Saturday, July 26, 2008

Fair shares

Ultimately, the best way to reduce illegal filesharing will be for record companies to realise that the days of ripping us off for 30 bucks a CD are now over, and they need to find a new revenue model.

We want artists to get paid. No one thinks that the guy who puts the effort in should not. But we also know that the last guy to get paid is that guy.

The record industry used to work by controlling the flow of music from artist to consumer. In the pre-Internet world, it was just too difficult for artists to reach a wide audience if they did not have the support of the record company. This allowed the industry to exploit the artists thoroughly. The more a person relieson another to provide the setting for making a living, the more they can be exploited. And record companies are not in the art business--don't kid yourself--they're in the money business.

Now though, the record industry cannot control the flow of music and consequently they cannot exploit artists as thoroughly. They are doomed, dinosaurs in the cyber age. Sooner or later, artists will realise that they no longer need record companies: there's a moment of realisation in today's music world--whether consumer or producer--which comes when you realise that all you cared about was the music, not the packaging, just as really when it comes to washing powder, all you actually care about is that your clothes get clean.

So we realise that we have no real preference for CDs over computer files, and artists will realise that they don't actually need much in the way of marketing or distribution, and whe you take them out, there's nothing left but a pretty cover. Artists will realise that they can just cut out the middleman and do it for themselves (and some do). New entrepreneurs may arise, who are making less off the back of artists, but because they have lower overhead, still make a profit.

But EMI is doomed. Because really it doesn't have a relationship with the artists, or with us. It just feeds on both. And its response to the new paradigm of music consumption is to try to punish us, not to try to serve us better.

It may be that some sort of licence, as suggested by Billy Bragg, will allow the likes of EMI to make money from music temporarily--and I think I would be willing to pay 50 bucks a month to download music (although you can picture how it would work: there'd still be "premium content" and so on), but this can't be the long-term solution, if only because not everyone will pay, and once filesharing is legitimised in this way, people will be asking why they should pay when others don't.

There is still money to be made in merchandise, and it may be that the EMIs will find ways to make more from that, using music as a sort of "loss leader". I can envisage EMI giving you the Arctic Monkeys for free, because if a band is successful in this paradigm, their enormous name recognition and market penetration will allow you to sell a lot of t-shirts, and if EMI can't find a way to shoehorn advertising into free music, it shouldn't be in any sort of business. Ultimately, this is probably the future of music, just as it is for television: the advertiser pays, not the consumer (and I'm looking forward to the day that the BBC carries ads on its online service, if it doesn't already, because then it will quickly become available worldwide: reach is key for advertisers).

The British government is trying to change the risk/reward ratio for downloaders. Currently, as most of us know, we can either pay 30 bucks for CDs or pay nothing and risk a big fine. That risk is quite small, because the record companies do not want to spend millions pursuing grannies and teens for a few grand apiece. The publicity is terrible and the payoff is not enough to make it worthwhile. They occasionally pursue someone pour encourager les autres, and try to shut down the major sites, but they recognise the impossibility of seriously affecting filesharers. We are distributed; there are no "Mr Bigs" that you can take down and destroy the network, because the system is thoroughly decentralised. Also, they are well aware that so many of us do it that it hurts their image to be seen suing people who are doing something that has become as common as blogging.

So the government wants to use ISPs to punish downloaders, or to frighten them at least. It's a bit like Cnut trying to hold back the tide. Music comes in the form of easily exchangeable files. We'll find a way to do it, no matter what you do. And slow us down on one ISP and we'll find another: does Baroness Vadera not realise that word will spread that ISP X hurts downloaders and ISP Y doesn't? It will become a selling point. The government will end up having to act against ISPs, and will be painted as taking the side of one industry against another, all so that it can punish teens who can't afford to pay for music in the old paradigm. Good luck getting those youngsters out to vote for you, Mr Broon, when you take away their 50 Cent.

In any case, the day is done for record companies, even if reactionaries like Vadera don't want to accept it. It's time for the model to change. As he often does, Billy Bragg nails it:

In an ideal world, such royalties or the blanket licence fee would not be paid to music companies themselves but to an independent collection agency that would pay the money directly to artists. The music industry treats the internet as a threat, whereas for artists it gives us an opportunity to get closer to our audience than ever before. We must be very, very careful that we don't alienate those fans and make it impossible for the next generation of singer-songwriters to have viable careers.

In an ideal world, we'd realise that EMI has had its day. We don't like EMI, and eventually we'll get what we do like: artists paid for their work and fatcat executives on the dole. But until then, the government will do what it is paid to do: not give us what we like, but try to coerce us into continuing to supply an outdated revenue stream for the record industry's Cnuts.


At 8:17 am, Anonymous Mcleod said...

This comment has been removed by a blog administrator.

At 12:49 am, Anonymous $Zero said...

until artists learn how to be marketers, nothing will change that much.


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