Why the Record Industry Doesn't Stand a Chance

[Jim Dye]

Why the Record Industry Doesn't Stand a Chance

BY JAMES LILEKS

c.2003 Newhouse News Service

Forget Napster. The newest place to steal -- sorry, "share" -- copyrighted materials is Earthstation 5. They claim 22 million downloads of their software, offer digital copies of movies still in the theaters, and boast that no one will be able to shut them down. They may have a point.

They're located in the Jenin refugee camp on the West Bank.

You can imagine the discussions in the Recording Industry Association of America's legal office: "You serve them with papers." "No, YOU serve them." (Pause) "OK, we'll send an intern."

Earthstation illustrates the problem the record industry faces: It's a big planet, it's wired together, and it's filled to the gunwales with pirates.

You've heard of Napster? So 2001. Now there's Kazaa. Now there's Grokster, whose corporate location in the West Indies just screams, "Come and get me, copper!" There's Blubster, another music-swapping program provided by a company in Spain. The day there are two servers in Greenland, the second will be devoted to letting 20-somethings in a Vilnius dorm room download Metallica songs.

The recording industry hasn't just lost control of its product; the product itself has lost its reason for being. The CD is as dead as the album, and for the same reason: Most bands have one or two good songs, a couple of so-so numbers and a half-dozen tracks of dreck you'll never hear again. We all know what CDs cost -- you can get a hundred blanks for a sawbuck. So why does the disc cost almost 20 bucks? Well, there's the cover art, the distribution, the advance to the artist, the cost of catering a five-week recording session for a band made up of ultra-vegans who eat only imported Irish loam, and of course the all-important $19.99 PROFIT.

You can't begrudge them a profit, of course. It would be nice if it trickled down to the average recording artist as well, but let's not be silly dreamers here. What really plagues the industry is an antiquated business model that requires putting out 10 tons of overpriced junk in the hopes that 3 ounces will make 11 tons of money.

But no one wants albums anymore. They want songs.

Unfortunately, they want them for free, and that's where the RIAA steps in -- with hobnailed boots. They've threatened file-sharers with huge fines for each download, meaning that kids with 30 gigs of "shared" music could face fines equal to the gross domestic product of sub-Saharan Africa.

The downloaders insist they have the moral high ground; they'll complain about the cost of the product, the unjust contracts musicians sign, the shoddy treatment the industry gave Blind Willie Simon in 1937, etc. They'll sniff that the musicians should give away the product and make their money touring, which is akin to saying restaurants should give away food and make their money selling souvenir forks. They'll craft shaky analogies to libraries -- as if the public library lets you take a book, make a perfect copy, and give it away to 4,982 people.

It's all a justification for the Internet's eternal problem: No one wants to pay for anything unless that something is nekkid women. And even then they'll complain about the price.

So what's the solution? Congressional hearings, of course. That'll fix everything! The creepily named Senate Government Affairs' Permanent Subcommittee on Investigations will soon hold hearings on the RIAA's dilemma.

But get this: The subcommittee's chairman thinks the RIAA is being "excessive." And he's a Republican -- Sen. Norm Coleman, a Minnesota solon who admits to having used Napster himself.

Coleman has a point; copyright laws permit fines up to $150K per tune. There's no sense in suing some kid eleventy million bucks for file-swapping songs. On the other hand, no one is going to stop stealing music unless he's scared of being arrested, sent to jail and forced to share a cell with a smelly old hippie who sings Mungo Jerry songs all night.

But there will never be enough arrests or convictions to stop the hard-core downloaders; there will never be a technological fix that someone won't find a way around. Copyright violations will cease when enough people decide they're morally wrong, when the old explanation -- "But Ma, even senators do it!" -- doesn't feel right. When the Internet is governed by reason, decency and conscience.

Never, in other words. See you in Jenin.

[Jim Alfredson]

They'll sniff that the musicians should give away the product and make their money touring, which is akin to saying restaurants should give away food and make their money selling souvenir forks.

That's a stupid analogy. What it's akin to saying is that a painter shouldn't make his money on collections of paintings in books (ie, album) he should make it by getting those paintings in as many museums as he can (ie, touring) so people can see the real painting up close and personal.

I see no problem with this. As a musician I don't think musicians should expect album sales to support them. They should play live for their money. They should WANT to play live. I don't want to sit here and sell millions of records and never play a gig. That would suck!

Besides, most musicians are not making a living selling records. The record companies are making a living selling records.

The RIAA can try all they want to stop file sharing or they can get with the times and create a new business model.

For instance, CDBaby, the independent music service that Organissimo uses to sell our CD online, is becoming a digital distributor. Here are the online services they've signed up with...

- Apple iTunes

- Emusic.com

- BuyMusic.com

- Rhapsody aka Listen.com

- AOL's MusicNet

- AudioLunchbox.com

- eMePe3.com

... and more on their way.

That means that our CD (and eventually CDs) will be available as downloads for the measely price of 99 cents per song or less to anyone who wants it with no overhead, no materials, no shipping from us.

That's brilliant.

[Soul Stream]

I would just add that many musicians who are in the later stages of life would depend more on cd sales, reissues. John Patton and George Braith are two that I know who recieved a few nice checks when the opportunity for them to gig wasn't that great.

But, like B3-er, I think most musicians at this point look at records as a necessary evil in order to tour. Making money, except for that small select popular group, from CD sales is not even really considered....in their prime at least.

[Jim Alfredson]

I'll just say this: We're down to probably 200 CDs left of our inital run of 1,000. And we're not even close to paying off the debt it cost to make the CD in the first place.

[Jazzmoose]

I think it's easy for us nonmusicians to overestimate what artists are getting through the sale of their music. I heard an interview on KCSM with Greg Osby in which he jokingly commented about carrying his own bags, driving his own car, etc., his point being that his tour was a simple, by-the-band operation. I was thinking, fer cryin' out loud, this is a "name" musician, and he's not living easy? We look at what the pop stars are making from album sales and assume that everyone is at least getting a nice share of the pie.

I honestly don't think I could ever be a "screw the artist, I ain't paying for shit" person, but I'm beginning to wonder if anyone other than Brittney, Beyonce, Timberlake, etc., is being hurt by this...

[Ron Thorne]

I'll just say this: We're down to probably 200 CDs left of our inital run of 1,000. And we're not even close to paying off the debt it cost to make the CD in the first place.

I don't expect my purchase to "put you in the black", b3-er, but I'll gladly contribute to the reduction of your overhead.

Not playing live would suck, indeed.

"The RIAA can try all they want to stop file sharing or they can get with the times and create a new business model."

Amen.

[Soul Stream]

My feeling is it's getting very, very, very hard to be a musician. Gigs don't pay. Making CDs doesn't pay (probably costs you money in the end). Expenses are high.....

People are so used to "burning" CDs for each other that it's kind of like someone buying a newspaper at a restaurant and leaving it...then 20 other people read it throughout the day. In the end the newspaper publisher makes 50 cents. I'm not talking about Madonna or Metallica here, SCREW those millionaires. I'm talking about bands living in a van, or playing the crappy gig down the street at the bar.

[Jim Alfredson]

I'm making a decent living playing gigs. They pay fairly well around here. I would hope it would only get better as the group gets more exposure.

CDs are a promotional tool, not a money-making tool for most musicians. As long as you go into it knowing that, you're fine. You gotta spend money to make money.

I feel no sympathy for the RIAA. They've been fucking musicians and listeners for decades.

[Christiern]

CDs are a promotional tool, not a money-making tool for most musicians. 

And so it has been since jazz first saw the inside of a recording studio. Bessie Smith, who never received more than $200 per usable selection (and no royalties), always regarded her records as promotional tools, which they were.

It should also be pointed out that most artists never see a penny beyond the scale they were paid for the initial recording. This is due to two factors:

1. They were never offered a royalty contract.
   
2. The cost of the session(s) was (allegedly, at least)not covered.
   

Usually, but not always, only the date's leader is offered royalties. The cost of the session (studio, sidemen, etc.) is absorbed by the leader (i.e. deducted before he/she sees any money) and--given the creative bookkeeping so many record companies engage in--that potential income is not something to bet the farm on.

Composer royalties is something else, although that part of the music industry is also not halo-ed. At least there is a chance to make some money if you own a tune.

Finally, I am in total agreement with the following statement by B3-er:

• I feel no sympathy for the RIAA. They've been fucking musicians and listeners for decades.
  

[Christiern]

I would just add that many musicians who are in the later stages of life would depend more on cd sales, reissues. John Patton and George Braith are two that I know who recieved a few nice checks when the opportunity for them to gig wasn't that great.

If you are talking about performance royalties, that is inconsistent with facts, as I know them.

Sorry to be so inquisitive, but where did you get the information, what were those checks for, how much money are you talking about?