The RIAA only cares about what is good for the record industry, which is an ever shrinking subset of the music industry overall.

The RIAA, the people it represents, and the rest of the media industry can't change. They are used to one form of business model. Its like asking a agent of the Spanish Inquisition to become a Muslim. Its just not going to happen. They will continue to extort, and threaten their customers until the last one finally expires.

Before the invention of the phonograph, the only way to hear an act was to go and see it, or wait for it to tour. The idea of a music "industry" is a quaint 20th century notion, and the 21st will see its demise. I for one look forward to its demise and the demise of all the legal carrion it supports.

A good article, well written..Thank you.

"That's also true in music," says Leonhard. "The real money is not in the CDs. It's in the gigs, the merchandising, the sponsorships."

I have heard this argument before. Surely the world of live music, concert promoters, merchandisers etc is just as restrictive and shady as the world of record company executives. I can understand why the Rolling Stones or Radiohead might turn coin from tours - they have expensive lawyers - but the live circuit is sewn up otherwise. Isn't this just a case of jumping out of the frying pan into the fire? It seems redundant to mention merchandising as a separate revenue stream, because CDs are just merchandising; the same forces that make CDs unecomical affects merchandising as well; why pay £1.50 for an official Motorhead coffee mug when you could buy a knock-off for 50p?

He mentioned the iPhone!!!!

I posted something similar up on Mog a few weeks back. The industry is changing, unfortunately in their desperate attempt to control the industry the big labels are actually driving away the "consumer" and turning them towards the independants.

Feel free to look at what I posted:

Who owns music? Parts 1, 2 and 3

The listener as consumer.

http://mog.com/Alien8n/blog_post/108647

Copyright and the artist.

http://mog.com/Alien8n/blog_post/110402

DRM or not DRM? That is the question!

http://mog.com/Alien8n/blog_post/112784

"If people like the book, they'll buy a copy, rather than printing out the PDF."

That's because most of us don't have printers that can turn a PDF into a nicely bound book for less money than a publisher can print a copy and post it half-way round the world. Contrast with CDs and DVDs, where I can produce exactly the same product as I buy in the shop for a fraction of the price.

To make matters worse, most folks actually want the product on a memory stick or similar, which is a product that the shop doesn't actually sell. As and when portable e-book readers are as common as portable stereos, the book industry will discover that no-one wants to buy paper products anymore.

*Then* it will be fair to compare books and CDs, but it will no longer be true that "if they like the book, they'll buy a copy". If you want a glimpse of the future of publishing, consider the fate of the most recent Harry Potter -- photographed within hours of release, almost certainly OCR-ed by now, and probably available in a nicely marked-up format somewhere on the internet.

that article would have got bully's star prize.

I still find it amazing that the record industry (and therefore the RIAss.A) just don't get it. It used to be that tours by bands were to promote and boost sales of recorded music and were often run at a loss (I know, I worked on a lot!) or at most, break even. That is so not the case now nor has it been for some years now.

When merchandising really started to kick off (mid 70's) that's when bands (or more correctly, their management) realised that there was another revenue stream that was INDEPENDENT of the record company. You only have to see how tour sponsorship has been taken up to realise how cute the management (oh ok, and some musicians) have been. A tour by a major artist costs massive moulah so if somebody else contributes for having their name up in lights, then so much more money for the band.

Leonhard has got this worked out. Give away (effectively) the least costly component, his book, generate interest and then consultancy fees, paid-for articles will flood to his door.

Same with Radiohead, it doesn't really matter that they're asking fans to decided how much to pay, these fans will pay to see them, buy merchandise, videos and even buy the CD's to keep.

Oh yes, if I was working for a label I'd be very worried right about now.

I semi-agree with the guy here. I'm unemployed, but have filled my time up by writing a book, which I intend to be a downloadable, or snail mail delivered ebook. The benefit is that, postage costs aside, I get just about all the profits from it. A friend of mine, another author, has his books published traditionally, and for every 1000 copies sold, he gets £1000. Pretty poor when you consider his books sell for £10-15 a piece!

I don't buy a newspaper every day. I don't read an online newspaper every day. When I do read an online newspaper, it's the Telegraph - I am used to the feature writers, and the editorial style. When I buy a newspaper it's the Telegraph - I am used to the feature writers, and the editorial style.

When I buy a copy, I do the crossword (sometimes more than half of it). And I cough up something like 20 quid per year to be able to do the online crossword (which comes as an applet, which can be saved online, printed as far as you got, and checked to see how much of it is right).

I don't make illegal copies of their articles because I don't need to: if I see something interesting that I want to show someone, I can just sent the URL coz anyone can read it.

To my mind, they have adapted well, they still make money, they have reinforced loyalties. They have paid for online services which make them money, but their core product (the news) is freely available. If you buy the paper, you can read it on the train, or in your armchair, so it has additional features/value.

The "music industry" doesn't need traditional record companies in the role they have always occupied. It does need: Resources (both technology and skill) for new artists to improve their product; Editorial filtering, to help listeners find new artists. Music which costs nothing to try out doesn't need marketing, it just needs introducing to listeners - if it is good, people will buy CDs, and go to concerts etc., and if it isn't good, the artists will get honest feedback and either record something else or carry on with their day jobs.

If the Daily Telegraph made you pay again every day to read online copy, and sued people who emailed copies of those articles to their friends, I wouldn't read it online, and I wouldn't buy it.

Given that they assume all music tracks are equal - then can I sue this RIAA for my erroding CD collection thats rusting away which is stored as outlined on the disc and not scratched.

Also what is this Record thing they speak of?

Also if they sue for not buying records then I'm equaly allowed to sue them for poor records.

But we all know they are the most arragant up there own ass bunch a consumer has to deal with.

Now lets form the PARB (People Against Record Beurocracy). Generate stacks of counter sues/cases against RIAA and watch them get buried in there own juices.

Rock on

There is no proof that the business model Leonhard suggests works. I don't know for how many years the story of the "T-shirt guy" has been recycled to explain that the business model of the music industry could be balanced on the back of merchandising, concerts and corporate sponsorship/advertising.

It doesn't take a genius to spot the flaws in the design; human nature being what it is, if people don't have to pay for anything, they won't. The idea that people will voluntarily donate to a tip jar is spectacularly naive. Official merchandise is already ludicrously over-priced - I paid £20 for a t-shirt at a concert nearly 15 years ago. If artists are going to rely on this for income the £50 t-shirt is just around the corner and you're back to exactly the same problem as selling CDs: you want £50 for an item that costs £0.50 to make because there are so many people that want a slice of the pie. Also in a splendid irony you'll have to clamp down on the counterfeiters in the same way as the downloaders as they're taking money out of the artists' pocket so you really just moving the problem around.

His idea that I should pay 1p to hear a track and then 45p to MasterCard, Visa (or whoever) is just as a ridiculous model as the current record industry. I'm not paying 45 times the cost of the track to a middleman to shuffle a penny around the Internet, that's just laughable as a business model. But getting back to the idea that concerts should fund the record industry; tickets for a gig like Led Zeppelin's reunion are £125, how much higher will those prices go if that has to pay for Robert Plant's Lear jet? What about the artists who can't or won't tour? Corporate sponsorship? Where is artistic freedom when you have Acme Corporation sponsoring your favourite act? Are you saying they won't start limiting what an artist can or can't do? What about the artists who refuse to sell their soul to corporate sponsorship? Can you really see NWA or Public Enemy doing a deal to hawk sneakers or soft drinks?

His entire approach is just bollocks - he gives away his book so he can get more money as a "consultant" - some of the most immoral, useless money grabbing cocks I have ever known have been "consultants." Just ask the Public Accounts Committee about how great consultants have been. Leonhard is just peddling that rubbish from his time during the dot-com bubble, micro-payments and all that crap. The man belongs in a museum.

You're wrong. On 2 counts.

I'm a big fan of both music and lierature. Okay the music is heavy metal and the literature is fantasy and science fiction but I'm still a big fan of both.

Downloading music has NOT stopped me buying cds. All it has done is introduce me to a lot of new bands that I've not heard of before and enabled me to be more selective in my cd purchases. There's the irony, filesharing has INCREASED the amount of music that I purchase. However I don't purchase at the ridiculous prices that the industry expects me to pay, I look at the costs and purchase when it's reached the price I think it's worth. Sometimes that price may even be above 10 quid, but most of the time it's closer to 5.

The same goes for books. I read a lot. Probably at least 1 book a week, sometimes more. I'll read graphic novels in between waiting for books to be released. I visit my library once a week. However... I still BUY books. I have book cases full of them. Why? Because when you're stuck on a sunday afternoon for something you can go to that bookcase and just look and pick out something that you think you'll enjoy reading today. You can't do that with a PDF. Ebooks don't have the same quality about them. Music and books have an emotive component to them that doesn't exist in their digital form.

... It's nice to hear from someone with a brain for once!

Now where is the Paris Hilton angle? :)

I'd have to debate this as fact for the entire music industry. It might be true for major artists but what about dance music and independent artists? There are very few dance acts that actually play live, and to the same extent sell merchandise. Gigs aren't that profitable (the door price) unless they can sell merchandise which includes sale of CD's.

The issue is that both traditional and digital media sales have been too expensive, and that the artists receives a rather small slice of the pie. The chances are that the latest Radiohead album will make the band enough money because they have very loyal fans.

The record company is an outdated concept. I worked as a roadie for years and the idea bands played gigs for little to no money is a myth. In a small venue 8 - 10,000 seats could generate vast monies from t-shirt sales alone. Say you played a gig with an attendance of 10,000 people, if only 10% of those stumped up for the latest tour shirt (which averages £20 - £25 these days) then that's a whopping £20 - £25K alone (minus manufacturing etc) and that's just basing it on a mere 10%. The actual figure is closer to 17% - 20%. Plus you have the ticket fee on top which ranges anywhere from £16.00 - £40.00 (or £100+ if you are Led Zeppelin). The profits are huge and will offset the price of giving away your music for free.

I think it was Limp Bizkit who first started to offer their music free for download and it was a major step forward and the first nail in the coffin of the parasitic record companies. Unfortunately, the big-wigs are needed to promote and develop up and coming acts who couldn't afford to give away their music or sell out venues. They are a necessary evil sadly but it shouldn't be too long before they renew their strategy of suing 'the little people' to make a statement.

"That's also true in music," says Leonhard. "The real money is not in the CDs. It's in the gigs, the merchandising, the sponsorships."

I have heard this argument before. Surely the world of live music, concert promoters, merchandisers etc is just as restrictive and shady as the world of record company executives. I can understand why the Rolling Stones or Radiohead might turn coin from tours - they have expensive lawyers - but the live circuit is sewn up otherwise. Isn't this just a case of jumping out of the frying pan into the fire? It seems redundant to mention merchandising as a separate revenue stream, because CDs are just merchandising; the same forces that make CDs unecomical affects merchandising as well; why pay £1.50 for an official Motorhead coffee mug when you could buy a knock-off for 50p?

As a member of a band I can fully understand this. Revenue from cd sales is negligable, your percentage is low to begin with after everything has been taken into consideration, and then the money you receive from the album is based on wholesale price, not retail, which is pittifully low.

With merchandise you buy it at perhaps £2-4 a t shirt, then depending whether the venue is going to take a cut off this or not, you're starting to see the return for your efforts.

Unless you are massive, the money you receive for doing the show doesn't leave you with much at all. Transport (Sometimes £600 a day), technicians, accomodation then whatever fees your label/management decide to take cuts this right down. Then you split the rest between your band. A lot of bands rely on merch sales to just feed themselves on a tour. Reasonably well establish bands sometimes have to tour up to 9 months a year to enjoy a normal life off the road.

There are very few people within the industry who are in it for the music, everyone is like a fly around shit when they can smell the money.

The porn industry is still as massive cash cow and I'm sure piracy is just as, if not more, rampant than the music industry.

I realize that many people have a chip on their shoulder because the evil empire of music won this case.

Lets be clear and honest. If I or for the most part any other impartial person was on that jury, we would have come to the same conclusion as to her guilt. Keep in mind, the judge told the jurors, just by making the music available on Kazaa she was guilty of copyright infringement even if there was no evidence of anyone uploading the music from her pc.

(That evidence would have been found on her PC were it not for the mysterious loss of her hard drive.) SHE SHOULD HAVE SETTLED!

But how does that case have anything to do with this "new" concept of a "pricing model"?

From a journalistic perspective, its a pretty weak way to get people to read the article.

Having said this, the concept of giving something away for free so that you can make money from consulting or similar downstream effort is nothing new.

Stallman anyone? ;-)

As to the success of RadioHead's pricing model? I don't know. Does it really cost 45p to cover the cost of a sales transaction? One would expect it to be much less. (maybe 25p or 3% of the sale, whichever is greater?)

Also, by skipping the "middleman" you're creating a new middleman. Are the artists or their record label going to create and maintain the websites and the associated risks or are they going to farm it out?

And what happens when you lower the barrier to entry?

(I don't know the answer to that one. I'm going to assume that the free markets will work that one out.)

i agree with him

The "author" of this piece is someone who reminds me of the problems of zero barrier to entry in any industry: that anyone who thinks they have something to say will say it loudly and self-publish, regardless of any real thinking they have done or academic credentials. If they can sell "consulting" on the back side of it, so much the better...

Does he have a SINGLE piece of economic modelling or empirical data to back his assertions? No, not that he has presented. Not, I dare say, that he can present.

Every single real piece of academic research that I have seen (i.e., real economic modelling and studies done by Wharton Shool of Business) indicates that the rise of piracy leads to a terrible musical landscape, where a handful of "supergroups" dominate from their tour revenue, and everyone else starves, with no one to push and promote smaller bands just starting out, or get them competent producers and marketers, or support their tours. And it stays that way, with thousands of no-name bands providing one-hit wonders and then submersing back into obscurity, never able to get support to get better and known enough to become a supergroup.

Like it or not, record companies provide a real function to beginning musicians, and to the music industry as a whole: they back ones just starting out with investments, and they guarantee a "middle-class" of musicians that are being promoted from smaller talent to become supergroups. They need that model, and frankly musicians need that model - otherwise the jump from nothing to supergroup is nearly insurrmountable (except engineered bands, but again, no recording industry, no designed-for-pop bands...ok, maybe piracy does have an upside).

Would Radiohead be in the position they are in without years of investment and expertise in marketing from their record label? Probably not...so in effect, they are pulling the ladder up after themselves, saying that we have made it, now it is time to dis-assemble the industry and model that helped market us and promote us. Hardly something to say "Wow...good show!" about...rather selfish really.

If I wanted a scratchy, poorly-encoded (64kbit/s ought to be enough for everyone, right ?), DRM-encumbered piece of music I can only play on a few devices or a certain number of times, then yes, it's the future. Rejoice.

If, on the other hand, I might like to own a piece of physical media that I can encode at my own standards, and for whatever portable device or format I might prefer, (or listen on a quaint invention called "music player" -- whether that be a CD player or any other similar device; battery operated "portable" devices (PARTICULARLY those starting with "i" and in white) need not apply) then perhaps a solid rethink is in order.

The current approach sucks, that's true - but it seems that the Pyrrhic victory is not just for the RIAA - it's for the "new age" of music distruibution as a whole ...

Ken Hagan: If you want a glimpse of the future of publishing, consider the fate of the most recent Harry Potter -- photographed within hours of release, almost certainly OCR-ed by now, and probably available in a nicely marked-up format somewhere on the internet.

This is a bit pessimistic: I saw torrent files containing (presumably) OCRd RTF versions of book 6 after about 12 hours of release. At 14:00 UK time. there were some that were already 2 hours old. I didn't wait out all night though (again!), mine was delivered in the post at about 9am.

I assume that a bunch of many people were allocated a few pages each, and the results were all centrally compiled, checked etc.

Just to clear something up, you are able to enter $0.00 for the digital download and pay exactly $0, no credit card fees. I just checked again and this is still the case.

http://www.negativland.com/albini.html

...getting "signed" would lead to copious amounts of PR. But given the kind of PR that the RIAA members are now generating, just who in their right mind would want to sign with any of them now? I pity those who already have and are now locked in-- only to find themselves servile to the writhing death throes of their Luddite overlords.

I have a howto in pdf form entitled Dont_Panic_v1.5.2 on my desktop that I got from nwvault.ign.com it is 132 pages long. If it was in book form I would probably buy it for the convience of always having it available to me.

I think 45p is pretty reasonable for a CC transaction considering what other organisations charge these days - try buying a ticket on trainline.co.uk these days and they will charge a couple a quid.

Also, doesn't it feel like a little bit of marketing by applying a fixed CC charge? Who is going to pay 1p and 45 times that in CC fee? Isn't it quite likely that people are going to think "Hmm, if the CC charge is 45p then I should, at least, bung a couple of quid at the artist"?

As for the concept that Radiohead have put forward, it will probably work for them but what about the start-ups/little guys? I think it was suggested above that a central repository of free music that includes editorials and listener feedback to guide searchers could be a winner... if done right of course (however that may be).

PS Gumby? All I can imaging is wellies, braces and hanky on head... sorry

Although I agree with you to an extent, there's a whole army of indie bands that have thrived in recent years due to the internet & word of mouth, they've not needed a big record label or an expensive marketing campaign to be successful, sure you might not have a repeat of the super groups & mega album sales of the 80's but with direct sales and marketing, a larger percentage of the royalties goes to the makers of the music and without all the overheads it's far cheaper for the consumer. The days are numbered for the big labels & new bands are no longer that interested in getting signed to one.

I've heard the "futuristic" music on Buck Rogers in the 25th Century and to be honest I wasn't impressed (though I would dance to it if there was a chance of getting it on with Wilma Dearing)

"This is a bit pessimistic: I saw torrent files containing (presumably) OCRd RTF versions of book 6 after about 12 hours of release. At 14:00 UK time. there were some that were already 2 hours old. I didn't wait out all night though (again!), mine was delivered in the post at about 9am."

Hang on, Peter, everyone KNOWS that piracy costs the industry trillions each year, so if it HAD been pirated, it MUST have become unprofitable! To have it happen otherwise is unthinkable!

"The RIAA only cares about what is good for the record industry"

I'd modify that slightly: "The RIAA only cares about what is good for RIAA executives."

They don't care about artists, they don't care about retailers, they don't even care about production crew.

"Every single real piece of academic research that I have seen (i.e., real economic modelling and studies done by Wharton School of Business) indicates that the rise of piracy leads to a terrible musical landscape."

Really? Type "music piracy" into the search box on the knowledge@wharton site. These two articles are quite old, but they just happen to be the ones that have the best summary of their position.

http://knowledge.wharton.upenn.edu/article.cfm?articleid=635

http://knowledge.wharton.upenn.edu/article.cfm?articleid=863

a) The "buzz" from file sharing benefits the music business by more than they lose, according to Wharton's model.

b) The only research suggesting the opposite was commissioned by the RIAA.

c) "innovation always drives the prices of yesterday’s technology into the dirt. The way to respond to the demise of the commercial CD is not to sue Internet-users. It is to figure out new ways to make money on music."

"It doesn't take a genius to spot the flaws in the design; human nature being what it is, if people don't have to pay for anything, they won't. The idea that people will voluntarily donate to a tip jar is spectacularly naive."

There's just one problem with your argument: people do donate to tip jars. That's why so many delis and coffee shops have them.

There's a company that makes strategy guides for video games, and some of their guides are available for free in PDF format, with the belief that if you really like it, you'll end up buying it for convenience. I downloaded it, saw how useful it was, and bought not only that one, but two others by the same company.

Sure, some people are going to take whatever they can and pay nothing, but just because you'll do it doesn't mean we all will.

How about a 'fairtrade' label for record companies that provide more than a minimum royalty for their performers? I buy CD's but only when they are a reasonable price (everything else I get from eMusic). The official excuse for CD prices years ago was that they were costly to produce, but then the old ratchet principle kicked in and they never came down, even though they now cost a few pence. I'd pay a reasonable amount if I knew that the artist was getting more than the suits.

A good, well-written article that lays out the author's ideas clearly (whether I agree with those ideas or not is another matter).

The RIAA cannot easily change their business model and are reacting from fear of their market share shrinking to the point where that business model is unsustainable. Unfortunately, this particular reaction (suing people who ahre music) is short-termism of the worst order. Sure, the RIAA can claw back a (pathetically) few dollars but, in doing so, they injure an already wounded image.

While contributors to El Reg (myself included) tend to focus on alternate (to CD's) music sources, let's not forget that there is an existing and viable CD-based market for music out there. (Many millions of music buyers cannot or do not care to get theirs over the 'net). Is that market the right size or shape to sustain the current industry model? I doubt it. Will a changed industry model mean a changed market for those who make music? Probably.

All markets change. Some mean the disappearance of a traditional industry and some mean that an industry must reinvent itself to stay viable. I think that latter is the case for the music industry and I look forward to seeing (and hearing) how it looks ten years from now.

"The real money is not in the CDs. It's in the gigs, the merchandising, the sponsorships."

He's almost on the money, but not quite.

If I spend all my money on CDs and whatnot, then I'm gonna end up horribly disappointed with more than half of them (ever downloaded an album, listened to it, and then thought "thank god i didn't pay for that"?), plus, I'm not going to be able to pay for the tickets to see the bands that I do feel are excellent, and would be worthwhile seeing live.

I know this has been said a million zillion times, but why make it all about the money? Fans want to see their favourite bands on stage, and rocking out. The atmophere is infintely better than being at home in your living room.

True, there won't be as much money in just gigging alone, but £10 for a new CD is way over the top anyway. I want to be able to listen to a band, if they're good, I'll go see them live, and maybe buy a T-shirt while I'm at the gig as well. I might even fork out for a CD, which I then want to rip to my PC, and listen to through there

As another point, who wants CDs anyway? I'd much rather have a harddisk full of my music, so I stick 10 albums on a playlist, hit randomise, and then leave it, and I've a full night of music with no pissing about changing CDs when it runs out. CDs take up too much room and get broken to easily too.

Also, none of my mates have PCs, but they want backups of their music, and the logical place to do it is my PC, as they're always at my house listening to it and chilling out. Is that illegal?

Does anyone else remember the assorted debates going on BEFORE Napster? What was everyone talking about? The cookie cutter CRAP being promoted by the assorted labels.

So I, for one, find this whole "but without the labels to promote new groups, what is going to happen???" debate amusing to say the least. They were promoting crap before downloads, they are promoting it now. I think it might be nice to hear what music could sound like when it hasn't been filtered through the ears of some damned been label promoter who's only real interest is the bottom line of his spreadsheet.

What the blazes is so _wrong_ about paying for the damned _music_?

Is this the future for art? For all craftsmanship? To force the artisans to dance for their public as if we had an inalienable right to their works? Is this what it takes to put bread on the table? Is this why the public doesn't really mind paparazzi hounding the successful until they're driven to drink and drugs?

Sure, there are the Rolling Stones and the Madonnas and the Tom Joneses out there who have been very successful and made plenty of money, but that's true of _all_ industries. The construction industry has its McAlpines and John Laings, just as the IT industry has its Microsofts, Oracles and SAPs. This is _normal_.

Not every artist wants to get up on a stage. Some songsmiths cannot sing, yet write amazing music. And you try taking an entire _orchestra_ on a world tour and see how much profit you make.

There is no one-size-fits-all "solution". Leonhard's "solution" is only applicable to a subset of the music industry, not to all of it. I know plenty of (published) musicians and songwriters who have never, ever stood on a stage or performed in a gig. Why should they have to? It's not like every musician loves writing music because they love performing. Most musicians love writing music because they love *writing music*. Period.

Andrew Orlowski has written a very pro-RIAA follow up to this article, but neglected to have the balls to allow comments on it.

Shame on you.

@speculative, I think thepiratebay.org is an excellent example of the tipjar working. A lot of their revenue comes from donations and sales of t-shirts etc. Most advertisers won't touch them with a barge-pole.

I was considering starting a website for just that purpose. Tip your favourite artists. That way the artist gets 99% of any contribution a fan wants to give and my site gets 1% for making it possible. I could provide charts based on what people were tipping the most and providing the site was popular enough, could showcase new bands. I wouldn't even get involved in hosting the music, ala MySpace. Music distribution is taking care of itself.

@Ian Michael Gumby

I agree that any impartial juror would have found for the defendant, because that is the law. Maybe the law needs to change. If the RIAA were in the dock, I'm sure any impartial person could find them guilty on several charges too!

@Pffft

The reason most online music is encoded at low bitrates, is because when it all started, most people had slow internet connections. The music industry should have struck then, and signed an all-you-can-eat deal with the ISPs. They should have seen what was coming, and realised that if they provided high quality digital music on a subscription based model, they would have buried the pirates, instead they made them martyrs.

@Robert Hill

"a handful of "supergroups" dominate from their tour revenue, and everyone else starves, with no one to push and promote smaller bands just starting out, or get them competent producers and marketers, or support their tours. And it stays that way, with thousands of no-name bands providing one-hit wonders and then submersing back into obscurity, never able to get support to get better and known enough to become a supergroup."

That is the status quo and has been for a long time (Stock, Aiken and Waterman) and cannot be attributed to piracy. That is unless you are refering to the music industry ;p. Matthew, I concur!

Talent is successful by its own merit.

Why is it that when the RIAA DO get a case to court, and win; the details (you know, those pesky ones that show guilt) are not even considered by columnists such as Andrew Orlandski?

I mean, get over yourself dude.

Using your own common sense, you owe me a lot of money at this point, with all my content you've stolen**. Need an address for the check to be sent to?

**yes, I'm being sarcastic.

which is why they're so fickle, and will discard the latest untalented, overhyped star for the next one in a heartbeat. It's no wonder most artists can't make a living in the music "industry"--the vast majority of the "work" it "produces" is just fodder in the industry's shotgun approach of finding the few artists they can milk for more than play money. The rest are discarded to be largely forgotten.

This is happening in a situation where popular music is completely free, whether or not people download it. Everywhere I go, whether it's an office, mall, vehicle, or city street, I'm bombarded by a constant stream of music, whether I like it or not. In many of these places I would pay for them to switch the music off, it's so annoying.

As Muzak and other music services become more and more narrowcasted, increasingly the piped-in music where I go is starting to overlap more and more with my mp3 collection at home, to the point where collecting music myself is becoming superfluous.

Locally, I helped establish a low-power community FM station. What do most of the airshifters play on that station? Commercial CD's that one can hear anyway.

How is this complete saturation with commercial music good for anyone, regardless of who pays for producing and distributing the music?

No one listens to the music--it's just on in the background. If you're an artist, your music is playing second fiddle to the Kmart announcer who interrupts it to remind shoppers of this week's specials. If you're a listener who wants to listen to the music, you can't, because other people are talking and making noise while engaging in their primary activity. And if you go home and listen to the music in the comfort of your own home you'll increasingly recognize it as the soundtrack to your local coffeeshop or supermarket.

What people seem to have forgotten is how to *make* music. The glut of repetitive, commodified tracks has replaced singing together and learning to play instruments for its own sake rather than as a business model for becoming a content provider.

My coat is currently at the cleaners.

@mycho. spot on. I would add "the RIAA cares about what is good for RIAA executives and their COCAINE lifetstyles " !

Music performance isn't a static 'thing', and that is what I think the RIAA etc. have lost sight of.

I can remember (just) when a record was a poor mans substitute for a live performance that he could never hope to afford. Somehow the industry managed to turn this on it's head.

Now, however, technology enables any talented individual to create very pleasing works that actually can't be performed live.

So in the process of seemingly reinforcing the industry's stance this technology is also whipping the rug from under its feet.

The article states that its 45p for the cc transaction fee.

My comment is that 45p for a cc transaction is a bit steep for the cc houses to charge for an on-line purchase.

Since I'm in the states, 45p ~= $1.25 (off the top of my head)

Here in the states, a retailer is charged a minimal fee for a credit card transaction or 2.5 - 3% of the sale, whichever is greater.

That minimal charge is something like .25 (USD).

This shouldn't be confused with a "service fee". Online ticketing for movies charge a service fee of $1.00 per ticket. Its a convenience fee of not having to wait in line to buy tickets...

To call the .45p a cc transaction fee is a bit dishonest if the 45p actually includes other things...

> I'd modify that slightly: "The RIAA only cares about what is

> good for RIAA executives."

So exactly like every other executive in every other business in the world then... Ge real people.

one business model will not work for the entire industry. a different model applies to Garth Brooks vs Kevin Eubanks vs the Boston Philharmonic vs The Unknown Garage Band.

mp3 is lossy; it is fine for times when the music competes with ambient noise, eg jogging down an urban street. compact discs, vinyl records, or even magnetic tape are better for listening in a relatively quiet environment, eg relaxing at home. broadcasts, eg radio, use these recordings, and so are of slightly less quality. none of these compares in sound quality to a live performance in a venue with appropriate acoustic design.

people will prefer to pay for music they like in the format they want. profits from merchandise is a separate, but linked, issue. it depends on offering the specific items (apparel, coffee mug, funny hat, etc) the audience want, and the size and disposable income of that audience.

please do not limit your discussion to albums and t-shirts from The Rolling Stones.

And the point is? There are any number of bands that sign bad contracts and don't know how to budget their money or limit their expenses, THE SAME AS ANY OTHER BUSINESS. Any number of start-up retail stores, home businesses, restaurants...all sign contracts and incur expenses that are mistakes. I have had friends that have started their own businesses and failed, same story. Somehow, we believe that bands should be special, and not allowed to make business mistakes like the guy that runs the 7-11 down the street? Don't be ridiculous.

NO ONE forces any band to sign a contract - any band can produce their own videos with a handycam, put it on YouTube, tour locally, and produce an album with ProTools in a small studio. Any band can put up a website and put their MP3/Oggs/etc. up for distribution or even sale. No one forces them to try for anything larger. If bands don't LIKE the music industry, let them opt out.

But destroying intellectual property rights and saying that the music industry doesn't have a right to exist because it wants to charge you for what you would rather get free is basically theft. It may be theft by millions, but that still doesn't make it proper, correct, or even good for society as a whole. It may not be even good for media - we are quite used to hearing well produced, well funded music and watching movies that have hundreds of millions in production costs. Hard to believe that we will have the same level of quailty when it is a bunch of people doing it for low money and with little training (at least on average - you will always get SOMETHING of value as part of the normal curve of probability).

Let's get it clear - this anti-RIAA war not about a bunch of people fighting for the musicians - musicians can choose to opt-in to the industry or opt-out for themselves. This is about a bunch of people wanting to impinge OTHER'S rights, by ripping off their intellctual property under the guise of "fairness". It's a battle of the lazy non-producers of intellectual capital attempting to take, by fiat, someone else's work, by claiming that technology lets them do it, so it SHOULD be legal. Bollocks, I say...and from what I have seen of the economics, it will only hurt most musicians in the long-term.

@Ian Michael Gumby

45p ~= 91c Sterling is strong, but not that strong ;p

You guys get iTunes for 99c and we get them for 99p(AFAIK), how's that for steep!

My bank manager wouldn't insist on having 99% of my income nor would he ever suggest it.

My friend and his band recently produced their own album on a dated pc in an old mini-cab office. They signed to Necessary/Warner on the strength of that album and have since produced a second album, both of which are doing OK.

I have no idea what deal they got, I hope my friend can at least pay his mortgage.

Quality, does not stem from having the financial clout of the record industry, quality comes from having a keen ear for music and a passion for making music. It's a shame you find it hard to believe that people can't make good music without a whole bunch of money...how sad.

Money buys promotion not good music.

Your friend and his band produced their own album and signed a deal with Warner, and is doing OK? FANTASTIC!!! I am very happy to hear that, because the essence of my post is that people can CHOOSE to do that.

Now that your friend has signed, ask him this: does he want people to pay him for his album, or does he want people to copy it freely and not pay him for it? He has entered into an agreement with Warner that they will market and promote and assist with the album, and that he will get some percentage of the resulting sales. Does he want that percentage to be X% of something, or X% of nearly nothing?

For reference, the RIAA is defending musicians by saying that it should be X% of something, and they will take people to court that will steal music (such as your friend's) by sharing it without compensating him.

As for the cost vs. quality debate about music, I did indeed say there would still be _some_high quality stuff, just because there is always a probability curve of how good stuff is. I would also be shocked to hear that your friend produced that second album in that old mini-cab office...

Unfortunately the "Wharton model" that you claimed to quote in your first post actually says that b166er's friends would end up with more than they would lose if their record company allowed those that want to share the album to do so, and that no good ever came of suing your customers or competitors in defence of intellectual property.

Wharton also points to bottled water as an example of a product that competes successfully with free. Instead of giving publicity to p2p networks by suing them and their customers the music business would be better to concentrate on a) making a compelling product b) marketing it well c) selling it in packages that people find easy and convenient and at an affordable price.

"Affordable price" in the iPod era means being able to fill up 40Gb without taking out a mortgage. You can't pretend that technology doesn't exist.

Disintermediation isn't happening and won't happen. Reintermediation is happening and will continue to happen. What successful producers need to do now and going forward is forge relationships that can quickly get their products in front of purchasers, but which can also be broken when they are no longer getting products in front of customers. Do most bands with recording contracts get airplay? No. But can any band without a recording contract get airplay? Unlikely.

The biggest mistake bands or other creative people can make in the world of reintermediation is thinking that it's better to get 100% of nothing than 50% (or 15%) of a lot. Bottom line it and then decide how you're gonna deal.

Ian Michael Gumby said:

"Online ticketing for movies charge a service fee of $1.00 per ticket. Its a convenience fee of not having to wait in line to buy tickets..."

Actually if you ever tried it, you'd find you STILL have to wait in line to buy your tickets. The only difference is you pay at the box office with your Fandango receipt instead of with cash. All you get for the extra buck is a reservation, and a chance to lose your money if you can't make it. Some convenience.

My friends and I had a little joke about that. I said, tell you what I'll give him a tenner and then I'll download it. At least that way I know he gets all of the money! In reality, he damn well owes me a signed copy for putting up with his learning to play guitar for years as we grew up ;p

They actually did produce the second album in the old mini-cab office, although I understand it had a bit of a dusting first :p

I agree with you entirely that artists should be recompensed for their work, everyone is entitled to make a living.

I'm trying to think of a good analogy here, but can't.

I don't think there are any other examples of the atrocious deals artists get.

There are two parts to this: the artist creates the work, and the industry promote it, horses for courses and it seems quite symbiotic. However usually, the artist is woefully under-rewarded for their efforts, while the industry seems to be highly over-rewarded for their efforts. So, not so much symbiotic as parasitic?

Yes artists have a choice, thankfully now, even more of a choice and the scene is changing. Modern promoters seem to be striking much fairer deals.

Someone once pointed out, that when you pick up a paperback, inside it says Copyright:Name of Author, whereas, when you pick up a CD, inside it says Copyright:Name of Label.

And again you will reply, that artists have a choice.

I just think that the choice between 'making it' and being paid disproportionately to your efforts, versus not making it and depriving us of your art, sucks. We can't all be Oasis.

Traditionally those were your options. Now, thanks to the much needed shake-up, we should see many more talented bands coming to the fore. Promotion used to be a very expensive game. Look around you now, adverts are everywhere, the internet runs on ads. Example: I recently saw an ad on MTV for someones MySpace page, I forget the name, so it didn't work out for them (I don't watch MTV very often, maybe there were more), but it's a start.

It's been interesting to analyse how the industry works, through watching my friends band being promoted; appear on this show, appear on that show, have this much airtime on this, this and that radio station, do some interviews with MTV, sign some albums at tower records etc. Yes, all this costs money, but it's very much an I scratch your back kinda thing: the radio stations want listeners, so they need songs, the industry wants to promote songs so they need the radio stations, you get the picture. I would say the most expensive part of promoting a new band, would be the first few tours, something which many unsigned bands manage to do for themselves. (admittedly, usually at much smaller venues, but that is in part due to less advertising promotion)

It's almost getting to the point where a band could completely promote itself, which is great. Maybe they can then go to the bank manager for a 'promotion loan' to launch their business and get a favourable deal into the bargain!

So, yes, the RIAA are defending my friends x% of something, but at the same time defending THEIR X% of something which turns out to be a much larger X than my friends.

Actually, the "Wharton model" that I am using was one developed by a team of Econ PHds in conjunction with two of the professors, that was presented to myself and others at a invite-only econ symposium of business leaders at Wharton in 2002. I am unsure if it has ever been published, so I am unsure how you claim to know so much about it. (I was there because my company's Strategy practice leader could not attend, so I went as the next best.).

The actual model did NOT focus so much on the individual incomes of various types of bands (although it did typify them by positions in the income stream, such as supergroups, etc.), but rather what the overall music archology would look like. It made no reference whatsoever to lawsuits or protection of intellectual capital, as these were Econ studies. So I find your conclussions curious to say the least, unsupportable quite possibly. If you have a link to a Wharton study that you think is relevant, I would love to see it.

As to suing your customers, the RIAA is not suing customers - they are suing NON-customers. If I go to Wal-Mart, and steal off the shelf, or even just change price tags on a $100 item and make it $10, I am not a "customer" of Wal-Mart's, even if I pay the $10 as checkout. I would be a thief, nothing more, nothing less. My brother, my dad, my best friend - they may all be customers of Wal-Mart's, and my prosecution for shoplifting would do nothing to change their relationship with Wal-Mart as customers. But I would never be considered a "customer" of Wal-Mart, and in some types of stores would be banned from the premises (jewelery stores, casinos, etc.) for life for theft or cheating.

I think that you and I are very nearly on the same page: I have always maintained that I support alternative distribution models (i.e., web downloads, etc.) for artists that prefer to go that route. I had not thought through that implied competition could actually act as a moderator to the music industry's worst terms and conditions. If that is a side-effect (and econ theory says it SHOULD be), then I am happy for all that benefit. Thanks for helping me see that clearly.

My point is that this can happen without ANY weakening of intellectual property laws or practices, and I think that you agree with this too. Artists need to get paid - as your friend's case clearly shows, some are responsible adults with houses to pay for.

As for self-promotion, I believe that some acts will go down that route entirely someday...but only if they have the native talent for it. Most don't, and will need professional help of some kind. That's fine, you should be able to buy any kind of help that you need in business - and labels will be around to provide those services for a long, long time...although perhaps under a bit better terms than they may have given in the past.

N.B. - a good friend of mine was in a fairly well-known UK pop act in the 90s (Top of the Pops a few times, Wembley, etc.), so I too have some insight as to the insidious games played. Althought with this act, it wasn't the record companies that ripped the band off by nefarious practices, it was the frontman... :-(

>"Affordable price" in the iPod era means being able to fill up 40Gb without taking out a mortgage. You can't pretend that technology doesn't exist.<

The size of the harddrive on a player device has absolutely no bearing to what the music is worth, how much it cost to produce, or how much the creator should be paid. That is like saying I should pay less per item at Wal-mart if I drive a bigger SUV to go shopping, 'cause I need to fill it up and it can hold more than a smaller car, but I only have so much money in my account. And what will you say the proper price of a song should be when a 1.8" drive in an iPod can hold a full Terabyte? Because the price/size of storage is falling all the time, but music files have pretty much maxed out in size each, making that a foolish metric to use to value someone's productive work.

The one metric that DOES make sense is how much are you willing to pay to be entertained per minute? And how much do you value repeated listenings? Apparently, people value it enough to devote a fair amount of time and effort to copy it illegaly in an organized fashion...

As for pretending technology doesn't exist, I built my first PC in 1981, along with programming in 5 assembler languages and about 15 higher-level languages at various times in my life. I still build my PCs by hand for the fun of it...my street cred on tech is hardly an issue. It's just that I understand that intellectual property laws also exist for a reason, and I defend those reasons.

I'll admit I've only used the online purchase a couple of times to see a couple of movies with the wife. There's one theater in Chicago that's really comfortable and great to watch films.

On those occasions, you go to a different desk, show your id and the credit card you used online and you got your tickets.

The line was much shorter and you were guaranteed a seat. Those waiting in line might get in, or they might end up at the bar down the street.

So that's why you pay a convenience fee.

For all of you in the UK, your 99p will go a lot further in the US... ;-)

Even the Canadians are coming south for the winter.

Now that's a different story! The frontman of my friends band did much better then he on the first album, I don't know about the second.

As you say, many bands will still need professional management and will be unwilling/unable to do that themselves, but hopefully with the market opening up, they will still get a fairer deal.

I hope your friend paid his mortgage!

Our 99p would go a lot further in your iTunes store, than ours!

I quite like to download a tune here and there simply because there is damn little way to become acquainted with a variety of artists—at least not from the highly formatted radio stations. But, I do not care for the usually low quality MP3s. I find an album I want to listen to, and I buy the CD. I love online/free books for the same reason. Especially with high $$ technical/reference/text books, I want a dead tree. Hell, I've bought the real thing at $50–$80 when I already had the full text on my hard drive.

For the musicians point of view, see http://janisian.com/article-internet_debacle.html and consider the Grateful Dead's policy of encouraging people to record their concerts and share those recordings with others.

cheers,

gary

Check out Baen.com for their free library. They have been saying it for years and putting their money where their mouth is.

Giving away some books has been good advertising for others. They don't have a single book that doesn't at least have a few free chapters available. Which means you know whether or not the book is going to hold your interest before you bother buying it.

Been saying this for years. The record companies offer nothing to the artists in the internet age.

Read up on 2 artists.

Aimee Allen - this is an artist who allowed her entire album to be freely available on the internet after getting screwed over by her record label. The title track was used as the theme tune for a moderately (read, it survived long enough to get the first season produced and has a cult following) TV series. When asked when th ealbum would be released the answer was "the market isn't ready yet". At this point the album was leaked onto the internet and the label dropped her completely when it was taken over by a bigger label. The market was there, the label just didn't want to see it.

Poe - a singer/songwriter who had to sue her own record label when they refused to re-release her music. Turned out the label had a get-out clause in her contract that pretty much killed her music career, she was unable to write or perform as herself for 7 years. In an industry that can destroy a career by being "off the shelf" for 12 months 7 years is a very long time to be unable to create music.

The biggest problem with the music industry is the labels who will do anything to control music. Instead of promoting and distributing they want to own, package and rebrand. Bands are told what to wear, how to look, even where to eat and shop.

Take into account shows like pop idol and x-factor. The winner gets a nice shiny contract, however it has some very big strings attached. The winner must do exactly what the label says, and they get paid next to nothing in real terms for it.

Darius actually made about 10 times more money personally when his record was released than the winner of x-factor that year, despite selling fewer records. Why? He was able to write and sing his own songs.

Ian Gumby, you're right that as per the law, she was guilty. However, in the US there are several things you deliberately (?) forgot

1) jury nullification. a la rosa parks, who BROKE THE LAW the juries can decide that the law was wrong

2) it is unconstitutional when the fine is so much more than the infraction

3) the judge made up law on the spot: "making available" is NOT copyright controlled action

If the fine had been $2000 it would have bee payable (barely) and stiff enough to deter. 11000x that and it is terrorism.

...and focus on something that someone said earlier:

>The one metric that DOES make sense is how much are you willing to pay to be entertained per minute?

The number of people in the world (as a % of population) who are capable of making decent music is staying pretty constant. New technology may make it more accessible, but we're not on some exponential curve whereby in twenty years time everyone on the planet will be Prince (or whomever).

The amount of money that people are prepared to spend on listening to decent music is staying pretty constant. Actually the total entertainment spending is going up as standards of living generally rise, but you could argue that there are increasing numbers of things people want to spend their spare cash on, so lets say for the sake of argument that this figure is just about keeping pace with... ooh, I don't know... the number from the first paragraph above?

So we have no shortage of money available to pay for music, and no runaway increase in the amount of music that people actually want to listen to. What we do have is a breakdown in the way that money has traditionally changed hands (in relatively large chunks, for relatively small amounts of music that were then felt to be 'owned' in a traditional, if-I-have-it-then-you-don't kind of way). So what we need is simply a new way of collecting the money that people are prepared to pay and dividing it up between the people who make worthwhile music.

Tip jars won't work, because people only put 10% of the cost of the meal into the tip jar. (Yes, I know there are pay-what-you-like restaurants, I've been to them; they're novelties and they only work because people know what the 'fair' price is everywhere else.)

The answer, as frequently explained on The Register, is compulsory licencing: collected from everyone, and allocated according to measured downloads/plays (which the consumers have no interest in cheating, because it doesn't save them any money). Can anyone make this work? I dunno, but it is the answer...

Please don't mistake me for one claiming you have any kind of balls deficiency but I was sorry to see the lack of a comments section on that article as well.

Your call for more perspective on filesharing could have prompted some saner people to come out of the woodwork. I'm sure many people would have misinterpreted your position, but surely that's inevitable regardless of the article?

As you say, you don't even have to read the comments, in which case what was the rationale? Bandwidth considerations from all the nutters flaming what they think you said?

Oh well, just seems a shame to stop such a potentially interesting Reg discussion before it started.

Type "music piracy" into the search box on the knowledge@wharton site. These are also from 2002/3, so maybe different Wharton professors have different views, or they say one thing in public and something else to insiders.

http://knowledge.wharton.upenn.edu/article.cfm?articleid=635

http://knowledge.wharton.upenn.edu/article.cfm?articleid=863

The second article is particularly relevant to Guy's original piece. The issue isn't whether the people who create, record and market music should get paid, it's whether the current tactics of the major labels are the best way to ensure their business survives. Some people don't think they are.

Hi Guy

Just read your "The RIAA will come to regret its court win" article.

1. Please put me out of my misery.......... what was to be its correct title?

2. When will you publish your "pyrrhic victory" article?