Feeds

Music Biz: The Man is still The Man, man

An insider's extraordinary tale

  • alert
  • submit to reddit

Top three mobile application threats

A long weekend is traditional time for gentlemen to retire to the garden shed. Even if you're not planning to do so yourself, please do spare half an hour to read what I think might be the best analysis of the music business I've read this year - or, I think, any year. It's a quite magnificent, panoramic view of the landscape with a very provocative conclusion.

It's from a talk by David Lowery, formerly of Camper Van Beethoven and Cracker, a musician, songwriter, producer and a man who knows quants, programming and is a veteran radio ham. Lowery sued two of the three major record companies he signed to in his music career; this is a guy who has been around the block a few times. As he says, he pioneered "freemium" models (encouraging fans to distribute tapes) and social media in the 1990s - way before New Media Gurus stumbled upon such ideas.

Lowery's argument is built on a mass of fascinating and detailed contemporary evidence. (Lowery's wife is a concert booker - and from his seat he has a good overview of musicians' earnings from all corners of the business.) Lowery compares the Old Man - the old titans of the record business - to the new titans - Amazon, Apple, and Google - and with a great deal of reluctance explains why the new gatekeepers leave artists and the creative community worse off than before.

His talk brings several interesting perspectives to the table that very rarely get an airing. One is that the digital music landscape is now fairly settled. We're used to thinking that the music economy is in a constant state of flux: but the gatekeepers are now well-established, he argues, and we need to address this.

"The genius of Steve Jobs was that he was not afraid to be greedy," he notes. But if profit is a reward for risk, he asks, what exactly is Apple risking to justify its 30 per cent cut on digital music, nine years on from the "risky" launch of iTunes?

Another good observation is that much hatred directed against the music economy on the web comes from failed musicians.

"I can only surmise that part of their anger seems tied to the hatred of the record companies that rejected them," he says. "Successful even marginally successful musicians are often viewed as some kind of traitors. A special kind of hatred is reserved for these apostates. The file-sharing cyber-locker industry has figured this out and purposely stokes stokes them with a faux populism. I would say it’s juvenile but it’s really more medieval."

Another good point is that the promise of disintermediating gatekeepers simply didn't work out. In the 1990s many artists hired webmasters, drawing an audience of fans, and potential revenue. But then came Facebook - and the traffic to artists' own websites disappeared. And there's not much we can do: "The internet has a tendency to monopoly because we are fucking lazy fat slobs."

And far from making the playing field fairer, benefits of digital economy simply have accrued to giant brands like Madonna and Radiohead, who built up their fans with record companies and can now cream off the profits.

The most radical proposition of all is that the much-criticised major record company model - of investing in many acts of whom only a few recoup any cash - was actually a benevolent form of wealth distribution. It required acts who did recoup handsomely subsidising bands like Lowery's own, who didn't fully recoup, but were still given a decent income.

He writes:

I know this is probably really confusing to you civilians. Am I really saying it’s better to be un-recouped as an artist? Yes it is. Quantitative finance geeks will see this as selling a series of juicy “covered calls”. Being un-recouped means you took in more money than you were due by contract. You took in more money than your sales warranted. And there was a sweet spot, being un-recouped but not too un-recouped. For instance I estimate that over my 15 year career at Virgin/EMi we took in advances and royalties equivalent to about 40% of our gross sales. In other words we had an effective royalty rate of 40%, despite the fact that by contract our rate was much lower).

Agree or not, you'll be a lot better informed after some working through his arguments. I can't commend it enough.

Related Link

'Meet The New Boss, Worse Than The Old Boss?' by David Lowery at The Trichordist

Build a business case: developing custom apps

More from The Register

next story
Stick a 4K in them: Super high-res TVs are DONE
4,000 pixels is niche now... Don't say we didn't warn you
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Amazon Reveals One Weird Trick: A Loss On Almost $20bn In Sales
Investors really hate it: Share price plunge as growth SLOWS in key AWS division
Bose says today is F*** With Dre Day: Beats sued in patent battle
Music gear giant seeks some of that sweet, sweet Apple pie
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
Too many IT conferences to cover? MICROSOFT to the RESCUE!
Yet more word of cuts emerges from Redmond
prev story

Whitepapers

Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Seven Steps to Software Security
Seven practical steps you can begin to take today to secure your applications and prevent the damages a successful cyber-attack can cause.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.