SubscribeGreat News From The Music Industry
Posted in Television, Music, News on October 13th, 2007. By Eduard F. Vinyamata.
Since the Internet became mainstream about 10 years ago the music industry has been unwillingly ahead of all other media. The situation today is clearly polarized: On one side we have the record labels, fighting to maintain the status quo they held 10 years ago. On the other side we have music consumers, mostly pirates (according to the labels & the RIAA’s around the world). They are listening to more music than ever before, but not in the way copyright law originally intended. This week’s major stories show this polarization but also reflect a trend pointing to the side that will probably win this battle and decide how media should be understood and consumed.
A week ago the biggest story on media was a recording industry victory, from the AP story:
The recording industry won a key fight Thursday against illegal music downloading when a federal jury found a Minnesota woman shared copyrighted music online and levied $222,000 in damages against her.
Cathy Sherman, the RIAA’s President, must have celebrated this victory as “illegal downloads” where back in the News last week in the light her organization intended to: as a deterrent for future file sharers. Although she concedes: “…we’re in for a long haul in terms of establishing that music has value, that music is property, and that property has to be respected.”
Legal experts however quickly disagreed (via Digg) about how the verdict could affect the average U.S. consumer, not to say that this ruling means little beyond the United States.
Behind the recording industry we find artists, the true content producers. And it is them who made the rest of the headlines this week. Nine Inch Nails, a major music band, gladly announced that their contract with record labels was over and that from now on they would establish “a direct relationship with the audience as I see fit and appropriate”. Radiohead, yet another leading music band, made their album directly available for anyone to download, with no DRM attached. This is something many bands have done before. The novelty in this case is that the price of download is up to each individual downloader. The price range is unlimited from free, to whatever each person wants to pay. Music buyers are used to pay $20 per CD, yet artists usually receive about $1 per sale. This experiment could work out for Radiohead even if downloaders pay 1 tenth of what they would usually pay for a physical CD.
As Gizmodo puts it:
If two of the biggest acts in the industry can see the digital writing on the wall and totally embrace it—that the old way of doing business is broken—why can’t the labels? What Radiohead and NIN are showing is that the business model “of the future” feared by entrenched interests isn’t arriving some time in the horizon. It’s touching down now.
In fact, it’s not the first time we talk about the broken business model of the recording industry. Early this year we mentioned scarcity economics and the Long Tail. And just last week we highlighted a TechCrunch article “The Inevitable March of Recorded Music Towards Free” that later on would lead to a blogosphere wide discussion about the future of the industry and the fairness of the latest consumption trends. For example:
The counter-arguments I’ve seen don’t dispute the fall in price, but rather counter the fairness or un-sustainability of the business model. To that I say that “fairness” isn’t a business model. I’m also getting really tired of the starving artist meme. The industry makes all its money off of the big names that hit it big, but always points to artists that didn’t make it when they want to curry favor with the public. The fact is that most artists don’t make it in the current system, and still won’t in the new one. However, the new system will give artists a greater control over their destiny as they can run around labels and connect directly to consumers.
As we’ve seen, both independent and established, first rate artists are experimenting with distribution models beyond the recording industry and the RIAA. As decade old contracts come to an end and the trend sets in, more are expected to follow. Meanwhile record labels and the RIAA are still having a party because of their first court victory. Despite the bad publicity it has brought them. Despite how little it means worldwide. Despite the fact that content producers are happily escaping them. Despite social and economic changes aligned against them and their alarmingly aging copyright law. Despite all that, they celebrate. Thankfully enough, their party music won’t be too loud…or else.
The rest of the media industry should learn from what the music industry is going through. The TV and cinema industries came late to the game because of bandwidth limits (music files are much smaller than a video file), technology breakthroughs (the MP3 format became popular before Bittorent or Flash Video) and the way we like to consume media (until very recently it wasn’t easy to watch Internet Video on the living room screen). But all this has changed. If a situation where content producers become free agents seems far away for the TV and cinema world, read the following interview to George Lucas (via the great FSJ), who is considering doing just that. And what about Prom Queen?
In the end, it is a great time to be a content producer. Especially a newbie one, as industry changes bring opportunity to us. Either if our own industry conglomerates learn from their music peers or not, and it seems they won’t, in any case, we win.
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