By \ July 14, 2010
In the interests of full disclosure, I have to say that the topic of “stealing” digital music — either by “file sharing” or simply copying MP3 files– has been one that I’ve been interested in for a long time. The following article is the text of a comment that I posted to TechCrunch tonight in response to an article entitled “RIAA Accounting: Why Even Major Label Musicians Rarely Make Money From Album Sales.” I post it here because it ended up being blog-posting length and I wanted to share it and because I thought (humbly) that it pretty much sums up what I’ve been thinking for a long time about the whole digital music/copyright/file sharing/etc. debate. Rather than just bellyache about how “evil” the record labels are (though there is some of that in my post, to be honest), I try to eventually suggest a new model that takes into account the realities of the digital age.
Here goes:
OK. I guess I can’t stop myself from commenting again because this subject really sticks in my craw.
Anyway…
The thing that I think is abso-freakin’-lutely hilarious is that the RIAA still wants to think that they’re living in a world where they can control the means of distribution. Yeah, sure…back in the day when music was distributed on plastic discs (either black ones or smaller shiny ones), the recording industry had a business model: they controlled the means of distribution by controlling the sale of these hunks of plastic. What they fail to realize now is that they never were selling hunks of plastic…they were selling the information on those hunks of plastic. As soon as another system came along that freed the information on those plastic discs (the music) from the medium they were distributed on, all their power went away.
This whole debate is a ridiculous attempt at maintaining a system that doesn’t– and can’t– exist anymore. No matter what kind of DRM gets overlaid on their product, no matter how many laws they pay off congresscritters to pass, the fact of the matter is that information wants to be free. And before anyone blows a gasket over the phrase that John Perry Barlow coined so long ago, know this: I’m not naive enough to think that “free” is “free” as in “free beer.” Nor is anyone who realizes the truth. When I (or others) say “free” we mean that it’s impossible to control information by technological or statutory means. Yeah, you can keep a lid on it for a while, but as so many Bittorrent sites prove, that’s just a temporary fix.
“But what about the artists?” It’s a lament that we hear from so many in the industry. What about the artists? It’s pretty clear from the references made in this article that the artists aren’t the ones who are really losing the money. Even going with the somewhat-more-than-generous graph at the beginning of the article, the “artists” are grossing barely more than half of the money. I’m not really sure about the math in those graphs, but the top one asserts that they’re making only 13 cents on every dollar. Either way it’s a bad deal.
But wait. If we read the comments posted by those who seem unsympathetic to the “musicians are getting screwed” model, the musicians should shut their yaps because they’re really making money not on the IP they’re creating and selling but on the tangible products of their music. They’re making money from the shows! They’re making money from the merch! Shouldn’t the bands just shut the hell up and stop whining?
Therein lies the problem with the whole argument being made by the recording industry.
Maybe the bands should stop whining. Maybe they should just be happy with 13% and make their money from stuff that can’t be downloaded off the Internet. But if that’s the case then the RIAA should quit the BS about how copying is “stealing from the artist.” OK. Maybe it is…a little bit. But who it’s really “stealing” from is the record label who takes the lion’s share of the moo-lah.
Problem is, I bet that not too many of us are all that sympathetic to the A&R folks. It’s one thing to feel badly because Tom Waits can’t put food (or booze) on his table…it’s another thing to feel badly that the record company who is backing him isn’t going to be able to pay for the limos, executive suites, and bonuses that their leeches…errr…executives…aren’t going to get if there’s no money flowing into the system. Boo-freakin-hoo, right?
Whatever. Going down that path gets us off of the main topic. The fact of the matter — and the thing the recording industry (and the entertainment industry in general) can’t get over– is this: there’s no going back.
Yup. No going back. Once information went digital and we had an Interweb to connect people together and allow worldwide distribution of that information, the business model that relied on controlling the means of distribution was dead. Stone cold dead. And it ain’t coming back. Really, think of it…can anyone imagine a reasonable scenario that would turn back the clock to where there wasn’t an Internet and information couldn’t be copied digitally?
I didn’t think so.
So what do they do? Well, for starters it’d help if they’d try to imagine a different business model that doesn’t involve controlling information that can’t be controlled. HERESY! Yeah. I know. But it’s reality, too. So what now?
If the industry finally comes to its senses it’ll realize that if they want to make money they’re going to have to concentrate on selling things that can’t be duplicated in the digital realm. Stuff like merchandise. Stuff like live performances. Stuff like killer packaging and added-value goodies that accompany the information-container (read “CD” or “DVD”) that they’re selling. It’s pretty obvious when you look at ticket sales at theaters for 3D movies and cinematic “experiences” that can’t be replicated at home (no….3D TV’s don’t count. Your home ain’t an IMAX theater no matter how much you spend) or live performances or even box sets that it’s possible to make money on things other than the music. Ask all those bands so many of the comments reference that are making money off their shows, off licensing, or off of sponsorships.
Perhaps the new business model that record labels need to embrace is this: they become the “filters” that point us to new talent and then promote that talent (using their music) to make money on the tangible stuff. In some ways it means that labels need to stop worrying about making money off the intellectual property of the artists that they sell and start figuring out how to promote them so that they can make money off of the other stuff. Record labels should start thinking of themselves as promoters and ad agencies…not purveyors of plastic discs.