Copyright, Music, My Stories, Piracy, Stupidity, Treating Fans Like Shit

Short Term

Thinking short term is hurting us. Every leader in charge thinks about the now and never about what’s around the bend. The majority of people in charge of corporations only care about the now. What is our bottom line looking like? There is no care about their environmental footprint or employee well-being.

Record labels are the same. They focus so much on first week sales and charts as they believe it brings in an instant payday, without understanding that the payday they are really earning is from music created 30 plus years ago and it just percolated, slowly rising to the top.

Have you heard of the record labels starting to employ artists as employees and offer them retirement plans? 

Of course not. That’s long term thinking. 

So Disney is pulling its catalogue of movies from Netflix in 2019. As a Netflix user, I say who cares. I never started subscribing to Netflix because they had Disney movies. I started subscribing because I wanted Netflix Originals. And with the addition of a comic book company with a cult like following, Netflix is looking at creating its own shared universe. It’s positive and long term thinking.

How often do we hear that people have no reason to pirate from the movie studios and record labels, as their catalogues are available online legally?

Amnesia seems to be the order of the day for the labels and studios because the online legal alternatives are fragmented. And as long as fragmentation exists, the pirate sites will be numero uno for content consumption. Same deal for music that’s available on Tidal or Apple and not on Spotify and vice versa. It’s ridiculous. So are consumers meant to have three streaming subscriptions for music and another ten streaming subscriptions for movies/TV. I don’t think so.

Consumers don’t want to have a dozen or so subscriptions. Just look at the cable TV industry. Too many subscriptions are expensive and not manageable, especially when these streaming sites are competing with illegal streaming sites who offer everything on the same site. Illegal streaming sites also show the content industries what kind of supply consumers want. At the moment, the content industries are focusing on the payday right now which means limiting the supply instead of the payday in the long term which means to open the supply and get more people to subscribe.

So what would Spotify do if Universal, Sony and Warner pulled their music from the service and started up their own service like Disney?

I don’t think it will happen. The revenues the three majors are getting from streaming licensing deals and royalty payments is insane. They would be crazy to leave Spotify. But if they do, Spotify is in trouble as it has no original content.

Have you seen the revenue numbers from Warner Bros lately?

Streaming grew by almost 60% from $227 million to $360 million. Downloads bring in $88 million, down from $121 million. Forget about vinyl, CD’s and cassettes. They are niche items that collectors would buy, however they will not sustain the business.

Overall income from recorded music grew by 13% to $770 million and it happened on the backs of listening instead of selling. Consumption in the 2000’s is all about access.

So if Spotify doesn’t pay, how did Warner accumulate $360 million dollars in streaming fees? All of those artists who sold their rights to corporations are losing out big time. The corporations who hold the rights are making a lot on streaming. 

The rich are getting richer. Meanwhile, we have clueless sites reporting how legacy artists need to hit the road to keep an income as they have no monies coming in from streaming. Well, these legacy artists need to get with the times. Get their fans to stream instead of buy and the corporation that has your rights will get paid royalties. And if you have a good deal with the corporation that holds your rights, you will get paid as well. If you don’t have a good deal, you will get squat. The game is rigged in the record labels and publishers favour. They are making a tonne.

It wasn’t supposed to be this way. The internet was supposed to level the playing field, give us all a chance. Instead we have monoliths who control 70% of the marketplace. And the powerful always abuse their position. Look no further than the scandals.

In Australia, we have our largest bank, Commonwealth Bank of Australia, involved in money-laundering. The deputy commissioner of the Australian Tax Office was covering up the multi-million tax fraud of his children. Politicians are resigning because they developed amnesia and forgot they are dual nationals, which is a breach of the Constitution. And still no word if they get to keep the money they fraudulently earned or they need to pay it back. All short term thinking.

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Copyright, Music, My Stories, Piracy, Stupidity, Treating Fans Like Shit

The Age Old Problem Of Music

The recorded music industry has finally stabilised and it is competing with free. Whatever arguments are put forward for recorded music to go behind paywalls, the world we live in demands that music be free. Piracy of music is no more.

Why would people bother?

My kids are happy with free and putting up with a few commercials. I am happy with it as well, and on the occasions that some of my favourite artists release an album that has a super deluxe edition, I purchase it.

All of this low price points does lead to a mathematical outcome. Profits are tighter, which in turn means  large recording budgets go down. Who cares, right? With pro-studio equipment so cheap, 95% of musicians are DIY’ers’

But, are profits really tighter for the record labels. The whole Spotify/Sony contract highlights just how much money Sony is getting from being the holders of so many copyrights. Sony’s negotiating power is strong because of the artists that create musical works.

Unions have negotiating power because they have the workers behind them. Sony has negotiating power because they have accumulated the copyrights from artists that signed contracts with terms stacked against them. The unions fight for workers’ rights and better wages. Sony fights for a higher fee to their music catalogue and then fails to pass on the monies to its artists, both old and new.

The power of the labels has been accumulated by paying low dollars for a song. Take “Louie, Louie”. The song was written on toilet paper in 1955, recorded in 1957 as a B side and it did nothing. In 1959, Berry sold the rights to the song for $750. In 1963, the song became a hit. By 1987, Berry was living on welfare at his mother’s house. However, Berry did have some luck in a lawyer friend who managed to get his rights back just in time for the song to be licensed to an alcoholic drink commercial. Berry in this instance is part of the rare 1% that do have some luck. For the other 99%, no dice.

You know what the funny thing is, someone like Frank Zappa back in the early Eighties had the foresight to offer a proposal to the record labels to replace the LP model. Zappa proposed that the labels should store their recorded music vaults in a central location and offer the music via phone or cable TV straight to the user stereos via a subscription model. In Zappa’s words “providing material in such quantity at a reduced cost could actually diminish the desire to duplicate and store it, since it will be available any time day or night.”

The reason why Zappa was thinking outside the square back in 1982 was that the recording business was already in a state of bother, that the Internet and Napster brought to the forefront, 20 years later.

Change is constant. News used to be slow, we had three TV channels, music, books and films had gated/window releases, fewer people travelled and fewer people finished school. Not anymore.

You see, change for one side of the debate is always better and for the other side not so much. For the music consumer, the shift to access models over ownership models with lower price points is for the better. But it is far from perfect for the record labels and other gatekeepers. Even old school artists don’t like these changes. People have argued that it has led to unemployment or that creators have no incentive to create new music.

The age-old problem of music was always access. How do people hear it?

MTV broke down a lot of those access problems and made musicians into global superstars. MTV, P2P downloading and streaming are new approaches to age-old problems. While the record labels ignored the volcanic ash of Napster, the techies escaped the volcano blast and thrived.

The error of the record labels was in believing that what was familiar would not change. They got used to the high profit margins of the CD, so they found it hard to believe that in the space of a few years, those profits could disappear. Those marketing strategies and gated releases that have proven themselves over so many years, no longer bring in the sales the labels wanted. Instead it leads to an increase in P2P downloading.

Streaming has competed with P2P. Spotify has pumped millions upon millions into the recording industry. Money that was not there before. So what do the record labels, along with Apple and other misguided artists supporting Pono or Tidal want to do. Their solution to the age-old problem of access is to put it behind a pay wall.

Nice one. Let’s see how well that goes down.

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A to Z of Making It, Copyright, Music, My Stories, Piracy

Trying Something New and Creative To Engage With Fans

This whole buying shares in a song has been going around for decades, especially in the heyday of record label monopolies. The basic premise at that time was that people would buy shares in a song and then any earnings the song makes goes back to the shareholders.

Fast forward to today and Testament is offering up a chance for the fans to purchase shares in the song “Native Blood”. If they sell every single offering they will have raised $57,000 in capital.

However, while the offering is promoted like a Company IPO Share Offer, it is nothing of the sort. It’s all smoke and mirrors. The fans of the band are buying memorabilia. The band is using the connection that a fan might have with the song as its selling point. Being a shareholder on the “Native Blood” song will not entitle you to any royalty payments (provided that a thrash band with a cult status who make their money from touring would get any) however it will give you a chance to buy limited edition merchandise later on.

An artist music and career is a brand and brands aren’t built in a day. Testament has been at for a while. In the beginning they had some growth initially however that didn’t mean that they made it. Music is a competitive industry and consumers are becoming harder to reach. Every business brand is faced with the same problem. Bands and artist are no different to small businesses.

The difference is if the artist is NOT prepared to find creative ways to reach their fans than complacency will bring about the end. So Testament is trying new creative ways to engage with fans, but it’s still based on the one way model of selling something. But by always going back to the old product selling paradigm is precisely the way to go out of business today.

Markets are always changing and fans of music are always changing. What we value as important is changing and what we want to own is changing. I grew up with the focus to have a house and a car. My kids are growing up with the focus to have the latest tech and live at home.

The fans of music spoke out loud with Napster 15 years ago.

WE WANT ACCESS TO MUSIC.

And what does the recording industry and bands do? They fail to keep pace with the changing demands, values and needs of their fans. They chose to hang onto the past and in 2014 they are left wondering where their fans and profits went.

If we want more proof about the sales model for music slowly fading, look no further than all the MP3 stores that are either being killed off or reporting losses. In Australia, BigPond music was operated by our largest ISP, Telstra and they have now shut it down, focusing on MOG, their streaming service which is trying to compete against Spotify. They get it, consumer behaviour is changing, and Spotify has led the way in providing a service that responds to this shift and has had much success doing so to date.

For bands and artists to prosper they need to do things differently. They need to be genuine and willing to connect with their fans. The fans in the end want transparency, not smoke and mirrors. James Hetfield might cringe at the “Some Kind Of Monster” documentary, however that visual and transparent footage of a massive act breaking apart was touching and moving. Hell, there are people at Metallica shows today that have never purchased a Metallica album.

The value of the recorded music product is not the value that it once was. What is valuable is the service and the partnership. That is why we are living in the era of sharing and access. Sharing provided the service that the fans of music wanted. Which was access all along.

And when will artists learn that partnerships are absolutely key to ensure sustainable growth. If small businesses do it, why can’t artists do it. But everybody lives by selling something. So even though I don’t agree with Testament’s song share plan offer and the lack of transparency around it, they are trying something different which for a metal band that goes back into the era of Eighties is good to see.

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