Why the Record Industry Doesn't Stand a Chance

Newhouse News Service ^ | Aug. 19, 2003 | JAMES LILEKS

[new cruelty]

Forget Napster. The newest place to steal -- sorry, "share" -- copyrighted materials is Earthstation 5. They claim 22 million downloads of their software, offer digital copies of movies still in the theaters, and boast that no one will be able to shut them down. They may have a point.

They're located in the Jenin refugee camp on the West Bank.

You can imagine the discussions in the Recording Industry Association of America's legal office: "You serve them with papers." "No, YOU serve them." (Pause) "OK, we'll send an intern."

Earthstation illustrates the problem the record industry faces: It's a big planet, it's wired together, and it's filled to the gunwales with pirates.

You've heard of Napster? So 2001. Now there's Kazaa. Now there's Grokster, whose corporate location in the West Indies just screams, "Come and get me, copper!" There's Blubster, another music-swapping program provided by a company in Spain. The day there are two servers in Greenland, the second will be devoted to letting 20-somethings in a Vilnius dorm room download Metallica songs.

The recording industry hasn't just lost control of its product; the product itself has lost its reason for being. The CD is as dead as the album, and for the same reason: Most bands have one or two good songs, a couple of so-so numbers and a half-dozen tracks of dreck you'll never hear again. We all know what CDs cost -- you can get a hundred blanks for a sawbuck. So why does the disc cost almost 20 bucks? Well, there's the cover art, the distribution, the advance to the artist, the cost of catering a five-week recording session for a band made up of ultra-vegans who eat only imported Irish loam, and of course the all-important $19.99 PROFIT.

You can't begrudge them a profit, of course. It would be nice if it trickled down to the average recording artist as well, but let's not be silly dreamers here. What really plagues the industry is an antiquated business model that requires putting out 10 tons of overpriced junk in the hopes that 3 ounces will make 11 tons of money.

But no one wants albums anymore. They want songs.

Unfortunately, they want them for free, and that's where the RIAA steps in -- with hobnailed boots. They've threatened file-sharers with huge fines for each download, meaning that kids with 30 gigs of "shared" music could face fines equal to the gross domestic product of sub-Saharan Africa.

The downloaders insist they have the moral high ground; they'll complain about the cost of the product, the unjust contracts musicians sign, the shoddy treatment the industry gave Blind Willie Simon in 1937, etc. They'll sniff that the musicians should give away the product and make their money touring, which is akin to saying restaurants should give away food and make their money selling souvenir forks. They'll craft shaky analogies to libraries -- as if the public library lets you take a book, make a perfect copy, and give it away to 4,982 people.

It's all a justification for the Internet's eternal problem: No one wants to pay for anything unless that something is nekkid women. And even then they'll complain about the price.

So what's the solution? Congressional hearings, of course. That'll fix everything! The creepily named Senate Government Affairs' Permanent Subcommittee on Investigations will soon hold hearings on the RIAA's dilemma.

But get this: The subcommittee's chairman thinks the RIAA is being "excessive." And he's a Republican -- Sen. Norm Coleman, a Minnesota solon who admits to having used Napster himself.

Coleman has a point; copyright laws permit fines up to $150K per tune. There's no sense in suing some kid eleventy million bucks for file-swapping songs. On the other hand, no one is going to stop stealing music unless he's scared of being arrested, sent to jail and forced to share a cell with a smelly old hippie who sings Mungo Jerry songs all night.

But there will never be enough arrests or convictions to stop the hard-core downloaders; there will never be a technological fix that someone won't find a way around. Copyright violations will cease when enough people decide they're morally wrong, when the old explanation -- "But Ma, even senators do it!" -- doesn't feel right. When the Internet is governed by reason, decency and conscience.

Never, in other words. See you in Jenin.

[Orangedog]

Take out step one and two and ask yourself how likely it is that step 3 will take place.

Markets change with technology. If the music industry would rather lawyer-up instead of changing their business model to keep up with the changes in the market, then they deserve to go under. Someone else will come along and make money in the ways they refuse to. Their grip on the entire distribution chain is vanishing and no small part of the reason is their practice of price fixing which they had to settle out of court. Part of the price they pay is the settlement, part of it is the damage they did to their own business model by illegally fixing prices. Thats the part that their lawyers want to pretend didn't happen.

[Orangedog]

If it's one word....why'd you say it twice? :>)

Some ideas are worth repeating :)

[Cooter]

Newsgroups are a leechers best friend.

[Richard Kimball]

Bump. Good article.

[xzins]

They're not Jim Bakker's commandments.

They're God's.

You'll have to settle it with Him.

[general_re]

Ah, bless those centralized distribution channels. If only we had a Ministry of Music, sorta like the Cubans, we'd have musical nirvana. Not that this is what you really meant, but the comparison was hard to pass up ;)

Anyway, it might just as easily make a wider variety of music available to us all. Once people realize that they no longer need to convince some A&R scumbag - when he's not busy snorting coke from a hooker's a**, that is ;) - that they're the next Britney or Justin or Eminem in order to make music for people, then they'll be able to bypass the A&R scumbag altogether, which is one less barrier between them and the public. Given that his job is not to filter out artists based on their talent or ability, but rather to filter them out based on what he sees as their profit-making potential, I'm having trouble seeing this as a real loss to the music-listening public.

Yeah, artists will lose the one thing record companies really do provide that's of value - marketing. Instead, they'll just have to sink or swim based on how their music is received, rather than based on whether or not the coke-snorting A&R guy decides that they're profitworthy enough to deserve a million-dollar ad budget.

[discostu]

Not only does gangsta rap die, but so does Toby Kieth. Basically without the centralized channels music will become regional, like micro-brews. Each area will have popular bands, some might manage to go national in a big way like Sam Adams but most won't be known more than a couple of states away from home. The good news of this is Clear Channel will die a miserable death. The bad news is there won't be song that define a time and a place for the nation like there has been the last 40 years.

Disco was just bastardized funk. Funk made a comeback for a while with Dr. John in resurgence and Red hot Chile Peppers (who basically do heavy metal funk) but seems to be down again. Punk is still holding together pretty well, it is the music of the X-Games circuit.

[Ronin]

Considering what passes for new music these days, that may not be a bad thing.

[George W. Bush]

my point is the commandment about theft.

But you're hanging out at FR.

No one is paying the writers of all these articles for their writings. Doesn't this break the theft commandment?

How often have you photocopied copyrighted materials? Handouts, music sheets, that just-one-more-copy-so-everyone-has-one? And I mean any copyrighted material whether you own it or not.

How just is it to charge everyone for a copying tax on every VCR tape or audio CD-R when a great many of them are used for data storage or backup (CD-R's) or for duplicating home movies or taping non-copyright programs (video tapes)? Hasn't the recording industry then stolen from us with their lobbyists when we are using those media for non-copyrighted material?

So, is FR going to force the children of news writers and opinion writers to go hungry? Will the writing industry disappear entirely because of FR? And I'll point out that many people who download games/music/video from online sources use it to try out the product and then go buy it if they like it.

At FR, I've never heard even one person claim they went and bought a newspaper or magazine just to get a real copy of an original article once they'd read it first here at FR.

Never.

So who are the bigger thieves? Us at FR or the Kazaa people?

[SauronOfMordor]

A song becomes known and a group gets known. It develops a following and a bankroll. Some concert promoter is willing to risk money to have them play in XUY town. Take out step one and two and ask yourself how likely it is that step 3 will take place.

You've got it backwards. What group gets NOTICED by the record company, without having already gone the route of playing locally and having developed a following? How else will the talent scout have heard of them?

Grokster & co lets 2nd-tier and 3rd-tier bands have access to a national/international distribution mechanism for their music. If they're any good, they will have fans e-mailing their music to all their friends in an exponential expansion. The ones that are good will then have loads of people wanting to come to their concerts

[dennisw]

I like your logic and wish doom on the RIAA. Nothing but a hierarchy of money grubbing lawyers who've never done an honest day's work.

[kansan]

I'm about to sound like a pitch man for the service. I think you're referring to Rhapsody, a service of listen.com.

I'm listening to it as I type. The service allows you to burn a song for $.99, or an album for $9.99, I believe. This is in addition to a subscription of $9.99 a month.

I mainly use it to listen to streaming audio for practically everything produced by any artist signed to a major label. This week, the entire Rolling Stones catalogue came on line. It's honestly the best ten bucks I spend every month. Get a good set of headphones, and plug into your sound card and stream with a clear conscience.

[NorthGA]

RIAA is actually going the opposite way of what the public wants. They want to move to a rental model for music, and eliminate ownership. They also want to keep music from being copied between devices owned by the same music buyer. They want to keep being paid for 8 track ->album -> CD conversions.

The Apple music store is not yet available (it's coming)to Wintel users. But I think most people just want easy access to music they want, are willing to pay a reasonable fee (.99 per song is not unreasonable), and want a permanent license for what they purchase. Too bad RIAA is fighting these reasonable ideas - it makes them easy to hate.

[xzins]

FR has taken their case to court and been upheld according to fair use of copywritten material....political discussion. And no one could say that it isn't political discussion.

Downloading music without payment is pure personal benefit and sheer avoidance of an obligation to pay.

[wideawake]

There was plenty (and better) music and a countless army of professional musicians before anyone ever invented recording equipment.

Musicians lived off concerts before and they will live off them again.

[kAcknor]

 "No, YOU serve them." (Pause) "OK, we'll send an intern."

kAcknor Sez:

Some funny stuff, but the funniest thing on that page was this:

 

 

"bISovbejbe'DI' tImer" (When in doubt, surprise them.)

Have you checked the *bang_list today?

[George W. Bush]

Not only does gangsta rap die, but so does Toby Kieth.

I only help people get the wares. I don't actually download them. I've never heard more than about ten seconds of rap (on TV) and don't know who Toby Keith is. So I don't know if Toby Keith disappearing is a good thing or a bad thing.

You should understand that I play only old-time hymns and Chopin at the piano. I almost never listen to music otherwise. I just have no desire and won't listen to music on the radio.

So I'm a recluse or a snob. Shoot me.

The good news of this is Clear Channel will die a miserable death. The bad news is there won't be song that define a time and a place for the nation like there has been the last 40 years.

I think these would both be very good news. But don't think the studios and ClearChannel (a consorium/monopoly of radio stations?) will die so easily. But their antics will become quite silly over the next few years. As though the RIAA wasn't over the top already...

[discostu]

That's not what I was indicating, don't twist my words. Centralized distribution that's not run by the government is a good thing, it's the basis for the franchise model, being able to go anywhere and know what you're going to get before you get there has benefits.

A wide variety of music IS available to us. Spend some quality time in a music store and really look around, there's an AMAZING quantity of stuff being published by a huge variety of artists. You're not going to hear it on top 40 stations, but that's a no brainer, their playlist is only 40 songs after all. Get away from the profit first section of music and see what's really going on out there. Pick a genre I bet at least 5 albums have come out this year that are getting good reactions from the listeners.

The marketing the record companies provide is what allows the music to be received in the first place. That's what gets the CD in the store, that's what gets the song on the radio, that's what pays for the website, that's what gets the tour started. Without that artists will have to use their own tools to do that, which will keep them pretty much local, real hard working bands can have a low end of national success. Basically everything will be like the non-main label bands have it right now, there's a lot of interesting stuff going on off the mains but that will become the top of the heap.

[George W. Bush]

I like your logic and wish doom on the RIAA.

Careful, dennis. I'm not used to having anyone agree with me...

; )

[xzins]

So that makes it ok to take their music without paying?