The Death of The Music Industry

We noted how the record label system has been out of wack for a lot of years. I mean its pretty dramatic when movies lampooning the system such as Airheads can become popular showing the plight of musicians trying to convince record labels just to let them express their music to their own audience.

Some of the stories are so extreme that if you didn’t know they were true, you would think they were the fabrication of some crazy science fiction author. From John Fogerty being banned from composing to performing new material because he “sounded too much like himself” to Prince who literally changing his name to an un-pronounceable sign just to be able to continue to create while he waiting out a contract, the legends go on and on.

Finally, enough was enough!

It is phenomenal that all this broke in the same time frame, in the last five to ten years. But it wasn’t a spontaneous blockade that sent a fresh breeze of creativity blowing into a stagnant record label world. It was a David to their Goliath that, just like that little boy with the slingshot, came out of nowhere and took on the giants with an improbable weapon and turned the war to our side.

And that little warrior is and was…

The Indie record label.

And just like David went on to be king, we are starting to see a whole new record label system, built around the indie label that will be our world for the years and decades to come. And it is a beautiful sight on the horizon for sure.

As we talked about last time, at one time radio ruled the land like the Tyrannosaurs Rex ruled the primitive world. Well just as powerful and mighty at that time were the big major name record labels. These guys could make or break a band with the flick of a wrist. And getting signed to one of the big labels was the dream and ambition of any musician with who ever hoped to have a prayer in the music industry.

In fact, if you were to take a course ten years ago in - How To Make It Big in the Music Industry, a huge part of that course would be how to get notice from and negotiate with the big record labels. The ramifications of this “out of wack” system were negative for artists including…

* Artists made it such a major part of what they lived and breathed for to be noticed by the big record labels that they virtually forgot who was really important to them – their fans and the music they made for those fans.

* Hundreds, maybe of thousands of small but very talented artists never got “discovered” because all of the power was concentrated in just a few very large but very selective record labels. For the most part those labels were only interested in music acts that were “commercial” and sure to make money.

* A whole subculture of managers, agents and liaisons of all descriptions was spawned by the need for artists to get through the labyrinth of mysterious record label protocols to somehow arrive at that emerald city and “get signed”.

* Record labels began to see themselves as supremely important. All of a sudden, a bizarro world was created in which the record label which should have lived to serve the artist became the master of the artists and the artists lived to serve the machine.

* Labels demanded outrageous contracts from new artists in which new acts virtually sold their souls for the chance to get signed. The stories of how break out performers were shackled by these contracts later in their careers are the stuff of legend.

But we all have good news and better news. The good news is this old system is finally dying away. The better news is what is coming along to replace it.

As we move rapidly toward the new year, the more I think about it, the more I suspect that the title of this blog is more true than it ever way. Ok you can admit it – when you saw the title of this book - THE DEATH OF THE MUSIC INDUSTRY – you had to think — WHAT ARE YOU? CRAZY?

“Get the heck outta here!” “You must be out of your gourd!” “You are one joker short of a full deck, man!” Or as the British would say – “Blimey mate – Your Daft!”

The music industry doesn’t seem to be dead. I mean, there is still music. When you turn on the radio – something comes out. If you work at it, you can actually still find a record store – although they don’t sell records.

Well just because there is a remnant of something – doesn’t mean a huge evolutionary shift hasn’t happened. After all – Even after the death of the dinosaurs…There Were Still Lizards!

And even after evolution came up with the bright idea of humans, (yeah right, like THAT was a good idea!) There Were Still Apes!

But apes and lizards are just a sad left-over of once grand domains. And that is what we see in the dying music industry that has dominated the lives of musicans and fans for years, scratch that, decades. An old way is dying out and maknig way for the new way. And that is what we want to talk about in the new year, the new way that is coming on fast and making the return of the Apes and Lizards to rule the world even more unlikely than it is today.

The music industry and the movie industry have run somewhat on parallel lines in the last couple of years. Some of the ailments that have brought us to the point of declaring the death of the music industry have hit the movie industry as well. But each industry has been impacted at different paces it seems. Let me illustrate.

The big thing that has been such a difficulty for the old guard music industry to cope with is file sharing. It has ripped into the record companies profits and caused them fits. For a long time, the industry has attempted to fight back using conventional weaponry of lawsuits and advertising only to see the battle being lost faster and faster. Finally the industry has seen a fundamental change of culture that signifies the decline of the old guard music industry and the rise of something new, something we really don’t have a complete fix on yet.

The file sharing phenomenon has hit the movie industry but not as severely – YET. But like killer bees heading up from the south, its going to hit the music industry and it too will go through a massive shift in how it does business.

Now what has hit the movie business hard is the rise of independent labels. Its amazing how many films we love these days are indie films. This is causing significant changes in Hollywood and in how we view the movie business. And just like with the file sharing issue, the music industry too has seen the rise of indie labels but it hasn’t been such a massive paradigm shift as it has in the movie business – YET. We can easily see the spread of indie music labels as coming along as the next huge change to our business as well.

The important thing is who is the real beefier of all this? It’s the fans and consumers of movies and music. And for that reason, all of this is a very good thing indeed

There is probably nobody who reads blogs like this one or who has even a faint awareness of the music industry who is not aware of the passing of James Brown on Christmas Day 2006. James Brown if anything is an example of exactly what we all think about when we have in mind what a LIVING music industry looks like. Exciting, unpredictable, ethnic, fascinating, fun, dangerous, hard working and something that scared your mother. That was the music and the art of James Brown.

Just for the fun of it, you can still catch the classic performances of James Brown. Here is a great one out on YouTube - http://www.youtube.com/watch?v=bs1HUbMCZKc. What is strange is that to tap into the excitement and freedom of someone like our recently passed brother, you have to go to the new maverick formats of the new music industry such as MySpace or YouTube. The old forms are just to rigid to keep up with what is new and exciting today. I think James Brown would approve of the revolution in the music industry because in a way, his explosion onto the music scene so many decades ago was a revolution in music itself.

Well indulge me as I reflect on a great musical talent that I would LIKE to think he would approve. But as you enjoy this video on YouTube, just add to your own holiday reflections that the vehicle that is bringing you this moment of joy from the life and art of James Brown is being brought to you by the very thing that is causing the death of the old music industry. And just like the Godfather of Soul, the new music world is exciting, unpredictable, ethnic, fascinating, fun, dangerous, hard working and something that might scare your mother.

I felt this discussion of fair use and DRM was necessary because it is in the background of a lot of the discussions and struggles between he dying old guard music industry and what is new and up and coming in our world. To some extend our discussion of whether DRM will find its way into the internet world of P2P file sharing is still pretty theoretical. But we as members in good standing in the music industry need to come to terms with what is “right and wrong” in terms of file sharing and copy right laws.

One force that will continue to be a hindrance to DRM and other punitive or even technological solutions to the free spread of music is the same force that made the internet revolution in the music industry take off in the first place. And that force, to use an overused phrase these days, is freedom. The reason we got sprung from the restrictive systems that the old music industry put on us is that the internet came along and delivered a bumper crop of freedom to us.

The DRM movement even with the legal support of the DMCA is just more of the same of what took down the music industry in the first place. And that is that urge they have to control creativity, to limit both artists and the public and to keep things in the corporate stables. But the internet has blown the doors off of the stable. And how to you get those doors back on.

Even if somehow laws and technology could be put in place to stop one part of the free distribution of music on the internet, it would just crop up elsewhere. The cat is out of the bag now. Even if they were able to put controls on a certain kind of file type so free spread of that file is either limited or reported, internet denizens (and I use that term affectionately being one of those denizens myself) are notorious from just dumping the restrictive systems and finding new formats and ways to keep the freedom of creative expression going.

And THAT is the great hope for the new music industry.

No I have not gone acronym crazy. Yesterday I was discussing the coming of DRM and how it might be a very real threat to the freedoms the internet gives us for the distribution of music we enjoy. Now on first look, DRM seems like a technology that has no chance of working. For one thing, you would think that the courts would step in and ban it as a violation of freedom of expression or something like that.

But that is where the second acronym comes in – the DMCA. That acronym stands for the Digital Millennium Copyright Act which is a law that does the opposite of what we expect. I bans the circumvention of DRM so it can be used to put controls on creative material for the sake of protecting copyrights.

Now we are all for seeing creative material protected. WE are artists ourselves and we want the fruit of our labors to benefit us. But DRM has such wide sweeping effects that it could bring to a halt the very creative and exciting things that are happening as the new music industry takes shape to replace the dying one. If DRM reaches maturity, it will give the copyright owners wide sweeping ability to control how their material is used down the road, something that the creator of music or movies or any copy written material ever had before.

Now you and I might not abuse this but there will be those, like the ones who are getting behind the big money in the old music industry that is suing children for downloading and putting ridiculous advertisements on to scare of guilt us out of file sharing. These people, all being fellow members of the music community, could cause serious damage to what is shaping up to be the MOST creative period and the MOST productive and profitable period, not the least. So we have to do allow e can to stop DRM if we can. Being informed as I hope this weeks blogs have helped with is a big step. But tomorrow I think I will be able to report what will be the blow that will keep DRM from ever achieving success. And it will come out of nowhere.

DRM is not something that was dreamt up to put a stop to P2P file sharing. It actually has been around for a while. It is both a concept and a technology. The purpose of DRM is to give copy right holders some kinds of rights to stop the rapid transfer and copying of their material for which they do not receive any compensation. Sounds pretty moral doesn’t it? DRM for the trivia buffs, stands for Digital Rights Management.

But the more radical advocates of DRM would shut down some very basic “sharing” of music that is common in society in today. What if DRM could stop you from ever making a tape of a song off the radio? What if DRM could stop you from ever cutting a mix tape for your girlfriend? What if you wanted to cut and paste the lyrics from a song into an email at valentines day or so share how clever this artist was to encourage your friends to buy his or her records and somehow that could be stopped?

Now obviously, the technology of DRM cannot do all of that. The technology of DRM basically is built on the idea of imbedding controls at the distribution point that limits the ability to copy or use copy written material. So for a while there was a push to put DRM chips in VCRs so nobody could record a show off of TV until some kind of cryptic signal was sent to the machine to allow that to happen.

Well obviously, that did not happen. Those that would impose severe limits on fair use would stop you from being able to whistle their tune in public or sing it at the ball game, no matter how thrilled the songs author would be to hear it sung that way. It is more than something that would put a serious crimp on creative growth in the arts, it would hamper social activity in so many ways that it is inconceivable to let such a thing become law.

But just because we have not seen the widespread use of DRM technology doesn’t mean that the law is not out there. And if it ever gets some teeth, we are in for a world of hurt.

Yesterday we talked about the current battle over P2P file sharing and historical settings where similar types of copying were done, and fought by the industry. The example of the VCR is pretty striking. Today we can hardly imagine not being able to record the ball game or our favorite soup opera or situation comedy to enjoy later in the day or week using our VCRs or the next evolution of that technology – TIVO.

The reason that industry and that technological advance was made available to mankind was because of an aspect of copyright law called “fair use”. Fair use is part of the law, specifically the copyright law that essentially says that we are allowed to use copy written material for nonprofit purposes. Now that is a big generalization of what it is for and you can learn more about it if you want at http://www.copyright.gov/fls/fl102.html

Without fair use, our lives would be significantly less enjoyable and in fact, people who produce copy written material, including musicians like us would be considerably poorer. Fair use allows people to quote your lyrics in an email, to whistle a tune you wrote as they ride the bus or to play an excerpt as part of their ring tone. It spreads the interest in your music and draws new fans and customers to you. That is a good thing.

Fair use also has a big part to play in the war over DRM and file sharing. Its quite a messy soup opera itself and we will go into the DRM side of it more tomorrow.

The outrage over file sharing using P2P file sharing networks seems to be gathering more and more momentum each week. I read some of the articles from “deeply concerned” and “morally wronged” big music industry executives and spokespersons and, I don’t know about you but I have to respond “oh please.”

You would think the idea of someone had never heard of any kind of media being copied before in the history of the entertainment industry. Then I recalled that we went through the exact same thing when this little device called the VCR came out. I am going to bet that there is hardly a reader in the audience of this blog who does not or at least has had a VCR in their home and happily used it to record their favorite television programs to enjoy later.

What not a lot of people know is that when the VCR hit the markets, the big budget entertainment giants went bonkers over it the way they are going bonkers over file sharing right now. In fact, in 1976, Universal City Studios, Sony and Disney got together to “put a halt” to this evil enemy that was going to bring the death of the entertainment industry, probably the same way file sharing supposedly is going to mean the death of the music industry today. What they sought to do was impose a form of technical censorship or a programmed chip called the DRM to stop illegal copying using VCRs.

Now our Supreme Court doesn’t make every decision correctly but this time they did. They ruled that VCRs without DRM were perfectly legal under a principle called “fair use”. And look at the outcome. Did VCRs bring down television and movies? Not even close. If anything it facilitated GREATER viewership of those media and it spawned an entire industry, the video store industry. Today you can hardly imagine any town or city without a video store on every corner.

I want to talk more about fair use and the DRM as it pertains to our modern “war” over P2P file sharing and how it is destined to caused the death of the music industry. But I thought this little slice of history might be an amusing way to launch that discussion.