Music Business Future In Flux

[crawdad]

I read an article today that put new perspective on the future of the music business, which I think is a valid subject to discuss here. I'm gonna be general for now and just bring up some points which we should all think about and talk about.

First of all, record companies are running scared right now due to the popularity of Gnutella sites such as Limewire and Morpheus. Like it or not, the common public sentiment is that its not so bad to download songs for free. Many think that CD prices are ridiculous. So, you want a song, just download. Its simple. Since the record companies don't even offer such a service, the product they have sold is being pirated. Its cutting deep into their bottom lines.

There has been talk about copy protected CD's, but thats a joke. If I wanted to, I could copy a CD analog and then make MP3's of it. Bye bye copy protection. So forget that.

In the meantime, if you are an act or a songwriter, you are losing lots of money from piracy. LOTS of money.

Well, if that isn't bad enough, the RIAA is also waging war on internet radio, demanding that they pay royalties for what they play. Pay to play. Unfortunately, this current bill is attacking even stations that play all independent music. Most independent artists are willing to forgo the royalties in exchange for exposure. RIAA is trying to squash that. A record label conspiracy in the works? I don't know.

The point is that piracy is rampant and avenues for independents are being supressed in legal channels. Sooner or later, something has to give. Will the majors go under? What will take their place? How can any replacement system make any money if piracy continues--which it will.

At some point, this whole trend will affect everybody--studios, engineers, musicans, songwriters, record companies and radio. Which reminds me, XM sattelite radio is the coming thing, which will very likely kill local radio dead in a few short years. Its starting to look to me like technology is going to undermine music of all types--and maybe bring about an extreme situation where there is no such thing as a music career. Perhaps that is a drastic assessment and maybe something will fall into place that serves both the public and the artists in a fair way. What will that be?

I think we should talk about this stuff, both pro and con. The future is gonna be very different. I just want to see great music being made and able to be sold so that we can all make a living at it. Thats my general first offering just to get the subject up and going. What do you all think?

 

[crawdad]

This is a link to one article I read. Don't know how long it will be up but here it is:

http://www.comcast.net/smedia/abcne...news_business_085038_3512196449964045467.html

 

[crawdad]

Also, please check out this site for the internet radio angle:

http://www.saveinternetradio.com/

I am NOT affiliated with this group, but I feel like this is important to for us all to read--all us NowhereRadio users, take note.

 

[Robert D]

Hey Crawdad, good subject. You know, it's funny, I have friends that are aspiring musicians...who download free music by the tons and never buy a CD. Bit of a disconnect there, isn't it? Who do they think is gonna buy the CD they hope to make? Personally, I think MP3, clever as it is, falls well short of the quality I expect for my ears. So, I pay for the better quality, and sleep better for it.
But, the defenders of free music are dead wrong when they say "if people like the songs they download, they'll buy the CD" Dead Wrong! I'm not entering into moral judgements here. Look at the demographics involved. The vast majority of music consumers are young, and they are in a cultural environment where it's not so much a moral decision as an act of defiance against the corporate suits, and authority in general. They simply don't realize that, in a more realistic version of trickle down economics, it's the artists who get screwed the most by their actions.
So, where does it go from here? Big question. In a way, it would be great if an evolutionary process happened, in which the music business as we know it collapsed under it's own weight, leaving hungry consumers and independent artists and labels to connect in a manner which takes out the 99% middleman. A lot of people would get hurt in the process, but we'd end up with a great deal more music to choose from, at a much better price, with the artist not ending up broke after selling a hundred thousand CD's.
What we can't do is stay where we are. Either people have to pay up so that the artists can get paid, or we need to go completely the other way, and put the beast out of it's misery so that evolution can occur.
RD

 

[crawdad]

Robert--those are some great points. Yes, why should any fledging band think that people will buy their CD when it will be downloadable for free? And why should any company sell a CD for $17?

If the record companies put their catalogs on line, they could sell a CD for about $6 and make the same money they do now--cutting out the retailer and distributor. Why they aren't doing that now, I don't know.

As for the ethical issue of downloading, we can discuss it all day, but the fact is that people are doing it in rampant fashion. Its like a feeding frenzy. What has been a livelihood for artists and songwriters is getting raped. Is it because of the cost of CDs? If the same Limp Biscuit disk was $6, would that stop people from downloading for free? Or is it a backlash against the encroaching corporate presence which seems to be everywhere?

The internet is changing the playing field and anybody who aspires to make records ought to be damn aware that the whole industry is in the midst of a huge upheaval. The old standard of getting signed and having the record company promote you may be going out the window. They may go bankrupt. Considering the way they have screwed artists for decades, that might be a good thing. Yet, I wonder what will take its place? Personally, I cringe at the idea of having to buy music online in MP3 format.

 

[BrettB]

phiew.. what a discussion. I talked for hours about this subjest, and posted tons of emails to friends musicians/producers disgussing this music industry malaise...

I can write several pages with my point of view on this, but I'm kinda tired of repeating myself, so I'm not going to do it right now.

The two things that always pop up thinking about this one:

- you can't ever put a stop to pirating, and the purely repressive way of approaching it from the recod companies is, I think, the wrong one. They waited far too long to use the features of the internet for music propositions

- on the other hand, I ask to everyone, if you respect you're artist: please buy the Cd, or at least buy one now and then. I don't feel comfortable myself having an illegal copy of a musician I have respect for. Especially smaller band, like the great Belgian rockscene for example, have much financial problems, so the least I can do is to buy their Cd, showing I have respect for the stuff they made.

 

[Blackburn]

The thing I can't uderstand about the record companies, as in the big 5, is why they can't see that the current trend in business is to sell more quantity at lower prices. Why are they blind to this obvious trend?

They could make a substantial amount of money if they would be willing to change the pricing structure of CDs. Everyone knows that it costs something like $2 to make a new CD, so why are they charging so much? They are countering the downturn in sales by jacking up prices??? What??? Why??? Why not reduce the cost of CDs and make more money by the volume of CDs sold?

I know that this would cause a major shake up in the industry, because it is written into artists contracts that they receive a reduced % of the royalty rate on discounted CDs, but why not try it? Another issue would be the % of the all-in rate that the artists and producers receive, but that could be worked out if necessary. If Warner Bros., for example, decided to start selling their top line CDs at $9.99 they would make a killing because people would be more willing to purchase their bands and, in turn, they could make money and bring fans to their music. Then other labels would have to react to this to compete and people would be buying music again.

It's stupid to charge $20 for a new CD when it only costs a few dollars to make. That's why no one is buying music anymore. That's why I download free music, I can't afford to buy a CD just to check out a band I've never heard before. Sure, I could when I lived with my parents but that was a long time ago.

Anyway, the record companies are screwing themselves because they are too close minded to think of ulterior ways to increase sales and profits. They have been screwing artists for years and now their greed is screwing them. Pure greed.

No, seriously.

 

[crawdad]

Blackburn--I agree with ya. Record companies seem to be inflexible in regard to the future. Its like they figure they'll just keep raising CD prices if they can't make enough money now. How dumb is that?

I figure they could sell CD's direct download for about six bucks and make the same profit on an album. They aren't even trying to do that. Why? My opinion is that they are hoping that they can use legal leverage to shut down everything that is their competition and continue gouging the public and the artists, while geting fat themselves. They have been greedy for so long that they don't even know how to think any differently.

When I was a kid, an album cost about $2.50. It was fairly easy to come up with and seemed fair. Close to $20 for a CD doesn't seem like such a good deal to me. About ten bucks seems like a fair price. I doubt that it will ever happen.

Sad thing is I am all for artists being paid and against the rampant piracy that exists, but until the major labels make adjustments to the marketplace, my attitude is that I have no sympathy for them if they are that greedy. First, they all but ruin popular music and then they try to charge you high dollars for it. Not to mention screwing artists for years and years. For this service, I hope they all fail, unless they make adjustments to the public and to the artists. If they won't do that, I will look forward to the new music industry, whatever it is.

Maybe musicians should run the music business instead of lawyers, accountants and rich bastards. (wishful thinking, I know)

 

[crawdad]

Just to put it all in a nutshell, the record companies won't give 99% of us a deal and the public wants to download our work for free. Tell me how we are gonna make a living in music? Eventually, even the wannabe bands will figure this out and sense the futility of paying for studio time to make the CD they can't sell.

What I am searching for is the new option--something workable that serves the artists, the record making business and the public in a fair way. I'm not sure I see that third option yet. If it doesn't happen, the term music business may become an oxymoron. I'm still thinking and trying to see what the future is. I know something will emerge, but I don't know what.

 

[David Artis]

Actually there has been talk of creating an attachment to the copyright office which would require any internet user to subscribe to a plan that would bill them each time a piece of copyrighted material was downloaded.

If the FEDS get involved were hosed for sure.

In some ways I like the idea because a writer/performer makes a living from their work - but on the other hand ??????? I don't want the government involved.

David

 

[crawdad]

Maybe the major labels could get legislation passed so they can bill us whenever they "need" more money!

I think the Feds will get involved somehow. Though there are legal issues, ISP's could simply block access to Morpheus, Limewire or the next Napster. I think that would be viewed as an infringement of 1st amendment rights though. And enforcing the copyright laws has grown increasingly difficult thanks to the internet. What are they gonna do--create an Internet gestapo that sweeps your hard drive for pirated materials?

I was reading back through the posts--man--I don't mean to be so doom and gloom, cause I know there is an answer to all this somewhere. Yes it is disheartening that so few seems to care about these issues. Its like the guy who jumps out the skyscraper window and says "so far, so good!"

 

[Blackburn]

Another thing to think about is the fact that Major labels also own the channels of distribution. Not only are they taking money away from the artists through deceptive accounting and pressure tactics, they are making money at the CD production level, the publishing level, and any other level they can.

Maybe they should just create a Pop music cloning lab and just produce stars so they won't have to pay any royalty at all. Then they might be happy.

Once they make enough money then maybe they can create a technology that will bill people whenever they hum or whistle a favorite tune. I mean, C'mon...

 

[Tucci]

it'll all be live

I think that live performances are going to become much more valuable in the future. It might turn out that most musicians who make a living at music will be doing so by performing live.

There is no way to pirate a live performance, and no recording comes close to giving the great experience of attending a great live concert.

Tucci

 

[James Argo]

There is no way to pirate a live performance, and no recording comes close to giving the great experience of attending a great live concert.

That's right Tucci...
I'm also -looking for get signed by major- man since last 9 years, still don't get it by now. But nowdays, I have found other wonderfull things that make us keep playing music. Live performance. And when it comes to making a song, I can always record it in my homestudio, send it to my favorite radio station in town, have 'em play it, and I believe, a good song won't fade away. Having people appreciate of what you do doesn't always push 'em to pay for it... Think in positive way...

 

[TheRealWaldo]

The new laws would require the stations to pay to play your music, regardless of who you are with. You would get only 50% of that payment, the rest would line the pockets of some corporate assholes (no doubt the major labels). What's going on is an attempt to squash the indie movement, as it is ever increasing, and the major industry is ever decreasing.

More at nowheremedia.com

W.

 

[Buck62]

Which reminds me, XM sattelite radio is the coming thing, which will very likely kill local radio dead in a few short years.

I think you're 100% wrong about this statement.
Cable TV didn't kill off "free TV", despite predictions of it's demise.

Right now, XM-Radio service is $10 a month, plus you have to spend several hundred $$$ for the special receiver, and you also get raped for high installation charges.

I can live without XM-Radio quite easily, because I refuse to PAY for something I can get for free.
And remember, "free radio" has a LOT more station-choices than free TV does, so it can remain competitive for a long time to come.

Besides... you don't honestly think that the $10 monthly fee is going to go DOWN, do you?
It's gonna end up like cable TV.... higher rates every 6 months or so.

Heh... I remember a time when most cable-tv networks didn't have any commercials at all!
How long do you think it will be before they slowly work the commercials into XM-Radio?

It's inevitable, because that's the way EVERYTHING goes.

Remember this, too... the internet used to totally free and void of advertisement.
Look at it now!!!

I pity the fools that buy into XM Radio.
They're just creating another new huge media beauracracy.

They just don't realize it yet.

 

[zekthedeadcow]

Live music is the way to go. . . and raves those people who set up raves make a killing. CD's will still be around for a while. I'm starting my own "micro" label and the retail price of most of the CD's I'll be working with will be $10 maybe $15 for really good 72 minute ones but live performances are the things that have to be experienced and the cost of those is starting to rise for indies. I work in the christian market and typically a indie band will get $1 per person but it's becomeing not so unreasonable to ask for $2 now that isn't too much to split between 4 people but once non CD merchandise gets sold you can do faily well. stickers, tshirts, patches, pictures, autographed CD's it's the things that can't exist in the digital domain that the business minded musicians need to look at. Many of the more well known christian indies take two or three songs off their CD and give them away in mp3.com as promotional items so more people come to the shows.

 

[esactun]

Re: Re: Music Business Future In Flux

I think you're 100% wrong about this statement.
Cable TV didn't kill off "free TV", despite predictions of it's demise.

True, I've been cable-less since '84, when my mother thought that MTV was rotting my brain (she was probably right... explains a lot, eh? ). I think that digital TV will kill it though. So few seem to NOT have cable, and who's gonna wanna buy an expensive set-top converter box just to get the same three crappy channels? I think I may go without entirely. I'll still have the BBS!

I can live without XM-Radio quite easily, because I refuse to PAY for something I can get for free.

I with ya 100% here Buck. It's also one of the reasons I find prostitutes unattractive.

I pity the fool

Enough Mr T impressions outta you!!!

 

[cat]

Music has been around before record labels, promoters, program directors, and all the other gimmick titles the industry has created to make money off of someones music. So, whatever changes occur they have been long overdue. If implemented the right way, internet radio could be a valuable tool to rid the music community of alot of corruption.

 

[chessrock]

On the positive side of things . . .

I think that live performances are going to become much more valuable in the future.

I was about to post this very statement, but I got beat to it.

I totally agree. The bands of tomorrow that survive will do so by performing live. Artists will also be forced to look in to other avenues to generate revenue; Merchandise deals will be a major factor: Think Britney Spears lunch boxes, action figures, etc. Also, I'm sure they may even get a lot more in to public speaking, product endorsements, radio talk shows, guest appearances, etc. Think of all the various ways athletes make money besides the time they spend playing.

So in other words, bands that put on stunning live performances will be survivors in the industry's darwinistic shakeout. Not a bad thought. Also, the musicians who make all this outrageous money will actually be forced to do outside activities - in other words, they'll actually have to WORK for their money. Imagine that. Still, not a bad thing.

Plus, with the increased ability to download and try music for free, a lot of lesser-known acts will actually have people hear them. Think about it. Maybe some people will get a free ride on their tunes, but a lot of paying customers will be piggy-backing who may never have heard of the band, otherwise. So what may be bad for the bigger-name artists will be a blessing for the lesser-known.

And if the lesser-knowns have a strong live act to back it all up . . .

So to review, we got a means for unknown acts to be heard. Only the guys with a strong live show will survive. Musicians having to earn their money. Doesn't sound so bad to me. The only negative I can see are what will most assuredly be escalating ticket prices to the shows that are in demand. But you have to consider a lot of bands are under-charging right now as it is.