Reflections on the fate of the music business as we know it.

A panel I attended recently at the Recording Academy addressed digital music, particularly the problems songwriters (and record labels, artists, etc.) have getting paid for their music, particularly in the face of file-sharers obtaining copies for free.

A vocal majority on the panel, and in the audience seemed to take the position that the only solution is to require Internet Service Providers to charge their users a monthly digital media consumption fee of some sort. This, it seems, part of the idea behind CHORUSS, a pilot program at a few universities, which requires students to opt-in by paying a monthly fee, that the University will then pass along to content owners.

For me, this solution is plagued with problems. First, in all likelihood, if implemented on a broad scale, it will be an automatic charge we all pay. Those who never file-share or download media content will be subsidizing the users who DO download, especially those who take more than their fair share. Second, this looks to the wrong party for payment. Isn’t asking ISPs to pay music royalties when songs pass through their networks similar to asking UPS to pay book authors’ royalties when they deliver books bought via Amazon.com?

Now, of course no solution to this problem is perfect, but it’s my sincere hope that the content community and the tech communities can find a better solution. Unfortunately, other solutions discussed involved asking ISPs to log every bit of data passing through every user’s IP address… which raises tremendous privacy concerns.

One interesting view was that espoused by a manager/consultant on the panel who seemed to suggest that we just need to accept that file-sharing is here, and that many (but not all) consumers are getting (music) for free… so we’d better find something else to sell them. (Sounds like a ‘loss-leader’ approach). ‘Give away the recordings of your songs… develop a fan base, then sell ‘em concert tickets and T-shirts’… seemed to be his notion.

Clearly, there’s no good solution, but the prevailing view of the panel is that something must be done. If artists such as songwriters can no longer receive fair compensation for their efforts.. they’ll find something else to do… and society will be the worse for it.

2 Responses to Reflections on the fate of the music business as we know it.

  1. I have been dabbling with music for over 20 years and as a kid I remember recording all the music I wanted off the radio. This is the same exact thing as file sharing. The problem is not in file sharing it is the saturation of the music industry that has caused this problem. Also the greed factor has also plagued the industry a cd cost .75 cents to manufacture and it sits on the shelf for 17.99 thats ridiculous. Also the quality of music has went completely downhill. Who wants to buy and album with at most 2 good songs and the rest of the album is garbage. They are just getting a taste of their own medicine. How does it feel to have someone steal your music.
    The labels and artist are common theifs I would not recommend sending them a demo tape ever especially if what you have is worth a listen.

    KARMA BABY !

  2. I wonder the same exact things.

    First off, based on my research, it appears that the problem of file-sharing is not as bad for revenue streams of artists as it is made out to be. Several studies have indicated that at worse, the loss of corresponding music sales is minimal, and at best, it actually serves a promotional effect that increases sales.

    As for simply requiring ISP’s to pay a sort of ‘tax’ to recover royalties for p2p sharing, I’m not sure this is a good idea. My primary reason would be the success of iTunes. It alone is selling approximately 1 billion single digital downloads every 6 months. With the CHORUSS plan, or something similar, iTunes, and every other smaller business, would be practically eviscerated. It’s hard to argue for a plan based on the premise that no one pays for downloading music when that plan would stop a company that sells 2 billion downloads of music every year.

    I tend to agree with the unnamed artist manager that you mention in the second to last paragraph. There is a mountain of research I can show you that gives his idea merit. Basically, since digital music is a non-scarce resource, it makes no sense to try to monetize it. Better to use it as promotion for the scarce resources you can provide: not only tangible goods like t-shirts, live shows, and other merchandise, but also intangible goods, like access to the artist, or even convenience.

    Before you dismiss the last idea, remember that the bottled water industry is making over $6billion a year for convenience. They’re basically selling a product that any home with indoor plumbing can get for free. And if you don’t own a home, you can still tilt your neck up when it rains.

    The solution will most certainly require much creativity. With all the technological changes, adaptability is a must. But I don’t believe the situation today is any worse than the one facing sheet music providers when the piano roll was invented.

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