February 27, 2002

Rock

Ken Layne's Foxblog column yesterday was a great piece about the out-of-touch music biz-- it's densely packed with terrific links, and I urge everyone who hasn't already done so to read it and follow all the links as you go. (I'm usually pretty lazy about this, but I did it this time because I'm so interested in the subject, and in this case it really pays off.)

"The industry" is out of touch, perhaps as never before, but at least as much as it has ever been; the Grammys are a pointless irrelevant waste of time, perhaps more than ever, but certainly as much as they have ever been; and mistreatment of the fans and "the suppliers" (i.e. musicians) by record companies has been rampant. If the industry suffers from "lost revenue" owing to illegal digital trading of songs, the head honchos have only themselves to blame. All attempts to prevent this trading from occurring will fail, and the only thing "the industry" accomplishes by refusing to acknowledge this is to make itself look even more foolish and further alienate its dwindling base of customers. As Ken says, "few will weep when the Record Industry collapses."

I agree with all of this. However, it's not going to collapse. It will, on the contrary, out of necessity re-orient itself and adjust to the changed market, acknowledging that unauthorized copying and distribution is just a part of the cost of doing business (as I assume the computer software industry does.) People are going to go on copying mp3s no matter what, and the industry will eventually figure out a way to remain profitable in the midst of this reality. I don't know exactly how they'll do this, but I'm pretty sure that, contrary to the assumptions of almost everyone who writes about this subject, it won't be to the benefit of the musicians, neither the great nor the humble. As for whether it will ultimately benefit "fans," I have my doubts about that too.

The "free music" that seems to get so many people so excited is a fallacy. Nothing is free. While it's true that the music industry is bloated, wasteful, and certainly could do with some slimming down, it's also true that producing, promoting and distributing records does cost money. Even if costs were cut considerably, a virtually free product would mean that the money to do this would have to come from somewhere besides sales, right? My best guess as to where it would come from is from advertising, sponsorship, that sort of thing. As anyone who ever listens to commercial radio knows, the kind of programming that maximizes advertisers' profits isn't always the best or most interesting kind of programming. Britney Spears (with or without naked pictures), Limp Bizkit, Madonna-- they'd have no problem getting Reebok or Pepsi to fund their big budget albums. The artists who are less appealing as product spokesmodels will be a tougher sell and have a tougher time. And my guess is that the industry will close ranks, pour their resources into the sure things, take even fewer chances than they do now, and let the rest wither away.

"Cutting out the middle man" is a phrase you often hear in these discussions. Yet in a sense, this isn't "cutting out the middle man" but rather adding more middle men (advertisers) to the A&R and development process. Other possible ways to "offset production costs" could be to devise mandatory publishing deals that funnel a greater share of the songwriter's mechanical royalties to the label; or perhaps for the label to swallow a greater portion of the broadcast royalties. There are all sorts of possibilities, as well as a certainty: if the label can figure out a way to screw the artist, they will. A further certainty: they will figure out how.

I'd love to see the industry "shaken up." Maybe it would even be a good thing to get it all out in the open; something like this narrowing process has been occurring gradually for years anyway. (I listen to music all the time, yet like a lot of people I pretty much ignore what the mainstream industry offers. Not on purpose: I'm just not all that interested in being bored.) If artists enter into disadvantageous agreements, they have only themselves to blame. They should strike out on their own instead. But ultimately the economic logic applies to the non-mainstream, too. My small independent low-budget rock band usually spends around $15,000 to record an album. Since we're pretty sure we can sell at least 10-15,000 records, our small independent label can afford to give us an advance to cover this cost. We could reduce the recording budget by cutting corners, but we can't reduce it to zero. Obviously, Reebok isn't going to come to our rescue if such recordings lose their market value and become mere promotional items that can't pay for themselves. Ken's willingness to drive to Bakersfield to buy a CD from Buck Owens rather than buy one at a store or download it is touching. But it's not $15,000 worth of touching. And Buck has already recorded those songs. What about the Buck Owenses of the future?

Things haven't progressed to the point where recordings are valueless, promotional items, of course. Maybe we'll never get there. For most independent bands, digital trading is more beneficial than harmful, since people still do buy CDs. It can be like a kind of advertising. That model only works, however, if there's some product to sell. The commercial can't be identical to the product.

Finally, no matter how evil the Record Industry is, taking someone's copyrighted material without authorization is stealing, and stealing is wrong. The fact that technology makes it easier than ever to do this, or that the behavior of big companies makes people feel better about doing it, doesn't change that. Even if some enterprising "content provider" figures out a way to turn it to his advantage, that still doesn't alter the ethics of the situation. It's still wrong if it has no market effect whatsoever, as it probably does in many cases.

Of course, ethics don't matter. In the "real world" nothing is true and everything is permitted. I'm not saying that anybody could or should try to stop the inevitable process. All I'm saying is that while this process may be inevitable, it's not an unequivocal blessing. Under the "free music" ethos, a lot of great recordings, being swapped over DSL connections even now, never would have been made in the first place.

Anyway, read Ken's column, as well as the letters from readers that he has posted. Lots of food for thought there. And, if you do end up watching the Grammys: you have my deepest sympathies.

Posted by Dr. Frank at February 27, 2002 05:54 PM | TrackBack