Original URL: http://www.theregister.co.uk/2012/10/25/battle_of_ideas_music_debate/

The Big Debate: OK gloomsters, how can the music biz be FIXED?

Technology is sinking to the occasion

By Andrew Orlowski

Posted in Media, 25th October 2012 09:19 GMT

Battle of Ideas 2012 I was on a panel at The Battle of Ideas conference on music at the weekend, and it went a bit beyond your usual digital music panel.

There was a good turnout - considering there were six concurrent panels, all of them interesting. Everyone got to make a six-minute opening question. Here's mine, and the highlights of the rest of the panel. I've included all the audience questions and the best answers – not all questions were answered – for a reason.

If you think the biggest problem with music is piracy, it isn't, and that becomes evident from the questions. Two of the panellists (Alan Miller and myself) address this in the closing remarks.

On the panel were Helienne Lindvall, singer-songwriter and musician, and author of the Behind The Music column for The Guardian, John Waters, author and columnist for The Irish Times, and Alan Miller, who set up the Truman Brewery. [Full biographies here]

Andrew Orlowski:

I'm going to try and deal with the big picture and one or two recent developments which even if you follow the culture industries, you might not be aware of.

I'd like to focus unapologetically on the economics. Why? Because one of our great human achievements is the economic independence of creators. It's taken us out of the feudal era. And although people will continue to create regardless, the freedom from state sponsorship and corporate sponsorship is a tremendous thing - not just for society but for the self-respect of the individuals as well.

I'm also going to focus on economics because a lot of the other arguments around music today are ways of avoiding the subject of economics, and I'll give you an example. The BBC had a series this summer about the internet, a 7-part series on Radio 4 [Digital Human] and it dealt with everything ... except one. The economics. It's being repeatedly currently, and the journalist [Aleks Krotoski] who wrote and presented it was plugging it on Clive Anderson's programme. And Anderson notices something's missing. And he goes: "Hang on. You've got newspapers closing, cultural industries that are far smaller than should be - that's what the internet really means too, isn't it?"

And her answer? Ah ... you've never heard anyone change the subject so quickly!

So there's this nice gravy train rolling along, which is talking about music industry and avoiding not fixing it. The phrase "business model" is a good example of this.

Now. What we overlook is that the creative and news industries today are market-based. There are exceptions, such as the opera and the BBC, but almost all are creative markets. We like it that way. It creates enormous richness, and diversity, and freedom.

Every technological revolution has given creators more freedom. Every technological revolution has created new markets for culture. This has always been a result of innovation based on a very strong underpinning of property rights. Creators are now being asked not to be richer, to give up economic freedoms, to give up economic freedoms, to give up their human rights.

There's something very wrong with this picture and I'll try and sum up why.

In every field of business money follows popularity. There's one place this isn't true. If you sell the most insurance policies, or the most cars, generally you'll have the most money too. Now, you can fuck up your business in many ways once you're there, but generally, money will follow popularity. On the internet, it doesn't.

And I don't see this as the end of the world but I see this is the most important problem that needs fixing. And it's not non-Euclidian time-space we're grappling with: to fix it, we look at what's worked before.

The problem I think is that there's a childlike, Utopian view that attaching permissions to digital objects, to things, "breaks the internet". It's a phrase you hear quite often. If we start to do this, then horrible things happen. Unicorns will die. We'll get thrown out of the Garden of Eden. But without property rights we don't have cultural markets. If we don't have property rights, if we can't attach permissions to digital things – I'm not talking about movies or newspaper articles – we don't have something else. We don't have any privacy, either.

I think one of the great breakthroughs in the discourse this year has been the recognition that [pro] privacy campaigners and [pro] copyright campaigners are actually on the same page. They're trying to assert individual ownership – not to control, that's part of the paranoia of the debate – they're trying to assert ownership. Now libraries are based on strong copyright. Libraries are sharing institutions – file-sharing institutions – and they wouldn't be there without the property right being recognised. If you didn't have the property right you wouldn't have the library.

Now, at this point when I'm talking, heads start nodding, and people say "Yes, we support copyright. We support creators' rights. Of course we do."

Then there's a "but".

And the "but" is: Don't you dare assert your right. I find this a very mealy-mouthed argument. It boils down to: "You have a right, sure, copyright-holders – but don't dare assert this right. Don't you dare defend your right." Just imagine if this was an argument about gay marriage. And somebody says, "Gosh, I'm all for gay marriage - but you gays, don't get married if you're gay." That's the kind of discourse we have around copyright.

There are some problems. The chattering classes have a prejudice against markets and against creativity and intellectual property itself. I've sat at Islington at Hampstead dinner parties where people complain about copyright for hours, quite bitterly. Then the subject turns to whether Jamie or Isabella are going to get the job with the TV production company - or The Guardian - and they realise they're not, because those jobs are disappearing. They're not there anymore.

Another problem is academics, where it's very common to hear a prejudice against the individual. They'll find all kinds of reasons saying the individual isn't creative. Creativity comes from somewhere else – a machine, perhaps, or the Hive Mind – or isn't there at all. And in recent years academics have become part of the regulatory machinery of government. They see a problem not as a business problem – which they don't have a clue how to fix – but a regulatory one. I don't think that's an entirely false view, but this is largely a business problem that's going to be fixed by markets, by people paying for things they like.

Finally, one aspect that's kind of new this year is that we have a radical administration in the UK - it's our bureaucracy - which seeks to collectivise these individual rights. And I'll be surprised if in 18 months we still have a professional photography market. The bureaucrats are out of control, they don't have a respect for individual property rights, for individuals owning their creativity and taking it to a market.

It isn't a big news story yet, although I've covered it a lot at the The Register; we could soon start to see businesses leaving Britain fairly soon because of this institutional hatred of copyright. So to sum up: it's economics, it's a problem... it isn't rocket science to fix it. Thanks.

For brevity, here are précis of the other openers:

John Waters:

Information is now taken for granted and in my industry it's a consequence of decisions newspapers made. In the book The Shallows Nick Carr suggests there's a long-term potential damage to our brains from using the internet and I think there will be a re-evaluation in 10-15 years. Neil Young once said something that was derided at the time: he said analogue music gave a different experience each time it was heard, and digital music gave you the same experience repeatedly. We're now parasites on our past - we have this wonderful archive of music, but all we have to do is fuck around with it. The freedom of the consumer to get what they want is destroying the freedom of the artist.

Alan Miller:

I used to promote raves and my own business had been built around piracy to an extent. The debate around music is now shrill and shallow. A report last week suggests that high piracy groups were also the biggest spenders on licensed music. Imposing legislation doesn't address the issue properly. Roger Scruton described music in a moral sense - the depth, the range, and our relationship to it - and how it forces us to understand ourselves. Art should be valued and remunerated. The music industry is really lacking leadership. The vision and leadership of a Jack Welsh or even a Bruce Lundvall of EMI is missing.

Any mention of enforcing rules brings out shrillness in the debate. Often big corporations are seen as evil in a very juvenile sense. The Pirates will make the point that artists should be remunerated but quickly point to eeevil corporations as justifying the work being free for all. They're narrow and juvenile anti-capitalists.

There's also a determinism here. Machines don't make the law, but us humans do. Our humans opinions and decisions need to be thrashed out. People fall into the technophobe or technophile camps - but human agency is ultimately what's important.

Helienne Lindvall:

Alan said the pirates are the biggest spenders, but that doesn't mean piracy is the cause of their spending. It's a group of people who like music and are obtaining it however they can. I'm a singer songwriter and musician and we're largely invisible. Certainly in this debate. Piracy and copyright is always referred to "big corporations trying to get more money from consumers" but they don't see us. They don't understand how copyright works. I was at ACTA hearings in Brussels this year. Speaker after speaker talked about how The Pirate Bay was freeing them from decades of music industry exploitation. I'll give you my experience of music industry exploitation.

Imagine walking into a bank, telling them you're a songwriter, and asking them to pay your living expenses for four years. And you only have your songs as collateral. And you've never made a record. And if it doesn't work out you, you want them to write off this loan. And you want to get another loan or even want to walk right back in four years time and ask for another. No bank would ever go for that - but my publisher did just that for me. I had no records out. My deal was four years; they probably didn't recoup until six years down the line. Why? All this underpinned by copyright and every time my songs were listened to or consumed there was a micropayment. A tiny payment.

People say someone who makes a chair shouldn't get paid every time people use it. But they don't get paid 0.00002p each time. In music, you only get remunerated if people like what you do – so copyright is very fair.

The word for copyright in Swedish is not a straight translation – it's "Originator's Right". We do not restrict people from using our music, the right is what we use to get something out of it. I agree with Andrew that having the state provide money or underpin the industry is not a healthy way of doing it. Most countries that have healthy cultural markets are not underpinned by state funding.

Ambition is a dirty word

Moderator*: In the discussions about economics are we losing the value?

Orlowski:

Copyright is very important, but it's invisible – when it works, it should be invisible. No one should give a crap about it – it should just work. It's a boring, B2B, backroom mechanism that keeps competing economic interests honest. That's all it is. Remember that the people holding the copyright are usually the lowest in the chain, the poorest, the weakest, and the only weapon they have is to withdraw their material from the market. It's all they can do.

Miller:

Capitalism is almost a dirty word now. Even capitalists don't talk about being ambitious, they're embarrassed about talking about growth, or aspirations, or development. So we instead get a juvenile discussion – businesses are full of greedy people who can't be trusted, who are out of control. Similarly debates about moral universal – whether ideas are right and wrong – are seen as embarrassing. I think there are and we need to talk about it.

Lindvall:

There's a real dilemma for people who want speak out - it's thought of as dirty to talk about money when talking about your art. Nobody wants to have a debate about it - the artists who do get ostracised. So it ends up that labels or lobby groups do it. And then people think that artists think piracy is OK. Google is probably one of the biggest corporations that is oppressing artists more than the labels.

Audience Questions

Q. It's all couched in moral language: it reminds me of the weavers complaining about technology displacing their primacy. The reason there is a music industry is that the industry monopolised the production of music. One hundred years ago there were still songwriters and still singers. I hate to shoot your fox - you can get upset, but it's too easy to download, too easy to copy. There isn't anything you can do. The monopoly on technology is over.

Q. Could some micropayments work?

Q. Andrew has a classic free-market libertarian dilemma about IP - it's both property (yay) but regulation (boo). With the analogue to digital trajectory there's less and less where people are compelled to pay money for them. You have to contrive mechanisms to make people pay. We now have greedy market entrepreneurs like Grooveshark, who are parasites. Grooveshark make The Pirate Bay look principled.

Q. Have you heard of Louis CK - who has been hugely successful and cut out the middleman. What do you think?

Lindvall:

Yes, I am familiar with Louis CK. Louis CK is not some unknown guy who just set up a website one day. He had made TV shows and movies and the copyright industries put in the investment. As for micropayments, it's difficult enough to do now correctly. We can only imagine what it would look like if we took in all the other copyright industries in one blanket fee. And I agree with the question about Grooveshark. At least The Pirate Bay is telling us to fuck off. Grooveshark is pretending to do the right thing.

Miller:

If you think it's cool nicking somebody's stuff - is it cool pickpocketing them? Or doing a bit of identity theft?

Waters:

Bono and Bob Dylan could pay an extra tax to fund creative industries. It's more persuasive than the tax they're paying out of the moment.

Music fans are ethical people but when you can get something for nothing - you think: "Why not?"

Orlowski:

We're forgetting one much bigger point: if we reward art, we get more of it. And why should you have a shitty job in Tesco or a call centre and have great talent but not be able to go to market with it? Markets aren't perfect at all but the Left has tended to mythologise and animate them as evil. They're the least-bad thing we have for producing art and culture.

As for Louis CK cutting out middlemen and going it alone: people have always done that. Middlemen have value and if an artists thinks the money is worth the time saved licking envelopes or Tweeting all day, let's have middlemen. I call stories like Louis CK "jackpot anecdotes". The amount of money is shrinking and they're a distraction. Oh, look: somebody won the jackpot.

I don't understand the "compelled to pay for art" argument. You're compelled to pay by the company that made your Hi-Fi stand. You're compelled to pay by IKEA to take it home. You're compelled to pay by Vodafone. You're compelled to pay for your iPhone by Apple. You're compelled to pay for the headphones you're listening to the music on. What you seem to be saying is that you want to not pay for the one thing you can actually get away NOT paying for. Now, I'm not going to say to you "that's immoral" - but it just sounds really chiselling, and really mean to me. And anti-human.

I've never known a progressive movement declare as its mission: "Hey! let's make people poorer and take away their freedom!" Now creators are being asked to cry "Freedom" while taking it up the... well, I won't say it. Think bending over.

But John's argument about putting a tax on Bob Dylan. Bob Dylan actually subsidises poorer artists today. Bono does. The big seller subsides the artists who don't recoup, but are "middle class" artists and could make a living. Today we say how evil record companies, and good riddance, to the old model. But it was essentially a redistributive socialist system; that's almost gone now.

The morals of a pirate...

More questions

Q. Going back to morality and piracy. The cost of production and distribution have virtually evaporated - but that's as far as it goes. The idea the technology genie can't be put back into the bottle is slightly skewed. The history of copyright comes from a liberal tradition where societies have recognised the moral worth of the endeavour of creativity, versus the ease with which it's possible to reproduce the object.

So, whether it's literary novels or sheet music, the idea that you could simply copy and then extract value regardless of the author of the creative act was seen to be immoral. It's simple. It's all about the moral right of the creator. In terms of what's happening now, the genie will go back into the bottle. For 10 years nobody quite understood how to transition from the old-fashioned business of profiting from the circulation of limited quantities of replicated objects to what is now the case of managing of datastreams.

It is going back into the bottle because the industry is leaning how to do a controllable and monetisable series of gateways. Musicians are making money off live events. You pay at the gate. And we'll go back there on the internet. It's not a big deal.

Q. I worked at Columbia Records. I don't think 10 million lost sales from Bittorrent is 10 million lost sales. I think it's 10 lost sales. Give away a low-bitrate version of your work on Bittorrent, discover that it's big in Peru, then go to Peru and make lots of money.

Q. I run an incredibly small record label. My label gets more from Google than Spotify. Google have started to ... my Dad makes movies and puts backing music on it and labels like my label get revenue from clicks...

Q. The act of downloading copyright is said to be something that is not very nice to do, that is immoral. But not allowing that to happen is immoral. It forces new laws and the police to come to my house and arrest me if I share a product I brought from you. If I buy a chair from IKEA I do not go to jail. Why should the artist or the government put me in jail because I share something I bought?

Q. Someone said it's too late. So surely it's up to the artist to make the most of the situation and make the music cheaper and create a larger fanbase and buy gig tickets, merchandise. By that respect [sic] the artist will be making money and there will be more of their music in clubs, and an influx of culture in that respect.

Q. We've talked about the moral value of art to the artist. There was another debate that picked up on the moral value of culture to the individual. We should remember that. Remember the FTP protocol was designed to copy files flawlessly. A technical approach may foreclose a broader moral approach. We've talked about sponsorship and so on but not found ways of monetising music that is of the medium rather than reverse-engineering a model onto the medium. Maybe it's mining datastreams that work with the medium? [Nico McDonald]

Q. Someone mentioned looking to live music to save the industry. Live music is even more disproportionate at avoiding paying artists than recorded music. Some are likely to get (indistinct) £20,000 and many more receive very little.

Andrew - you asked us to look at the economics but I think a lot of language we've heard is disincentives: punish and enforce. I was a freetard for a number of years, but I started to pay for digital media again when it was explained to me what I was paying for. An example is the Humble Bundle – where the user can choose where the music's going to for the games – the distributor, the creator or a charity. This tickbox model – does that scale?

And now for the summing up.

Miller:

The phrase someone used, "The genie is out of the bottle", is really a call for passivity. But we make the world every day anew, if we want to and chose to. That's the bit that's missing. That we can't innovate, we can't come up with ways to modify things - that the obstacles are too immense. We need to separate things that we project onto the technology, and then say they're part of that technology. They're not. We innovate.

There are obviously technical solutions but also how we discuss them or value them. The live music thing is true – but how can we create a world where artistry is possible, when you make that significant investment in time and commitment, if you don't have a chance to be remunerated? Leaders of industry should start leading from the front.

Waters:

Not long ago it was thought impossible to sue somebody for defamation on the internet. Now you can. The internet will be absorbed into civilisation. There's a part of us that isn't civilised, a part of us that's selfish, and that's the part of us that interfaces with the internet. With a mouse in the dead of night. That's not freedom. Freedom is not shouting from the back of the room - it's saying "This is John Waters and this is what I believe".

I tend to avoid the first busker of the day - the second one I feel a bit more guilty about avoiding. The third busker always gets something. There's a kind of irrationality here. People are open to the labourer being worthy of his hire. It's easy to hide away on the internet and no culture to oppose that instinct within you.

Orlowski:

Overall I'm really optimistic. That might be because I'm an idiot - or very naive.

But Alan encapsulated why, and it's because we really haven't tried anything yet. We have this deterministic thinking that digital music today is as good it's going to get for consumers and we can't do anything about it. Look at the things we haven't tried. Look how difficult it is to go to a friend's house with music on your phone and play it. Look how difficult it is to get credit on the internet - it's unthinkable. I get credit from my news agent and off-licence. All these fundamental platform-building blocks are not in place yet.

Industries have to be very co-operative to build these platforms and make experiments. We have to build these things, give people wonderful things to buy, and - I'm the world's most reluctant enforcer but we have to change the risk proposition very slightly - and the money will start coming back into the system.

Some of the rhetoric I've heard here in the questions reflects the idea this is as good as it gets. I hear: "Shall we make the most of it?" Just go and play live somewhere, you say. Sell t-shirts. Do anything but try and express value in that piece of music. It all reminds me of JFK's "Ask not what America can do for me", but turned upside down. You know, the internet version of JFK: "What can I do for the internet?"

Let's challenge this proposition that we have to sacrifice so much time, so much attention, give up so many rights for the benefit, not for us, but for the benefit of this system.

We're all creators now, which is wonderful. The one thing we must not give up, and ideologues and bureaucrats are telling us to give up, is our right to own those creations.

So there you go. I've never been called a "free market libertarian" before, but there's a first time for everything. I discussed the strange attitudes of some libertarians with David Lowery, back here. It continues to be a puzzle.

At the start I said piracy wasn't the biggest problem facing the music industry. Have a scan through the audience questions - not all of them - and a pessimism runs through them. Things are as good as they're going to get. Which is crap. The technology industry and music industry seem to sink to the occasion.

If you want growth, you have to give people reasons to get excited again, I would suggest. ®

* The producer/moderator for the session was politics student and debating champion Jacob Reynolds.