Radio Tries to Legislate Life Support for Its Dying Business Model

I haven’t listened to over the air radio in years.  Because of the ads.  And because I don’t have to.  There are about a million better ways to get the music you want, without the extra annoyances.  Like iPods, iPhones, Pandora, CD-Rs, XM radio, singing, beating two sticks together, farting.  Anything.

emptybag In fact, I wouldn’t listen to over the air radio if they tried to make me.  Which is exactly what the National Association of Broadcasters and the empty-bag holding, cat mourning RIAA want to try to do.  Every time I start to think the RIAA has finally begun to grasp the inevitable fact that it cannot stuff the digitally downloadable cat back into the bag, it does something even more desperate than suing dead grannies.

Like, say, trying to get Congress to require that all mobile devices contain FM radio receivers.  So we can have more music choices.  Riiight.  They’re trying to do me a favor.  How nice.

If this happens, I’ll renounce my US citizenship, burn all of my CDs and cut off my ears.  Seriously, has there ever been a worse idea?

We can’t just let this drop.  We have to humiliate the people who came up with this harebrained scheme as a warning to ensure that other people with similar thoughts keep their bright ideas to themselves.

Gary Shapiro, president of the Consumer Electronics Association sums it up well:

The backroom scheme of the [National Association of Broadcasters] and RIAA to have Congress mandate broadcast radios in portable devices, including mobile phones, is the height of absurdity. Such a move is not in our national interest.  Rather than adapt to the digital marketplace, NAB and RIAA act like buggy-whip industries that refuse to innovate and seek to impose penalties on those that do.

These organizations need to realize that their business model is dying, and nothing is going to save it.  We need to tell them to either evolve or die.  And if they don’t want to evolve, to hurry up and die.

How (Not) to Win Musicians and Influence Songwriters

catoutofbagIf you’d told me three hours ago that I’d ever write a post defending in any way the sorry state of affairs in the music industry or criticizing someone’s idea of how to reform it, I’d have laughed in your face.  Literally.

But I guess you never know. . .

I saw a link on Twitter to this post, in which a partner at a venture capital firm waxes philosophical about the music industry.  You know it’s a serious post because it uses the word “paradigm” in the title and nine more times in the post itself.  Now that we’ve conquered Earth Hour, maybe we could plan Paradigm Day?

Fancy words aside, the author (in a nod to Cher and both Madonnas he goes by the mononomial Albert on his blog, but being a completist with a mouse, I know his full name to be Albert Wenger) makes a couple of good points.  He also makes a really, really bad point, but we’ll get to that in a moment.

There is no disputing the fact the the more immediate and direct distribution channel provided by the internet has the music industry (and the newspaper industry, among others) all twisted up.  And while I don’t know about profitable, I agree that many of the smaller, more creative music services are probably unlawful, at least under the current pre-shift paradigm (I feel smarter, having just typed that word).  All of this means, of course, that something has to change.  Either the technology has to change or be restricted to conform to the old ways of selling music (very unlikely, having been unsuccessfully tried) or the laws and licensing practices have to change to adapt to the technology (the industry isn’t happy about it, but this is already happening).

I have long said that the cat is out of the bag, and that all the lawsuits in the world against grannies and dead people are not going to get the cat to jump back in the bag.  I have also said that I think shutting down these new music services is bad for artists and songwriters.  Recall that I am a songwriter who gets an occasional check from BMI, so unlike 95% of the people who chime in on this issue, I actually have a little skin in the game.

Having said that, there is nothing appealing to me about the three “experimental” services that Albert mentions.  For one thing, artists can always make their music available, via their web site, MySpace or any of a countless number of other online services.  The difficulty is getting enough buzz to make people listen to it.  And, of course, paying those who help create it.  Secondly, I have no desire whatsoever to get “scenes which play differently each time based on your interaction with them via external sounds, touching and moving the [iPhone].”  I just want to queue up a record and listen to it, using technology that makes that more portable and convenient.

Dressing up the experience with smoke and mirrors like faux interactivity will neither placate the empty bag holding record labels nor improve the experience of the listener, who just wants to hear the music.

The reason a lot of music should be accessible over the internet, via some of these new music services, is simply because it helps generate a buzz that will cause people to want to hear more music by the artist.  Which increases sales at Amazon or iTunes, and attendance at concerts.  No one is going to use as a substitute for a music collection, but lots of people may add songs to their collection they hear at  Give away some goods to sell more.  That’s the ticket.  And if you need to add some Web 2.0 flavor, pay a percentage of the ad sales in lieu of royalties.

The best way to tell someone what they don’t want to hear is to just put it out there, without beating around the bush.  Albert uses that most hated four letter word.  You know, the one that begins with an f:

I believe these experiments point to the future of online music which will be a paradigm shift in why music is distributed (and how it is licensed) and how we consume music, in which a lot of music will be free and will be experienced interactively!

Again, the only interaction I want it to click the play button, but I don’t quarrel with the concept that people should and will be able to hear lots of music without paying for the privilege of hearing it.

Then, the train falls horribly off the tracks.  Recall that Albert is a partner at a venture capital firm, which assumedly means he invests in new products to make. . . money.  Cash, dollars.  Probably millions of them.

With that in mind, this little gem:

Of course one immediate question about such a new paradigm is how artists will make money.  I think it would be a grave mistake to be caught up in that question.  For starters, it seems to me that over the course of history very little of what we now think of as great music was produced specifically because the people making it were concerned about making the music a commercial success (I was reminded of that this morning listening to “Breakfast with the Beatles”).  Here too is a parallel with “The Invention of Air” – Priestly and many other scientists were and are not motivated by making a lot of money.  On top of that we may finally be entering an age of post-materialism.

Where to start?

For one, it’s epically ironic that a venture capitalist is preaching to starving artists and songwriters about entering an age of post-materialism.

I guess what he’s saying is that if you focus on the music, the money will take care of itself.  Of course, musicians have been doing that for centuries, and it hasn’t worked so far.

Second, if you don’t convince a critical mass of artists and songwriters that the monetization of their art will put food on their table and money in their savings account, there will be no good art to monetize.  Is Albert suggesting that people make music at nights and on weekends, after working at a real job?  There are many reasonably successful musicians and recording artists who have to work at real jobs to support their music under the existing system, which at least gives a nod towards getting them paid.  It is, at least, naive to ask these people, many of whom have already been sold down the river by the music industry, to trust a bunch of developers and venture capitalists to take care of them.

And, finally, to say that much art was made for the love of art and not for money is so completely beside the point and devaluing that it’s hard to respond logically.  Other than the alarming number of made for TV acts, just about every musician begins with a calling to the music, not just to get paid.  What starts out as a form of self-expression sometimes turns into a career.  To say that artists who become successful should not worry about getting paid is like saying that some chef who used to make brownies with her mom for fun should let diners eat at her five star restaurant for free.  It also says a lot about the value placed on the music, as opposed to the web applications and capital that promise to turn that music in
to money.  To value the store more than the good sold is backwards and dangerous.

Look, blog posts don’t have to be footnoted dissertations.  And Albert has some good points hidden beneath the smart talk (that’s a reference to one of my favorite movies).  But to say we shouldn’t worry about how the artists get paid is not the way to start the ol’ paradigm a shiftin’.

That Sound You Hear is the Cat Laughing

emptybagAmid the never ending and ultimately futile efforts of the record industry to stuff the cat back into the bag and drag us all back in time to the halcyon days when they controlled the gateway to music the way Scoble used to control the gateway to blogging comes word that a government study has found that peer to peer downloaders actually buy more, not less, music.  So what if the government is Canada.  Canada gave us Neil Young and Rush.  We won’t mention Celine Dion or Bryan Adams.

The finding that most people are talking about is this one:

Among Canadians engaged in P2P file-sharing, we find a positive and statistically significant relationship between the number of music tracks downloaded via P2P networks and the number of CDs purchased. For an increase in the average number of P2P downloads per month of 2.718282, the number of CD purchases per year will increase by 1.212. For an increase in the average number of P2P downloads per month of 1 (ie., 2.718282/2.718282), the number of CD purchases per year will increase by (1.212/2.718282 =) 0.44. This suggests that there is some form of music creation effect derived from P2P file-sharing, discussed below.

In other words, on the average a user who downloads two extra CD’s worth of music will purchase roughly an extra CD.  This is an interesting finding that certainly supports the position that music sharing is not the prime evil the record industry says it is, although the study also found that people who download songs because they find CDs too expensive buy less CDs.  I suppose that means those who actually buy CDs after downloading songs are subsidizing the cheapskates.

The more interesting finding is that, when looking at the entire population, the study found no evidence that peer to peer file sharing has any effect whatsoever on CD purchases.  That’s the only finding that should matter.

My personal experience with web accessible music (I don’t use peer to peer applications for reasons that don’t involve fear of the man) is similar to Rex Hammock’s:

I can look back over the last five years and point to literally hundreds of dollars of purchases I’ve made because I can sample music in new ways via the web. In my case, I am sampling music via or the massive sample file the SXSW folks put together each March. So, while I do not actively participate in anything that can be construed as an “illegal” file-sharing network, I can understand how having more exposure to an unlimited supply of music will result in the increased purchase of a small sub-set of that music.

Much like the global warming debate, opponents will attack and dissect this study, and spin it to their position.  But it’s one more brick in the wall of arguments that scream for the record industry to quit grieving for its deceased business model and focus on the future.  The cat’s out of the bag and he’s not coming back.

It could be worse for the record companies- they could be polar bears.

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One Less Cardboard Sign Beside the Interstate

Looks like might not join the other activists and hold up a tiny sign beside the interstate on June 26.  Can’t say I blame  Granted, it may be making a logical decision for a greedy reason, but so what.

signs I’m all about protesting this ridiculous royalty rate increase, but given the fact that a significant portion of the music industry would love for all third party controlled online music to disappear in the hopes that the cat would somehow run back into the bag, thereby preserving their distribution monopoly, is shutting down internet radio for a day really going to help?  What they ought to do is play only music that isn’t captive to the music industry cartel.  There are millions of artists out there who control their own catalog and would happily allow their music to be played on these stations for a day- or longer- without payment.  It would show the cartel- and the public- what the future of music distribution looks like, and it might force the cartel to reason.  It would also give a ton of deserving artists some valuable and deserved exposure.

You’ve got to toss some tea in the ocean to make a difference.  Balsamic hyperion didn’t work and neither will turning online radio off for a day.

If you can’t change the game because someone else makes all the rules, it might be time to find a new game.  With better rules.

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Alms for the Poor or Bring Out Your Grateful Dead

willblogforfoodC|Net reports that the music industry is offering “small” webcasters the option of paying “below market” royalty rates on the songs they play, keeping the required royalty rates essentially the same as they are under a 2002 law called the Small Webcaster Settlement Act.

It’s not known what the cutoff for “small” would be, but the SaveNetRadio coalition argues logically that almost all webcasters should be considered small by broadcast standards.  Once they get more popular, however, they might very well grow themselves out of business under the proposed plan.

While I’d love the ability to stream some MP3’s from Newsome.Org, the bigger issue is not helping bloggers put a few streaming MP3’s online, it’s ensuring the viability of the places most of us go to get new music- the Pandoras and Rhapsodys of the world.

As Techdirt points out, this is likely an attempt to distract the growing number of politicians who have been looking at this very important issue.

While I’m happy to see the music industry negotiate a little, there’s a lot more work to do before we’re done.

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Pre-Owned Cars, Unrequested Fission Surplus and Digital Consumer Enablement

They started calling used cars pre-owned cars as a marketing ploy to make people feel better about buying a used vehicle.  I’m not sure why people needed to feel better about it, but apparently they did.

And I just know I’ll feel a lot better about DRM infested songs if we start calling it Digital Consumer Enablement, or DCE.  I had to check to make sure I wasn’t at The Onion, when I read this nugget:

Speaking at a panel session at the NCTA show in Las Vegas Tuesday, Zitter [HBO’s Chief Technology Officer] suggested that “DCE,” or Digital Consumer Enablement, would more accurately describe technology that allows consumers “to use content in ways they haven’t before,” such as enjoying TV shows and movies on portable video players like  iPods.

No need to worry about all the problems, technological and philosophical, that DRM causes.  Let’s just give it a pretty name and everything will be all right.

As Joey deVilla points out, Mr. Burns would be proud.

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DRM: Dumbass Restrictions Maintenance

Everyone is talking about crime
Tell me who are the criminals
I said everybody’s talking about crime, crime
Tell me who, who are the criminals
– Peter Tosh

I can’t believe what I just read in a Forbes article about DRM.

Here is a quote from the article explaining why other members of the record label cartel are unlikely to follow EMI and Apple’s lead and start selling music online that is not infested with DRM:

Other online music retailers say they’re worried that following Apple’s lead will confuse customers who may already be baffled by a crazy quilt of restrictions that envelop the industry.

Isn’t that sort of like saying that poor people would be confused by having money?  Or at least like saying renters would be confused by ownership.

Anyone who’s lettered enough to make it through the registration process at some online music store will be able to distinguish between “restricted” and “unrestricted” and “$.99” and “$1.29.”  And even if some people automatically click on the cheaper DRM-infested option- so what?  People buy crappy stuff all the time because it’s cheaper.  The confusion argument is a canard.  As Forbes points out, rocket science is less confusing than the myriad of subscription plans these online stores offer.

Meanwhile, executives of other cartel members said at some OPEC, I mean record industry, event that getting rid of DRM is not a priority for them.

Really?  I’m shocked.

There’s no confusion there, only greed and shortsightedness.  It’s about trying like mad to protect a monopoly built on a dying business model.  It’s about the nominal cost of manufacturing a CD and the not so nominal cost the cartel charges to the buyer and the artist for doing so.  And it’s about how little respect the music industry has for its customers.  “We don’t want the whole world to be a college dorm.”  Are you kidding me?

It’s not about whether it’s good for the cartel.  It’s about what customers are entitled to and what they are disciplined enough to demand.  And sometimes, as Larry Borsato points out, what they are promised.

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What Do the RIAA and My Dog Have in Common?

They are both a walking bad decision.

riaaLucky sees the pantry- he immediately roots around for a loaf of bread to eat.  He notices some Amdro on an ant mound- yum…tasty.  At any given time, he has four or five bad ideas working simultaneously.

The RIAA sees the record label cartel begin to weaken- it immediately begins carpet bombing the resistance, and takes out a lot of customers, both wholesale and retail, in the process.

Techdirt led me to a very interesting article in yesterday’s New York Times.  In an op-ed piece by a couple of guys who used to own a record store – you know, the kind you actually drive to and browse- the following good points are made.

First, “The album, or collection of songs – the de facto way to buy pop music for the last 40 years – is suddenly looking old-fashioned. And the record store itself is going the way of the shoehorn.”

As a deep tracks sort of guy, this is the single worst thing that has happened to the music industry since someone decided to make Barbara Streisand a star.  I don’t want studio enhanced dribble from some eye candy media creation.  I won’t good albums full of good music, made by people who can actually write songs and play instruments.

Today’s music business is The Monkees writ large.

Another truth, “By continuing their campaign to eliminate the comparatively unprofitable CD single, raising list prices on album-length CDs to $18 or $19 and promoting artists like the Backstreet Boys and Britney Spears – whose strength was single songs, not albums. The result was a lot of unhappy customers, who blamed retailers like us for the dearth of singles and the high prices.”

Putting a couple of good songs on a record along with some filler and tossing it out the door has been a favorite trick of the record labels for as long as I have been buying records.  Back in the late 60s and 70s, we knew what acts could be counted on for a solid record and which ones couldn’t.  If there was a song on one of the latter records you wanted, you could either buy the single, record it off the radio or borrow your buddy’s copy and record it to a cassette.

Amazon (actually CD Now, but who remembers them?) landed the first blow to the traditional record store.  Most people can wait a couple of days for a CD, so online buying makes a lot of sense.  I will not buy a DRM infested song, yet I have not been in a record store in years.  I just click a button at Amazon and 2 days later the CD shows up at my door.

Then iTunes and others landed a blow to both the traditional record store and Amazon, by selling songs a la carte.  While I have a philosophical objection to DRM, to our kids DRM is just as normal as album covers and liner notes were to us.  They happily download the songs they want- DRM or not.  Going to Amazon and buying a CD is as strange and unlikely to them as downloading the latest Hannah Montana song is to me.

The world changed.

The RIAA then made it worse by trying to change it back.  From the artice:

Labels delivered the death blow to the record store as we know it by getting in bed with soulless chain stores like Best Buy and Wal-Mart. These “big boxes” were given exclusive tracks to put on new CDs and, to add insult to injury, they could sell them for less than our wholesale cost. They didn’t care if they didn’t make any money on CD sales. Because, ideally, the person who came in to get the new Eagles release with exclusive bonus material would also decide to pick up a high-speed blender that frappeed.

The RIAA tried to stuff the cat back into the bag, and all it accomplished was to put a lot music store owners and a lot of passionate music fans out of business.

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Music Matters

Great post by Richard Querin today about music- both management and songs. He talks about the various programs he has used to organize and play his digital music.  Richard is in a deep Linux phase, so he uses MOC.  Here’s my story.

Unlike Richard, I made a concerted effort to move my music onto my computer.  Back in the nineties I undertook to rip all of my CDs.  The first time, when hard drives actually cost real money, I just put the best songs in my digital library.  Later, I went back and put all of the songs in there.  It took about 3 forevers.  I’m not sure exactly how many CDs I have, but it’s in the thousands.  Once I got the old CDs ripped, it became pretty easy to rip the new ones as I bought them.

I have never shared my music files and I have never bought music with DRM.

I have, however, become my parents, as my musical era of interest generally ended shortly after I finished graduate school.  Other than alternative country, some Americana and a little newish blues, I don’t buy many records recorded after 1987.

My application of choice for music management and listening is J. River’s Media Center.  It handles large libraries well and has a lot of good features.  I have never understood why it didn’t generate more buzz among music fans.

One of the great pleasures of having a digital music server is to put the player on shuffle and hear some songs you forgot about.  Sometimes ones that really move you.  Richard gave a list of songs he’s come across like that.

Here are some off the beaten path songs on my server that remind me fondly of days gone by, in no particular order.

Les Dudek – I Remember You
LeRoi Brothers – Pretty Little Lights of Town
Raging Fire – A Family Thing
Al Green – You Ought to Be with Me
Atlanta Rhythm Section – Champaign Jam
Bob Seger – Get Out of Denver
Stephen Stills – Change Partners
Paul Davis – I Go Crazy
Fred Knoblock – Why Not Me
Ten Years After – I’ve Been There Too
Starbuck – Moonlight Feels Right
Starland Vocal Band – Boulder to Birmingham

Music and computers really compliment each other.  If I had to rummage through a bunch of CDs to find the record I wanted to hear, I’d rarely listen to music.


Reinventing the Music Industry

Mike over at Techdirt has a very interesting read about the music business. As a long-time musician, songwriter and, most importantly, music fan, the parade of bad decisions made by the music industry over the past few years has just about driven me nuts.

As Mike points out, a large part of the problem is that portions of the music industry, primarily the record label cartel represented by its henchman the RIAA, is trying desperately to hold on to what is quickly becoming an obsolete business model. Beginning with the re-examination of industry economics that led up to Courtney Love’s excellent piece in Salon back in 2000 (which proves either the value of ghost writers or that Courtney isn’t the complete nincompoop she generally appears to be), through the emergence of online distribution as the channel of choice for the new generation, and up to the current spate of lawsuits against children and dead people that have coalesced all manners of opposition into a line of defense that is starting to turn the tide of battle, the music industry has struggled to figure out a way to preserve what has long been the highly profitable role of both gatekeeper and banker to the music.

The music industry in general and the record labels in particular have not faced the fact that the world has changed- and all of the lawyers in the world can’t change it back. The bag is empty and the cat hasn’t been seen in years.

Which leaves the music industry with two choices, and only two choices: find a new business model or hold on as hard as you can until the cash pipeline dries up. The smart choice is to take some pain now to become a part of the new world order. The dumb choice, which seems to be the way the industry is going, is to sue everybody in sight for moving your cheese. Those lawsuits work on underfunded individuals who have no choice but to capitulate. They don’t work on an entire movement or on moms from Oklahoma.

Other than the fact that you can’t turn back time, the most aggravating and self-destructive part of the record label’s strategy is that it is attacking the very people whose goodwill is a requirement to sell records. It takes biting the hands that feed you to a new level. No one would complain too loudly if the RIAA sued people who share thousands and thousands of songs with anyone who wanders by. But the RIAA decided early on to sue all comers, thus the public relations war was lost at the first battle. Sometimes it takes more than money to prove you’re right, and sometimes even the Deathstar blows up. I don’t think that ever occurred to the record label executives, even though the automated voice has to be saying in the back of their minds “auto-destruct sequence initiated, this ship will self destruct in 4 minutes.”

In my opinion, driving force behind the record labels insistence in trying to stuff the cat back into the bag is that the record labels historically made so much of their money via the creation and distribution of the media (meaning the actual CDs and before that LPs and tapes, as well as the album art, etc.), and they know that the margins of old are not going to be available under the new distribution system.

When your entire industry is based on huge margins, it’s not surprising that you’d resist anything that threatens the status quo. Additionally, if songs are sold online for a buck a piece, the artists are going to quickly realize that it’s cheaper for them to rent some studio time, pay a producer and take the finished product directly to the online distributor.

Without the ability to serve as the gatekeeper, the record labels recognize that their position in the entire process is precarious. That’s why the RIAA isn’t going to buy into Mike’s plan of artist promotion, more product and resulting loyalty. Which means that the only alternative is to take the record labels out of the equation- their own short-sighted actions in effect becoming a self-fulfilling prophecy.

Like it or not, the world has changed. While the change was bad for the record labels, they should have known the gravy train wouldn’t last forever. And over time this change will prove to be very, very good for artists and consumers.

It’s time to clean up the milk and go back to work. Let the record labels keep searching for the cat.

We know they’ll never find it.