When The Music Labels Die, Piracy Will Continue… Then What?

August 16th, 2008

Reading about the possible death of Pandora has my wheels turning a bit - not specifically about Internet radio, but more the inevitable ire people have toward the music labels. It seems there’s a general, and understandable consensus that the music labels are antiquated businesses that are soon to go under, and the music world will be a better place once this happens.

The problem is, piracy is a given, and it will still continue.

I find many people use the music labels as a justification for piracy - they’re unfair to artists, they sue their customers, they insist on shackling music with DRM. Yeah, they suck, but I have a bad feeling that even if the record companies go under, the artists will have a hard time making money because piracy won’t go away.

Instead of labels, we’ll deal with artists directly, who will want to be paid for their work. And I think we’ll have a situation where consumers will assume other consumers will pony up some cash, and the end result will be like the Radiohead situation for In Rainbows where 62% paid zero. 17% paid 1 cent to $4 and the minority paid $8 to $20. And this is freaking Radiohead we’re talking about. A less famous band can expect even worse results. Making money won’t work because piracy still exists as an option.

So then we get into the situation where content is devalued and the content producer is told to make money “some other way” - and all the usual, silly business models come into play - advertising, sponsorships, the “personal brand,” to which I say - no thanks; I don’t want the free (or highly subsidized) Coldplay album laden with IKEA coupons and two tracks interspersed with Honda ads.

I’m just saying, it’s easy to make the recording industry the scapegoat. But when they go away, are we, the listeners, going to pick up the slack and pay the artists what they deserve? Or will we just continue pirating, except this time, the artists directly will be the ones suffering?

I cynically think the finger-pointing toward the music labels is just a front for cheapskates. I’d love to pay nothing for music. But I pay for a lot of tunes via iTunes out of principle - even though it would be way easier and simpler to just pirate the stuff - as a conscious choice on my part to pay for something I find worthwhile. I mean - we’re talking about $5 - $10 tops for an album here - less than a lunch plus tip these days.

Basically, hating the music labels is a convenient justification for piracy. It will be interesting to see what happens when it’s is taken away. I’d prefer people to cut the bull about evil labels and wanting to support artists and admit: we pirate because we’re cheapskates. At least then, the artists will know where we really stand and can start working on alternative business models.

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Viewing 4 Comments

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    • v
    I use this band as an example for damn near everything, might as well use it as an example again.

    Gov't Mule does it right. The have a rabidly loyal following, they tour almost non-stop, and they have never (to my knowledge) played the same show/setlist twice. They allow audience members to tape the shows, and the recordings can be freely traded/distributed, even online (see bt.etree.org). The soundboard recordings of every show are available to purchase in FLAC and MP3. They constantly offer fans discounts and freebies (pre-order a DVD and get free downloads, free extra CDs etc). They even offer college students "free surprise packs" by showing ID at the merch stand. And they *always* keep the ticket prices affordable.

    They're not getting wealthy, but they're certainly not going broke either. They sell a ton of merch at every show, and most fans buy every show (digital download) they attend - and then some. Even on the not-official mailing list, if you even hint at trading a soundboard (the ones you can buy) - you get flamed to death.

    What I'm getting at is that by treating your fans with respect, those fans in turn will support you with their wallets.

    Something else to consider - are musicians somehow entitled to be wealthy? Madonna signed a $120 million, ten year contract with Live Nation. Yes, she's hugely popular, and no doubt she works very, very hard. But at the end of the day, she sings for a living. There are a LOT of janitors, garbage men/women, dishwashers etc who also work very, very hard. And they don't make even a tiny fraction of what she does. But because she can sing, she gets to earn $12m a year? Same with athletes. No doubt it takes skill to consistently be able to throw a ball into a hoop, but it also takes skill to be a good carpenter.

    I've yet to see conclusive (and trustworthy) statistics showing that piracy hurts sales. I'll admit to downloading music illegally, but the massive majority of the time it was stuff I wouldn't have bought in the first place. And I've seen it used as an "excuse" for piracy before, but in my case, I have absolutely discovered new bands by having a friend send me an mp3. Then I end out buying the album(s), going to a concert (or 10) and/or buying tee-shirts, tour posters etc.

    Finally (has anyone really made it this far?) - remember when cassettes were the norm, and then CDs came out? Even back then, it cost more to produce a cassette than it did a CD. Yet CDs were significantly more expensive, because the "quality was better". Record labels have always been backwards thinking.
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    • v
    lots of good points. Yeah I have heard of other artists who are having
    a go without labels, Michael Penn, Aimee Mann, Jane Siberry are some
    that I follow. But I'm wondering about the base human psychology here
    - if something is offered for free, it seems the vast majority of
    listeners just take it. Also, when something is offered for free, even
    if money is suggested, it devalues the item. Then there's the
    perceived anonymity of the internet. Hence that's the reason for the
    concerts and merchandise angle as well - doesn't seem like any artist
    will make it on recordings alone.

    As for artists being entitled to wealth - surely the madonnas are the
    exceptions to the rule - most musicians fail to earn a living, even
    after getting signed to a label. As such it's true that the ones who
    complain most about piracy are those that are the most
    disproportionately paid. But I wonder about all the other artists who
    aren't as popular yet? For some reason I see that "holy grail" most
    new bands have, of being "signed to a label" vanishing - whatever
    they're doing now is the future.

    Or maybe new, friendly labels will appear in place of the old - one
    that doesn't sue artists and tries some alternate business models. How
    about giving away mp3s and selling high bit rate ones. Another thought
    I've always had is put more "stuff" on the CD like videos, extras, or
    heck, a discount on a concert ticket.

    But at the end of this pondering, perhaps I'm too focused on the
    recorded media as the end product, and am not interested in the other
    stuff musicians will have to increasingly do to make ends meet. Likely
    because I haven't been to a concert or bought a T-shirt in quite some
    time.
    • ^
    • v
    Lawrence Lessig says that piracy is the other side of the coin to the recording industry's unfair tactics...I tend to agree. It's quite clear who started things, though, as you outlined.

    Ideally, both sides would disappear, leaving a fair and balanced playing field for both artists and listeners. I don't think that's going to happen, though, and the music companies will go away long before piracy ever does.

    Things would need to change drastically for things to be salvaged as they exist now. Music needs to go way down in price - the 99 cent fee is based on the CD manufacturing process, which as Ross points out, is already inflated. Without physical cases, inserts, and discs, and with the less than CD quality of an AAC file, iTunes Store music should come out cheaper, if anything.

    The RIAA needs to stop suing people. It might already be too late for them, they've done so much damage I don't think anyone's going to give them another chance (and why should they?).

    There also needs to be less space between an artist and their listeners. Artists need to know their listeners are real people, and that suing a few of them directly effects the rest. Listeners need to know the money they pay for music is going to the artist, not some fatcat at Universal Music who calls fans like them thieves, or for lawsuits against 13-year old girls and grandmothers.

    This is an opportunity for innovation in this area, and the longer the record companies hold on, the longer it's going to take.
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    • v
    I'll admit I'm a cheapskate.

    The DRM issue is the other big problem imho. I've had to stop buying from Apple due to the DRM limitations. I'm using Amazon sometimes, but still hitting the "alternative" methods of music procurement too.

    DRM is kinda like icing on the cake for the issue. If all things were equal I *might* go the legit route, but once you add the DRM hurdle into the mix, it almost seems like a no-brainer to skip the legit route entirely. Kinda sad huh?
 

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