if your congresscritter supports it, let him know how insanely bad this idea is).

If I were a record exec, I'd be thinking about installing kiosks in record stores that allow people to choose songs like a jukebox and then burn them on a CD for ten bucks. I'd open an online store to sell MP3's for a dollar each. I'd lower the price of CD's to the point where it doesn't make sense for the average person to go to the hassle of burning one. I don't know what that price is, but I suspect that at $9.99 or $6.99, CD's would fly off the shelf.

I'd do what the DVD makers have done - put out a basic album at a low price, then put out the 'special edition' album a few months later, recorded at very high resolution in DVD-Audio or SACD or both, with a couple of music videos on it, and some GIFs of cover art. And maybe even some special features like a 'mix your own' feature that has the raw tracks and allows you to mix them yourself. Photos of the band, movies of the recording session, etc. Sell THAT for the price of a DVD. And it would be much harder to copy that and distribute it over the internet, because there would be Gigabytes of data.

Be creative. You can't keep pandora's box closed forever, so you'd better learn to work inside it.

[Triskadecamus]

You know, the contention that file sharing has cost the music industry anything at all is not supported by the evidence of any statistical comparison of the amount of file sharing being done, and the income of the record industry.

I know of more people who have bought CD's because they heard shared files, than people who decided not to buy CD's because the shared files were available. The statistics show that sales were up during the period that Napster was most active. The files I have on my computer are all there because the industry doesn't have Lightnin' Hopkins CD's in the stores, and you can't even buy an Ambrose Thibedeau CD anywhere. Don't tell me I am cheating Hutty Ledbetter out of his copyright when I download that. Lee Michaels? Leo Kotke? Forget it.

What should the recording industry do? Celebrate. Chill. Start producing higher quality CD cover art. Start providing well indexed databases with subscription user accounts so I can order my CD's on line, and get a download to RW disc, with sleeve cover art, in a single software package that uses my disk, and paper on my recorder, and printer. Dare I say it? Move into the twenty-first century.

Tris
----------------------
"You could park a car in the shadow of his ass." ~ Geena Davis, in Thelma and Louise ~

[even sven]

I've never really figured out what is so important about maintaining the status quo. The recording industry, by anyone's standards, is one big ball of sleaze that pisses off everyone- artists, consumers- everyone but the stockholders. As digital recording/mastering becomes easier and cheaper, and lanes of distribution get free-er and wider, the role of the industry is fading, the recording industry will hopefully go down even without file sharing.

With any luck, the record industry will be replaced by something that is more beneficial to artists and consumers. I don't see why we are rushing around modifying laws, ingnore anti-monopolistic regulations and taking massive governemental steps towards protecting an industry that serves nobody's needs. I say we stop these governement life support methods and let it die.

[Revtim]

All the functions the big music companies provide now are obsolete or will soon be obsolete.

1) Distribution: Clearly, P2P has been shown to be far superior than stamping out discs and selling them in stores.

2) Recording: The facilities provided by the music companies can also be replaced by cheaper PC technology. Small recording studios can soon be made with MUCH cheaper equipment and much lower costs.

3) Filtering: As in filtering out talentless music acts (than can't make money). Currently, they provide the useful service of keeping the musical choices down to a managable quantity. I think other filtering mechanisms will arise, probably the media.

Perhaps the question now is "how will the musicians make money?" CD sales, but from new music stores and kiosks that makes CD's cheaply from downloaded sources, and kick back a small portion to the artists. Also, from live performances, web ads on web pages that distribute their music, revenue from their music being used on TV, moves, video games, etc.

[DoctorJ]

(Warning: rambling.)

The music industry still controls its most important asset--the avenues by which people hear music in the first place. If file-sharing were 100% legal and all songs were readily and freely available, my bet is that the most popularly downloaded songs would closely mirror those most commonly played on the radio, VH-1, MTV (do they still play videos on occasion?), etc.

My guess is that the industry will take bigger steps into advertising. They'll still market Britney Spears like they always did, but the album will have a huge Pepsi logo on the front. You could download it from their web site, which will have a few Pepsi pop-ups. I think it's a matter of time before the world of commercial jingles and commercial radio merge completely, and we find things like Britney's Pepsi jingle being played as a single. (Record companies pretty much already pay radio stations to play their singles, elaborately working around payola. Why couldn't Pepsi do the same thing?)

Artists with more integrity/less marketing appeal will flee to smaller labels, depending on word-of-mouth to build popularity and on live shows for the bulk of their income--pretty much like now. I can't see someone like Lucinda Williams doing anything but benefitting from ubiquitous file-sharing.

Meanwhile, CD prices will absolutely have to drop. I know it isn't as easy as most people think it is ("It only costs a nickel to print a CD! Why can't they sell it to me for a dime?"), but I think getting the average sale price around $9-10 is both possible and necessary. Again, I expect that the labels will make up the difference through advertising; Britney's No, Seriously, I Was A Virgin Once will be available for $7.99, but will have a huge Pepsi logo incorporated into the cover art.

Dr. J

[Sterra]

Musicians could simply put up web sites saying "Give me money" with all their music downloadable. Or possibly a similar sell a music song for a dollar. Considering how little they get from cd sales it would probably be much easier for them to make money that way.

[Sam Stone]

Excellent comments, all. It's true that the music industry is a bit of a dinosaur, but it's a HUGE dinosaur. It's got tentacles into the radio business, movies, tv, distribution through thousands of stores, etc. There are billions of dollars at stake.

It's not going to go down without a fight, and given the number of politicians in its back pocket, the government is guaranteed to be a big part of that fight.

Record companies still performa valuable services to artists, too. Aside from producing and distributing their CD's (which I agree could be done today just as well or better by small independent labels or even basement studios), they also front money to artists to pay for concert tours, they arrange and promote the tours, they arrange for promotional appearances for artists on TV shows, they act as sales agents, selling the artists materials to companies for commercial jingles, to movies, etc.

But none of this needs a huge corporation any more. If this industry is allowed to evolve, I can see many of these roles taken over by small artist management firms and musical agents. Think about the way actors work with Hollywood today, as opposed to the old contract system. In the old contract system, an actor would become a contract employee of a large movie studio, which acted much like record companies do today. And the actors generally got screwed over in the process.

Now, actors work for themselves, and hire agents to manage all of their stuff. It's a better system all around.

So instead of an artist signing with a record label and agreeing to create X albums for them, artists could create a demo tape in their basement studio, send it to an agent, and the agent could shop it to independent production facilities for a percentage of royalties, and then with a distribution house for the CD. Or, the artist could try to forego professional production with his own studio, much like some actors produce their own movies to cut out the middle man.

Can you imagine the innovation that would occur under this system? Without being locked to a record company, artists would be far more free to experiment and take chances. With multiple distribution outlets available, artists could put smaller, experimental works out on MP3 at very low cost, and save their premium or mass market work for CD production. There would be innovation in packaging, distribution, marketing, you name it. It would be very healthy for the music consumer.

And the large labels could even survive and even prosper under such a system, just like the big movie studios survived even after they lost all their contract actors. Adapt, find a way to leverage your strengths, etc.

[Biggirl]

Why, why oh why won't record companies sell MP3s? If they think the MP3s will devalue current albums (I don't think they will, but the record companies seem to suffer from inherent paranioa) then they can sell their backlists.

An easily searchable database. A per download or subscription fee. I'd be in heaven if I could find The Impressions or Ruth Brown. The Flower Duet-- I'd pay to have that on my hard drive.


Music business insiders, you know how the industry works. Why can't this be done?

[Sam Stone]

It CAN be done. But the industry is convinced that putting its copywritten material out in an unprotected file format would be their death. That's why they are fighting for the new bill in Congress introduced by Fritz Hollings, which would require encryption devices in every digital device. Then the record companies could put their material out in encrypted form, and computers would not be able to make copies of it.

Of course, this is an insanely bad idea, and totally unworkable anyway. But that hasn't stopped them before...

Here's a little rant I wrote a while ago on this subject: http://happyfunpundit.blogspot.com/?/2002_02_24_happyfunpundit_archive.html#10282500

[pldennison]

Sam, I never made the connection between your old screen name and the postings at Happy Fun Pundit, although I should have. I read HFP along with Instapundit, LGF and Jane Galt just about every day. Nice work, there.

[Mr. Frink]

Well....I think that these music corporations are going to try to legislate themselves a death row reprieve. But, ultimately...technological progress will roll over them. They are obsolete & need to deal with that.

Lowering CD prices are a band-aid at most. Because CDs will be obsolete soon. Selling MP3 is a dead end when user will be able to download tracks for free on Peer-to-Peer networks. They can try copy-protection all they want. But techies will find a way around them in an instant.

The new reality will be that music will be freely available. Period. Deal with it. How will the corporations make mega-bucks in light of this? They won't. They will die off like the dinosaurs they are.

The artists themselves will have to adjust to this new reality. They will no longer make money from selling their music to consumers. But don't worry...there will still be ways for them to prosper. They can make money from live shows still. And there is no doubt in my mind that they will be find ways to provide things of value to their fans. Special "behind-the-scenes" web shows... Pay-per-view concerts, all kinds of merchandise, etc.

Perhaps they won't become instant millionaires like the pop stars of today....but that might be a good thing as far as music is concerned. This will filter out those manufactured bands, leaving only those who are more concerned with making music--not money.

It seems as though everyone is trying to impose the old business models on this new reality. Things change. It isn't the end of music. If radio were a new invention today, these same record companies would be in a panic over people "stealing" songs by being able to listen to them without buying them. Well, now people will have that same freedom to listen to the music of their choice without having to purchase it. Artists will have to adjust to giving their songs away for free. They'll have to look at it as a way of promoting their revenue-producing projects.

[WSLer]

One thing that all of you seem to be convieniently overlooking is the fact that ma good part of the music buying public doesn't have regular access to a computer where they can download music files, burn CD's etc. Plus, it costs a lot more to go thru the whole deal of buying a cvomputer etc, then it does to go out and buy a very good stereo system and a good number of CD's.

Oh, one more thing, CD's DO NOT cost a dime to make. If you include all of the packaging, they cost about a dollar. And try and keep in mind that of the $15-18 that you pay for the CD, it all gets spread around so that it pays the salaries for EVERYONE at the record company including the cleaning people, who, if the record companies went bankrupt, as y'all seem to be joyously wishing and hoping for, would be out on the street jobless.

Think about THAT as you download your latest music files.

[Sam Stone]

pldennison: Thanks! It's nice to hear that people like it. We have about 1000 unique visitors a day right now, so lots of people are reading it, but unlike message boards you can write stuff and never get any feedback as to whether or not it's any good. I'm glad that people I respect like you are enjoying it.

Mr. Frink: Well... Yes and no. You are thinking like a techie. For you, downloading MP3's is trivially easy. For most people it's not. The vast majority of computer users have never downloaded an MP3 in their lives. And for many people, the hassle involved in connecting to a P2P network, finding the songs they want, downloading them, and burning them onto CD is just too much hassle. If the price of CD's were lower, they'd happily just buy them and pay the premium.

Plus, Mp3 quality sucks. It really does. It's fine to listen to on your computer, or in your portable player while you're jogging, but try listening to them on a good home stereo - I have, and the difference between a 128kbps Mp3 and the CD original is startling. I even notice it in my car. I just bought a new Warren Zevon CD ("My Ride's here" - highly recommended), and I burned a copy of it to listen to in my car. The difference in quality between it and the original is quite noticeable.

Audio quality is one advantage CD's still have, and if the industry were smart they'd play that up and increase it by moving more content to DVD-A, which is even better and therefore much harder to download.

[rjung]

Originally posted by Sam Stone
Plus, Mp3 quality sucks. It really does. It's fine to listen to on your computer, or in your portable player while you're jogging, but try listening to them on a good home stereo - I have, and the difference between a 128kbps Mp3 and the CD original is startling.
Silly rabbit, nobody who cares about music fidelity rips tracks at 128 bps. :p Even a non-audiophile like me rips at 160 minimum; I imagine a true music junkie wouldn't be satisfied with anything less than 256.

And what the music industry should do is adapt; what they want to do, instead, is legislate. Silly, silly, silly...

[Rhum Runner]

Originally posted by Sam Stone
I'd lower the price of CD's to the point where it doesn't make sense for the average person to go to the hassle of burning one. I don't know what that price is, but I suspect that at $9.99 or $6.99, CD's would fly off the shelf.

SamI agree whith everyhting you have said in this thread, but in particular I think you are right on the price issue, and also with what you said about the quality issue. I have just about 0 intrest in MP3, becasue I find the quality too low to actually listen to on my stereo. I do, however, buy many CDs. I try to buy used because the price of the new stuff is too high. I would guess I spend $150-200/ month on CDs, but most of that is at used stores. I refuse to pay $15+ for a CD. However, if CDs were $6-7 new I would probably buy more from new CD stores because often I cannot find what I am looking for on the used market.

On the other hand, I also still buy alot of vinyl so maye I am just weird. :D

[Sam Stone]

rjung: The standard for internet distribution of MP3's is 128kbps. If you use a P2P application that shows bitrate, select a large bunch of MP3's and have a look at them. 95% of everything you'll find online is 128kbps.

Not only that, but most MP3's that you find online are burned by Teenagers who think that it's the height of coolness to crank the bass and treble up to the maximum before burning them. That, or they leave their sound card's 'effects' loop in place, so that the music has a lot of modifications. Most of it is really bad.

I used to download MP3's of albums that I already had in my collection, because it was easier to get them in that format by downloading them than it was to take my CD's and rip them myself. But I gave up when I found out how crappy most of them were. Now I have to rip my own CD's (and you're right - when I rip my own, I use a much higher bitrate. 128bps sounds like crap on a decent stereo).

[Sam Stone]

WSLer: Whoa. I don't see anyone here arguing in support of music piracy. I certainly don't support it. In fact, on the website I linked to above I just recommended a CD that you can find online if you want, but I explicitly told people to go out and buy it.

But you have to recognize that the music industry does not have clean hands in this regard. Even a libertarian-leaning person like me can disagree with that industry, because they don't fight fair. Specifically, they spend a lot of money and effort buying politicians and getting legislation passed that benefits them.

For example, a couple of years ago their lawyers slipped a midnight rider into a farm appropriations bill which deprived artists of their performance rights. It was done this way so that there would be no debate on the issue and lawyers representing artists wouldn't have a chance to mount a counter-offensive against the bill. That was sleazy, and it's typical of the way they operate.

Another example is the current bill in congress, which was sponsored by Fritz Hollings. If it passes, every electronic device that can store digital data will be required to have an encryption chip in it, and it will be illegal to decode digital data back to analog in any device other than the output device.

The new Celine Dion CD is copy-protected. This is not mentioned anywhere on the CD package. If you buy this CD and put it in your iMac, you're in trouble. Because the way they 'protected' the CD is to make it lock up any computer that tries to read it. On a PC, you can eject it. But on a Mac, I don't believe you can. I'm not sure what you'd do in that case, but the record company has already issued a disclaimer (likely invalid) saying that they assume no responsibility for damage.

Not only that, but these copy-protection schemes will deprive consumers of their fair-use rights under the law. You won't be able to burn a copy of your CD onto Mp3 to play in your walkman. You won't be able to play the CD on your computer. You won't be able to make an archival copy, or make a copy for your home jukebox (I have an MP3 jukebox for background music in the house, and all copy-protected CD's are now useless for that).

The list goes on. The entertainment industry has greased congress so well that they managed to pass a whole bunch of laws which are going to damage all of us, they've managed to get copyright extensions on older works (in violation of the spirit of copyright laws), etc.

[Sam Stone]

WSLer: Whoa. I don't see anyone here arguing in support of music piracy. I certainly don't support it. In fact, on the website I linked to above I just recommended a CD that you can find online if you want, but I explicitly told people to go out and buy it.

But you have to recognize that the music industry does not have clean hands in this regard. Even a libertarian-leaning person like me can disagree with that industry, because they don't fight fair. Specifically, they spend a lot of money and effort buying politicians and getting legislation passed that benefits them.

For example, a couple of years ago their lawyers slipped a midnight rider into a farm appropriations bill which deprived artists of their performance rights. It was done this way so that there would be no debate on the issue and lawyers representing artists wouldn't have a chance to mount a counter-offensive against the bill. That was sleazy, and it's typical of the way they operate.

Another example is the current bill in congress, which was sponsored by Fritz Hollings. If it passes, every electronic device that can store digital data will be required to have an encryption chip in it, and it will be illegal to decode digital data back to analog in any device other than the output device.

The new Celine Dion CD is copy-protected. This is not mentioned anywhere on the CD package. If you buy this CD and put it in your iMac, you're in trouble. Because the way they 'protected' the CD is to make it lock up any computer that tries to read it. On a PC, you can eject it. But on a Mac, I don't believe you can. I'm not sure what you'd do in that case, but the record company has already issued a disclaimer (likely invalid) saying that they assume no responsibility for damage.

Not only that, but these copy-protection schemes will deprive consumers of their fair-use rights under the law. You won't be able to burn a copy of your CD onto Mp3 to play in your walkman. You won't be able to play the CD on your computer. You won't be able to make an archival copy, or make a copy for your home jukebox (I have an MP3 jukebox for background music in the house, and all copy-protected CD's are now useless for that).

The list goes on. The entertainment industry has greased congress so well that they managed to pass a whole bunch of laws which are going to damage all of us, they've managed to get copyright extensions on older works (in violation of the spirit of copyright laws), etc.

[DoctorJ]

WSLer:
Oh, one more thing, CD's DO NOT cost a dime to make.
I'm not sure if you're responding to what I said above, but it was meant in jest; I've heard this argument far too many times around here. (I think it's pldennison who usually comes in and drops the science on that one.)

I don't, however, think the market will bear the current price of CDs for very long. If the record companies can't make an adequate profit if they lower the price, they'll just have to figure out how to make them cheaper.

Mr. Frink:
Lowering CD prices are a band-aid at most. Because CDs will be obsolete soon.
Define "soon". The idea of going to a store and buying music on a portable medium is firmly entrenched, and not just in the minds of the industry. When broadband 'net access becomes as common as the telephone, then maybe, but until then, people will want to buy cds.

Sam--the lousy quality of 128 bit MP3s is a bandwidth issue. Those in live music trading circles (Phish, Grateful Dead, etc.) have been trading in the .shn format for a while now, which is supposedly lossless from the original .wav. Unfortunately, those of us with dialup access are left out of the game if we'd like to get these files while we're young, so I don't know much about it. Oh, and if you're ripping a disc to write to a disc, don't rip to mp3--just rip them to wav, and write the CD from there. You shouldn't lose anything.

Dr. J

[robertliguori]

Well, I may as well reiterate: WE DON'T NEED TO RIP SONGS OFF CDs! Who has a microphone attached to their computer? Very good! Who can use this microphone to record songs as they are played on the radio? Who can put these songs onto the P2P of their choice? I knew you could do it!

[Rhum Runner]

Originally posted by robertliguori
Well, I may as well reiterate: WE DON'T NEED TO RIP SONGS OFF CDs! Who has a microphone attached to their computer? Very good! Who can use this microphone to record songs as they are played on the radio? Who can put these songs onto the P2P of their choice? I knew you could do it!
Well, with all the variety on radio these days there will be lots to choose from don't you think? :rolleyes:
I can just imagine how good that must sound too, tune in a compressed fm singal on a Bose wave radio, record it in mono with that great microphone that came free with your computer, then sample it at 128 bits and send it on its way. I hope that is not the future.

[Nobody]

I can't believe some of you, supporting file sharing! I mean, pop/rock star mansions and limos don't pay for themselves :(
I mean, think of all of the years we've been recording songs from tapes and CD's onto blank tapes. Its completely destroyed the music industry. Poor, poor multimillionaire pop/rock stars and music industry officials. :(

[rjung]

Originally posted by Sam Stone
The new Celine Dion CD is copy-protected. This is not mentioned anywhere on the CD package. If you buy this CD and put it in your iMac, you're in trouble. Because the way they 'protected' the CD is to make it lock up any computer that tries to read it. On a PC, you can eject it. But on a Mac, I don't believe you can.
Just a brief hijack -- for any Dopers caught in this situation, reset the Mac, and hold down the mouse button as you do so. That will force the Mac to eject whatever disc is in the drive.

There are other methods available, depending on the specific model and configuration, but this is the easiest approach.

[Triskadecamus]

In my experience, the American consumer generally likes to pay extraordinarily high prices for inferior crap. Look for CD prices to go up as soon as the current recession is officially over.

Tris
--------------------------
"You could park a car in the shadow of his ass." ~ Geena Davis, in Thelma and Louise ~

[Rhum Runner]

According to this (http://www.stereophile.com/shownews.cgi?1353) article, the major record companies may be planning to drop CD soon in favor of hybrid SACD, which has a much better copy protection scheme. Now that would be cool, if the price of the SACDs will drop to, or below, current normal CD costs....

[pldennison]

Re: The Celine Dion CD, and other Sony products that use the Key2Audio "copy-protection" scheme: you can also defeat it completely with a black magic marker (http://www.cnn.com/2002/TECH/industry/05/21/bc.media.cd.piracy.reut.reut/). Not that any Dopers own Celine Dion CDs.

As it happens, Key2Audio isn't as good as Sony thinks it is anyway. My copy of the Star Wars: Episode II soundtrack, which also uses the scheme and is supposed to prevent it from playing on any PC or Mac, plays just fine in my laptop using the RealOne player.

[GSV Consolation of Dreams]

Originally posted by Rhum Runner
According to this (http://www.stereophile.com/shownews.cgi?1353) article, the major record companies may be planning to drop CD soon in favor of hybrid SACD, which has a much better copy protection scheme. Now that would be cool, if the price of the SACDs will drop to, or below, current normal CD costs....

Heh heh, anyone want to start a pool on how long it will take someone to crack SACD's copy protection once it comes to market?

High encryption really isn't much of a barrier IMHO. If they introduce something that uses lots of encryption, then a P2P distributed computing app will appear on the scene to crack it.

Installing ecryption chips in new hardware really won't do the trick either. 'Grey' manufacturing plants and the huge amount of legacy h/ware floating around will make that rather useless. Everyone will want to use old computers all of a sudden.

Caveat: I don't know much about P2P, encryption or distributed computing except at the user level.

~atarian: Reader advisory. This message contains >0 spellling mistakes.

[Rhum Runner]

Originally posted by atarian


Heh heh, anyone want to start a pool on how long it will take someone to crack SACD's copy protection once it comes to market?

High encryption really isn't much of a barrier IMHO. If they introduce something that uses lots of encryption, then a P2P distributed computing app will appear on the scene to crack it.

Um, SACD is in the market right now and has been for almost two years. So far as I know no one has cracked it, but since it is, at least right now, mostly an audiophile thing I doubt many people are working on it. Also, most SACDs in the market are reissues of older recordings, so they are available on regular CDs as well.

That being said, as far as I know the SACD encryption will not survive a D-A-D conversion process, so I doubt it will have much practical impact on the P2P issue.

[GSV Consolation of Dreams]

Interesting. Thanks for the info Runner I guess that while we have the current CD protection level/no protected CDs, there is no incentive for people to crack SACD.

If and when it becomes more prevalent though, it will be cracked.

This quote from Heinlein gets bandied about on slashdot et al. a lot when these kinds of things are discussed but I think it's such a good quote, it deserves another airing:
There has grown up in the minds of certain groups in this country the notion that because a man or corporation has made a profit out of the public for a number of years, the government and courts are charged with the duty of guaranteeing such profit in the future, even in the face of changing circumstances and contrary to public interest. This strange doctrine is not supported by statute nor common law.
"Life Line," Expanded Universe, Ace, New York, 1980: 21. Originally published 1939.

[Gadarene]

Sam Stone:
It's true that the music industry is a bit of a dinosaur, but it's a HUGE dinosaur. It's got tentacles into the radio business, movies, tv, distribution through thousands of stores, etc.

I'm just trying to picture a huge dinosaur with tentacles.

(Seriously, though, I agree with everything Sam's said.)

[Sam Stone]

Huge Tentacled Dinosaur would also be a good name for a band.

[shelbo]

The "Music Industry" (RIAA or whatever) should do exactly what napster did, but do it better, and charge for it. I would pay a monthly fee, plus a reasonable charge per MP3, to have access to an immense liabrary of digital music.

Napster, at it peak, gave access to over 10 million files! Multiple files of stuff that was truly obscure were generally available. But there were definate problems - a particular file could be corrupted, or contain a virus. Most stuff was at 128kbs, or less. Many people had slooow connections, making it take forever to download a song. In the middle of a download, a person might turn off their computer and cut you off.

If the Music Industry could duplicate Napster, with high speed connections, a better search function, a choice of bit rate, and even more files available, they would have the "killer ap".

[musicguy]

As a working musician, I have to address a few points made. I don't intend to defend the record companies, only the artists.

If the record companies go away, the artist is presented with a few problems. First, how do they earn a living? Because if they cannot, they must do something else to survive. Trust me when I say that a full-time "straight" job does not allow an artist much time to excel at his craft. We all need to earn a living though. So what is left is touring and t-shirts basically.

Touring is very expensive and, usually at least, partially subsidized by the record companies. Without the sponsorship and promotional backing, an artist is going have huge cost increases. That will be passed to the consumer in the form of higher ticket prices. Is everyone who wants to download free music up for that?

Now, what if the artist is relatively unknown? Everyone is in the beginning. How is it that they develop a following that is going to have 50,000 people waiting in each town across the USA to see them. Is the internet expected to provide all the promotion necessary to ensure this? What about the other 20 million bands on the internet that are trying to simultaneously promote themselves? People who say this will cut down on the bad artists are mistaken. Since everyone is basically at the same starting point, everyone gives it a shot. Total saturation. Does everyone really want to weed through 5000 bad mp3s to find a diamond? Obviously, the current system isn't immune to this. There are plenty of undiscovered greats and plenty of awful acts that are signed. But a file-sharing only environment won't help to get the cream to the top as efficiently as some would like to think.

I'm not the record industry's biggest fan. I wish it had the integrity to treat artists fairly and save the contracts for people who have genuine talent. It is a business though, always has been. But they posess marketing and promotional power that your average artist just couldn't come close to by themselves. Without this, it would be rare if an artist were able to promote themselves so succesfully that they could support a tour and continue to release more CD's. It would still happen, just not nearly enough, IMHO.

I also must add that people need to realize when they download stuff that it does not always affect the artists in a positive way. And there are plenty of people that download music because of the simple fact that it is free. They have all the new releases and won't buy any of it. I know too many people with full 100gig drives and stacks of burned cd's that are not buying music. This problem has to be solved. I commend everyone that doesn't do this but many do. When someone posts something saying " I only download stuff that I will buy" or "I only download stuff that isn't available in an other way", or "I only download stuff that I already own", you are ok in my book and you are the minority from what I have seen.

As far as solutions...
Shelbo has the right idea. The record companies need to offer something that is betterthan what current P2P has to offer. If they can do that and people will be willing to pay for it, they may survive. That is the only way I see artists being able to make a living.

[Sam Stone]

MusicGuy: You certainly have some valid points, but there are reasonable answers to them. Let me take them one at a time:

If the record companies go away, the artist is presented with a few problems. First, how do they earn a living? Because if they cannot, they must do something else to survive. Trust me when I say that a full-time "straight" job does not allow an artist much time to excel at his craft. We all need to earn a living though. So what is left is touring and t-shirts basically.


Record companies are not the only path to income for musicians. Nor are we talking about the death of the record company. We're talking about a fundamental re-structuring of the industry.

For example, one of the problems as I see it is that record labels tend to sign acts for multi-record deals. Sometimes so many records that they essentially own the artist for a long period of time.

That used to be the model in many other types of entertainment and publishing. Movie actors would be 'contract' players and be locked to studio for a long period of time.

Such arrangements give the record company a lot of power to control the market. If they refuse to release an artist's works on MP3, then the entire MP3 industry will be left without access to that market. Couple that with the organization of record labels into consortiums like the RIAA, and you wind up with a near-monopoly on the marketplace of music. The result the same as with any other shortage - a black market appears. People want inexpensive music. People want Mp3's. If a monopoly prevents access to those things, they'll do it themselves.


Touring is very expensive and, usually at least, partially subsidized by the record companies. Without the sponsorship and promotional backing, an artist is going have huge cost increases. That will be passed to the consumer in the form of higher ticket prices. Is everyone who wants to download free music up for that?


Plus the cost of marketing, manufacture, and distribution. Sure, the record company provides a valid service. But other arrangements are possible. Musicians could have agents like other artists, and those agents can handle marketing and even up-front money for touring. Venture capital firms might underwrite a tour. A distribution company (the record label) might pay an advance for the album to cover tours. But the artist would be free to negotiate deals with web sites or other distributors to make their stuff available in other formats.


Now, what if the artist is relatively unknown? Everyone is in the beginning. How is it that they develop a following that is going to have 50,000 people waiting in each town across the USA to see them. Is the internet expected to provide all the promotion necessary to ensure this?


If there's a need, the market will fill it. How do we find out which books are worth reading? Most people never see an an advertisement for a book. But in the book industry, mechanisms have developed to transmit that information to the consumer. For example, book reviewers are much more widely listened to and respected than are music reviewers. The system will adapt.


What about the other 20 million bands on the internet that are trying to simultaneously promote themselves? People who say this will cut down on the bad artists are mistaken. Since everyone is basically at the same starting point, everyone gives it a shot. Total saturation. Does everyone really want to weed through 5000 bad mp3s to find a diamond?


Maybe I'll go to amazon.com and look at what the ten highest-rated new discs are, in the genre I'm interested in. Maybe new artists will start at the bottom on secondary MP3-only sales sites, and work their way up to the top tier like Amazon based on buzz and sales figures.

Here's a perfect example: http://www.iFilm.com. Anyone can make short films, get them on ifilm, have them move up the ranks, have them get linked on a lot of sites like this one so they generate lots of hits for the hosting company. This gets them more promotion. One film called '405' (http://www.405themovie.com) has been shown at premier film festivals and reviewed by Roger Ebert (favorably). It seems that people find the good stuff.


Obviously, the current system isn't immune to this. There are plenty of undiscovered greats and plenty of awful acts that are signed. But a file-sharing only environment won't help to get the cream to the top as efficiently as some would like to think.


I think the converse is a much bigger problem - great acts that can't find an audience because the record labels aren't interested. Where else do they have to turn? The record labels are powerful enough to actually control the direction and trends of music. It has the power to eliminate certain forms of expression. It has gone through conservative eras where many of their older acts were dropped, ignored, or only supported with cheap production and no promotion.

I'd much rather see a widespread, dynamic, grassroots music culture that has the tools to reach a wide audience when something great emerges.


I also must add that people need to realize when they download stuff that it does not always affect the artists in a positive way. And there are plenty of people that download music because of the simple fact that it is free. They have all the new releases and won't buy any of it. I know too many people with full 100gig drives and stacks of burned cd's that are not buying music. This problem has to be solved.


I agree. However, the record labels are not squeaky clean either. As I said earlier, they use government as a big hammer to get things the market won't offer them. That makes them coercive. By using copy protection, they are depriving consumers of their legal fair use rights. Their questionable accounting has ripped off countless artists, as have their successful attempts to strip away the legal rights of artists.

[the_great_dalmuti]

Interesting thread, and thanks to everyone who posted. There's some really good ideas and insight floating around here. I'd like to add my two cents.

I'm not sure where but I remember reading that high-profile bands on major labels only make about $1 for every CD they sell. In some cases, this could equate to quite a chink of change. But, really, is $250,000 (a cool million divided by four theoretical band members, minus some taxes . . .) even going to make a huge difference in these musicians lives? Granted, every little bit counts, but that money is merely an outfit or two, for some of these so-called "artists."

The real money comes from touring, endorsements, and merchandise. Some of these bands should get off of their buts and tour for 150 days a year, like many smaller, hard-working bands who don't get as much publicity. Need even more money? License a song to Pepsi! You've already sold your soul to RCA, why not spread it out a little bit?

Also, I would feel a much more sorry for these record companies, if some of them weren't the same exact companies who manufactured blank CD-Rs. Really, Sony, if you're going to throw a hissy fit about pirating, stop selling CDs labeled as "Perfect for Audio" or "80 minutes of music."

[the_great_dalmuti]

Thay should read "chunk of change." And, of course, "buts" should have another "t." Sorry, I'll preview before posting next time.

-Dalmuti

[China Guy]

For old timers you can remember that this same debate went on over cassette tapes. Sam Stone kinda mentions this. Cassettes were generally considered an inferior medium, but the oil shock back in what 1978 gave record companies an excuse to jack up record prices. Then a lot of us went out and bought cassette recorders because of the price differential.

I think prices will come down though. Flip side of the coin is that costs have probably come down as well. I mean, how much does it cost to burn a CD??? Distribution, recording costs, etc are all falling.

[Measure for Measure]

Given that file sharing is not going away what does the music industry do?

1) Persuade their hired guns in Washington to pass the Digital Millennium Copyright Act (DMCA) in 1998.

2) Use the preceding to put the screws on internet streaming broadcasters.

3) Traditionally, radio broadcasters had to pay 3% of their revenues to composers, but not to artists or to copyright holders (record companies). The thinking was that the latter benefited from the promotional value of radio play.

This is clearly unacceptable. Consistent with the DMCA, royalties should be split 50/50 between the recording artists and the labels. After all, the latter middlemen have more effective lobbyists.

4) Demand that webcasters pay 15% of all revenues to them.

5) When negotiations break down, arrange for the Copyright Arbitration Royalty Panel (CARP) to recommend a royalty rate 14¢ per song per listener for Internet-only webcasters ( .07¢ per song for commercial radio station simulcasts, and .02¢ per song for noncommercial radio simulcasts). c. 2/20/02. That will show 'em.

(That decision is currently under review.)

6) Make the royalties retroactive to 1998.

7) Advise your customers to avoid visiting http://saveinternetradio.org/ . Streaming internet radio is evil and should be allowed to die. Especially noncommercial internet radio. Do not, repeat, NOT contact your legislators, local press, etc.

8) Another link to avoid: http://www.ruf.rice.edu/~willr/cb/sos/

That's what the music industry does.

[Measure for Measure]

Musicguy: Without this, it would be rare if an artist were able to promote themselves so succesfully that they could support a tour and continue to release more CD's. It would still happen, just not nearly enough, IMHO.

Maybe. But maybe not. Northern California's Tres Pistolas has not been signed yet, but they are going on tour with funding by 8 coporate sponsors. (Small corporate sponsors as it happens, such as Dragonfly Shoes, Red Rum Liquor, Klik Wear, etc. They get to plaster their names on the tour bus, sort of like NASCAR.)

More generally, record companies may very well find themselves squeezed out of the music distribution business, as distribution costs continue to decline. At the same time, I strongly suspect that there will continue to be musicians, although they may find themselves associating more with agents, graphic designers and movie studios and less with record executives.

[even sven]

I'm a big fan of the local music model. I come from a town with a very cohesive and hard working local music scene (Sacramento).

There are a number of bands that have thrived on a local level for years, sometimes decades. Some of these people can live off of the music alone. Most of them have to have some kind of side job- usually related to the local music scene. Musicians own local studios, work at record stores, publish music magazines, own small record lables, run venues, design cover art and do photography for other bands.

It seems to be working pretty well. Even though they can't get radio airplay (Sacramento radio stations often refuse to play even Sacramento bands that have gone national, much less local local bands) and live in a city with a lot of apathy towards anything local (Sacramento has the biggest case of San Francisco envy you've ever seen), local music still thrives. There is a huge amount of creativity, and the local music scene is a vibrant, ever-changeing, self-sustaining community. This not only benefits muciscians and the art of creating music, but it benefits the whole city.

Sure, nobodies idea of being a rock star involves waking up in the morning to open the record store you own, or calling up businesses to get advertisers for the magazine you publish, Being involved in a local music scene is a hell of a lot of work. And chances are you won't get truely rich. But the advantage is a vitality, amount of artistic freedom, and a truely supportive community that the current system does not have.

This is what I would like to see replacing the record industry.