The Death of The Music Industry

There is something about being able to go back to the good old days.  Back to when we were not worried about labels and contracts and lawsuits and junk like that and all we had on our minds was making music with our buds in the garage.  That is worth preserving.  And that is what Little Steven is doing very well at Little Steven’s Underground Garage. 

You know Little Steven probably most notably from his work with The E street band.  Well here is a guy who “hit the big time” who never forgot his roots.  In fact, if I am picking up on the reason for being for this site, he never wanted to leave his roots at all.  What he has done here is gone back to what is truly fun and great about the music world in the first place and that is the culture, the social aspect and the sheer funk of hanging out together just making really crappy but also tremendously great music.  That is as best as I can say it, the heart of what “garage” is all about.

A good place to start on Little Steven’s site is the Garage Essay because he has said it there better than I could even try.  Before you do that, make sure you get this site bookmarked because it is one that you will want to “hang out” on often if not daily. 

What does this have to do with Indie versus big business record companies?  Well only what the spirit of the Indies is all about in the first place, that’s all.  So enjoy.  Take a break from the pressures and just wallow in the great music, the archived shows and the rants that you can stand on your garage trash can and yell back, “yeah, that’s right!”.  It’s worth the time you spend there if nothing else than for the catharsis and for the feeling that you are reconnecting to your roots, like Little Steven did when created this site.  Thanks Steve, for doing it so well for all of us.

http://www.littlestevensundergroundgarage.com/

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While the reports of the death of the CD and how the music industry is spiraling out of existence seem to be pretty much a weekly phenomenon, sometimes if you look a little closer, music industry markets are springing up as fast as the weeds in your yard.  The linked story is just one way that record labels and forward thinking promoters are finding ways to connect to today’s music lover that are “outside the box”. 

I am not a huge video gamer myself but I have tinkered around with the good ones and it’s impossible not to notice how cool the newest video games have become.  The music game series just combines the love of modern music with the gaming experience.  It really is a perfect match.  The same kind of consumer who loves to buy the newest releases out there is also the first one in the game store when a new hot video game hits the market.  So using that venue to sell music is a brilliant marketing ploy. 

We spend a lot of time slamming the major record labels when they completely miss the boat on a great market opportunity.  But in the “give credit where credit is due” department, the linked article indicates that the major labels are all over this one.  So you have to give them some credit for seeing a new market and responding to it rather than trying to drive it out of business with lawsuits.  They can be taught.

http://www.reuters.com/article/musicNews/idUSN4242464020070402

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Most of us were already aware that there is a big problem of music piracy in countries like China, Taiwan, India and generally in Southeast Asia.  I have had it explained to me that this is because the concept of intellectual ownership of something is pretty much unheard of in those countries to they don’t even know what piracy or plagiarism is much less try to live up to such a standard.

Ok, well that’s all well and good but they seem to understand what the concept of stealing is because the open market approach to selling pirated music is a huge problem over there.  I know, in this blog, we often seem to defend P2P file sharing and other methods used by the music industry that have been used for piracy.  But if you think we advocate piracy of intellectual property of musicians, that is incorrect.  We applaud methods being developed that accommodate the new music distribution channels of this century while finding ways to capture that revenue that artists need to survive and go on to make more good music for us.

Our position is that turning the machinery of the music industry against the fans of that music is counter productive and only drives fans further away.  But this business of open market sales of pirated music is something that would never even been considered in a western nation.  The reason compromise approaches to digital distribution works for western nations is because we DO understand intellectual property but we also understand that it is the job of the music industry to find ways to get that material to the fans that is in step with modern technology and still pays the artists what they deserve.

So we applaud Russia for shutting down the black market on pirated music.  Maybe that will cause the population of Russian music lovers to learn about ways they can get their music legally but still have easy access to the music they love.  When they do learn that, they too will become part of this century and they will deserve their seat in the modern economies that are beginning to form up.  And we will welcome them to those markets as legitimate consumers, not thieves.

http://www.reuters.com/article/musicNews/idUSN0217185320070403

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Nobody ever accused Trent Reznor of not being innovative.  But this new marketing campaign described in the link is like nothing he or anyone else has every done before.  This is true genius and it takes this whole concept of viral marketing and capturing control of the file sharing and download environment and sucking it all up into the weird, sometimes scary and always fascinating mental world of strangeness that Nine Inch Nails has always given their fans.

Even if you are not a big fan of industrial music, nobody can doubt that Pretty Hate Machine hit the music world like a volcano.  And it set Reznor apart as a true auteur and innovator the likes of which cannot really be matched except perhaps if you include artists who are or were head and shoulders above their peers like Beck or Kurt Cobain. 

This approach of using everything from many far flung and mysterious web sites, to hiding snippets of songs on phone message machines and on USB drives in the bathrooms of concerts is nothing short of pure brilliance.  This entire concept banks heavily on the networking of fans and their willingness to dive in and become part of this huge social experiment that NIN is using to build anticipation for their new release.  It’s a carefully crafted campaign that relies on the luck that each clue will be found and the “buzz” factor that fans will eagerly find each other and trade the clues to keep the “story” alive.  And the beauty part is that it’s working.

http://www.reuters.com/article/musicNews/idUSN0233620220070402

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This article from a few weeks ago should give us hope that the major record labels are about to buy a clue and stop this insanity of trying to imbed DRM in every digital track they put out.  This DRM experiment has been such a total disaster only inspiriting a new generation of pirates to eagerly learn how to strip out the protection and generally pissing off consumers who would rather just not trade with you under these conditions. 

The stumbling part of this decision is to offer non-DRM versions at a higher price and then to continue to offer some of their library with DRM at the lower cost.  This kind of arbitrary mix and match is only going to infuriate consumers more.  EMI should be lauded for at least starting the process toward trying to do business in this century which is a step you don’t see the other majors doing.  But this approach is like watching someone only partially dive off the high dive.  The outcome is clumsy, hard to watch and will probably result in injury.

Someone on the EMI staff needs to take five minutes and think like a consumer in this equation.  To that music lover out there in the marketplace, which now is the digital marketplace, like it not; DRM is equivalent to a virus.  So to offer versions of a song without the virus for a higher price is nothing more than blackmail.  Leave the virus out of the music once and for all and then come to the market and compete based on what you ought to stand on in the music business, quality music and good customer service.  Then you may see the return of your customer base that has fled for the Indies because of the arrogant attitude of the major labels.

http://www.reuters.com/article/musicNews/idUSN0134595820070402

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There is no accounting for taste.  And that is certain the case with a strange band like Insane Clown Posse.  I have to admit, I have not been able to refine my taste buds to include the music if ICP.  Their biggest appeal to me is a great band name and I do like the costumes.  But hey, there are a lot of genres of music that have a huge fan base that I am sure any of us could develop a taste for, if we chose to.

But the linked article makes it contribution to our appreciation about how to go it alone and sustain success and it raised my opinion of ICP because not only do they know their fan base well, they know how to leverage their past success into an ongoing marketing model. 

When you are a niche or specialty band, such as ICP is, it’s important to have a long range plan.  And the way this band went about taking on all of the major functions of a major label, finally going Indie and building their marketing model by nurturing the fan base and utilizing merchandising and other supplemental income for long term success is a great example about how to cut it without the domineering influence of a major label. 

There is plenty for up and coming Indie acts to learn from how ICP captured the public imagination and then too advantage of that popularity to build a cult following that would support them long term.  I found it particularly savvy of them to run their own music festival and to emulate the success of KISS, another band of questionable music value but outstanding marketing skills.  There is room for many approaches in the music business

http://www.reuters.com/article/musicNews/idUSN0232707820070402

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Part of our “charter” (if you will) here at The Death of the Music Industry to be of service to the Indie world and to musicians who are struggling to find their way in this new music business.  That is one reason the company that sponsors this blog, Platinum Millennium, has so many articles and fine books on getting started in the music industry, finding or starting a label and getting signed.

A big part of becoming successful as a musician in the new music business is to know the laws that are used to support even the newest changes to how music is produced, distributed, sold and artists paid.  So it’s a real good idea to know what you own in this industry because sometimes ownership of creative material is not that easy to pin down. 

That is especially true of you are a song writer in addition to a composer, an arranger and a performer.  Each one of those hats you wear has its own laws and rules for royalty distribution, payment and legal ownership.  Today’s link is to a pretty boring little piece of writing but a crucial one for you to understand because it is about how the copyright laws apply to musicians.  We think it will be eye opening, not as boring as you think and if you give it some time, it will pay you well to have this kind of information in your brain as you go into the marketplace with your music.  So check it out.

http://www.harmony-central.com/Bands/copyright.txt

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In the music world’s ongoing struggle with piracy, copyright infringement and illegal sales of their material, some have come up with attack plans that work and others have come up with schemes (e.g. DRM) that are a total flop and make them a laughing stock.  The ones who have won are the ones who learned to beat the pirates at their own game. 

After all, what are the biggest drawbacks for a music loving consumer to buying a bootleg of a show or using a P2P file sharing?  There are several that legitimate musicians and use to derail pirates such as…

*        Bootlegs and downloads are frequently poor quality or not complete cutting off in the middle of a song.

*        A bootleg often has a lot of surface noise including the drunken ramblings of the guy making the copy.

*        Bootlegs are sometimes as or more expensive than a legit copy of a performance.

*        P2P file services are often infested with viruses and the user gets assaulted with nasty files full of pornography and violence.  This does not enhance the enjoyment of the music.

*        Music fans do have a conscience and when they know they are depriving the artists they enjoy from the pay for their work so they can continue to be professional musicians, they know they are shooting themselves in the foot and hurting the chances those musicians can continue to dedicate themselves to their art.

So music lovers are conflicted by wanting the benefits of bootlegs and file sharing but hating these things we just listed.  That is why finding ways that we, as legitimate artists can scratch that itch in the fans will be a win-win for everybody.  In the area of bootlegs, we have the technology now to create a quality video of each and every performance and be able to sell it to the crowd virtually on their way out of the hall. 

Sure, we like to control the amount of our own material that is out there.  So you can put some limits on the release of performances perhaps by shipping out the performance video to those that buy at the concert.  But what a great source of additional revenue for the band which can put some needed funds at your disposal during a long tour.  You can even build a supplemental page on your web page catalog with the videos of every show on a tour.  You may be surprised how many devotees buy every show. 

But the key advantage will be that you will take that revenue out of the pockets of the bootleggers and control the quality of the music your fans are enjoying.  By capturing that market back to yourself, you capture the advertising and additional marketing opportunities that come with it.  Plus you earn additional good will from your fans.  And that always pays off handsomely.

http://seattletimes.nwsource.com/html/musicnightlife/2003638511_official28.html

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Well this article signals that maybe there is an unsettled truce coming along at long last in the war against Napster.  The initial surge of legal attacks on Napster is kind of the shot that was heard around the world that the big music labels were about to go to war   And Napster was the first casualty of that war.  You always see that in the war movies.  It seems the first guys to charge out of the foxhole are the ones that get nailed.  So when Napster was the first charge of the new music industry, naturally they endured the first wave of lawsuits and reprisals from the big music industry businesses who thought nobody would dare to defy them.

So now it looks like the final settlements are being hashed out.  And did big business kill Napster and its evil friends?  Not even close.  If anything the more they tried to stomp out file sharing and music download services, dozens more sprung to life.  But give the big music industry legal teams some credit, they were brave enough to keep charging their clients inflated salaries to keep suing everybody that moved as though that was going to stop anything.

It didn’t even kill Napster which has reformed, found alliances and new ways of doing business and is thriving quite nicely thank you.  So other than alienating the music world and chasing more and more bands and fans away from them, the big record labels accomplished little and may have accelerated the revolution that has swept the music industry away from them.  There might be a lesson to be learned in all of this.  But we are betting that the big labels have not learned it.

http://www.reuters.com/article/industryNews/idUSN2639765320070326

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That is what the Terra Naomi decided when she took her alternate path to fame by fully exploiting the power of YouTube rather than letting the old music industry paths to success crush her life.  Good for you Terra and good for YouTube for opening doors to talented artists like Terra that were not there just a few years ago.

This article is an example of how technology is creating new institutions that are replacing the old ones almost as fast as we can document them.  This is a trend we are going to see grow, become more powerful and then finally solidify into the new institutional approach to the music industry.  The outcome will be a music communication and distribution system that is more sensitive to artists needs and more efficient at connecting artists and fans which is the job of the music industry in the first place.

Sure, there are a lot of kinks to work out of this kind of new way of doing business and that will be the work of music industry professionals.  And I expect we are going to see more incidents of the old music institutions absorbing or copying YouTube and other modern advances to try to get a piece of the pie.  This isn’t necessary a bad thing because it will force those old institutions to come into this century and learn to do business in the modern music world.  It is probably something they never would have done willingly on their own so it’s good to see the free market making the kind of corrections that were sorely needed in the music business.  It will also be very interesting to watch how all of this evolves over the next few years.

http://www.reuters.com/article/musicNews/idUSN2644948320070326

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