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.