Related link: http://www.usatoday.com/life/music/news/2005-03-09-internet-jukebox_x.htm
File-sharing advocates often argue that they're furthering a grassroots rebellion against the corrupt corporate music machine. That sounds good, but if it's true, why do the tops of the traditional radio charts and the download/file-sharing charts feature the same artists? For example, see the comparison done recently by USA Today, at the end of an article called "Music Fans Reach For The Stars". Furthermore, the movement across charts seems to be in one direction only, from the traditional market to downloading. I don't know if there's been even one artist from the digital grass roots to hit the traditional top 40. (Garageband.com and its partners are doing their best with Geoff Byrd, and I hope they succeed).
I think that raises this question: Is file-sharing able to generate a viable business from the bottom up, without feeding off the marketing efforts of the major media companies?
Below the top 40 or so, there are a lot of success stories about artists discovered and promoted through word of mouth, such as My Chemical Romance, also cited in the USA Today story. But below the top 40, there's not much money being made.
Many fans have an exaggerated idea of how much money recording artists make -- and in the past most artists have done little to disabuse them. Certainly the artists at the very top -- the ones who repeatedly top the charts and sell multi-platinum -- are doing great (although there's no one in the music business who does oil tycoon great or software billionaire great). But below the top 10 or so, income from airplay drops rapidly from six or seven figures to five, to four, to three, and then sampling error takes it to zero pretty fast. In the case of sales income, if an album sells platinum or below, most performers end up just breaking even, or actually owing future royalties to the record company. Many make most of their money from touring and merchandise sales, areas that record companies -- trying to protect their margins against file-sharing -- are now beginning to cut in on. Touring and merchandise for a cult band is not exactly a gold mine.
Maybe it's just early days, and we need to allow more time for the masses to wake up and throw off their mental shackles. But if a file-sharing backed artist does crack the traditional Top 40 and make some money, that success will depend on the traditional Top 40 still existing, i.e. it will depend on old-fashioned airplay and sales royalties being collected. If on the other hand file-sharing fully takes over and recorded music becomes essentially free, I worry that that artist is going to be poor.
Is there a file-sharing business model that could generate real money -- for the artists, that is?
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All this discussion is good but if we let Bill Gates and multimedia drive the marketplace where will musicians be. Really great musicians are just lost in the whirlwind of media glitz and worse , musician wannabees. Sure the internet has leveled the playing field to let anybody record, but should they? We are recording great stuff but won't let it out until the time is right and to the countries that will appreciate it. In your face.
Long Tail
Ah, okay. I was responding to a different question, both because I had not fully realized your actual one as well as because I was not replying to the original post.
You are, of course, aware that music is already a cottage industry for anyone but a few percent of those at the top.
As far as celebrity is concerned, it will likely always be required at least on some level. People are drawn to music that speaks to them. That is likelier to happen with a piece when they know there are iridescent personalities behind it. But celebrity should not require mass marketing: appeal can be fabricated, but it doesn’t necessarily have to be. It’s attractive to fabricate it if you have the heaps of money necessary and you are looking for a predictable bottom line. But if your interest is promoting good music (as it probably would be for the aforementioned music critic webloggers), then it’s probably much easier to find a musician with an inately interesting personality. Most of them who have the chops to do their art professionally are probably already at least moderately equipped in this area.
As for pure filesharing, I don’t know if it’s a viable model. It just might in fact be, if you consider that webcomic cartoonists already give the backbone of their art away, and can make a living on selling fan merch like t-shirts, buttons, etc if they’re any good. Of course, they need to get reasonably big in order to viably live off of this, and the model lends itself visual art, which can be printed on things, much better than it lends itself to music.
The answer is possibly in a mixture of models, where some (potentially a substantial portion) of the content is available for free, while some of it is available on a subscriber-only or otherwise for-pay-only model, padded with a good helping of fan merch. Like with web cartoonists, that would obviously require a lot of stamina producing consistently decent work for a long while before a musician attracts enough attention to be able to way to sustain himself that way.
I've been reading your final scenario in John Barnes' _Thousans Cultures_ series
Thanks for the tip, I'm going to check that out.
I've been reading your final scenario in John Barnes' _Thousans Cultures_ series
A scenario much like it, at least, where humans are somewhat superfluous to an economy run by AIs, human thought in science and technology is outclassed by AIs, and culture is all that's left.
Barnes is a wonderful, often depressing writer. A Million Open Doors and Earth Made of Glass, the first two books in that series, are quite good. (Earth Made of Glass is much like a Graham Greene novel, which from me is very high praise.) He may be writing himself into a corner with The Merchants of Souls, which I thought not as good. There are two more to come.
Album sales
You're right that in the traditional record industry artists get a very bad deal -- essentially funding everything that the record company does on their behalf out of their own royalties -- and credited against expenses at about a dime on the dollar, so in very rough terms a gross of $10 million dollars might pay off $1 million of expenses, meaning the artist can now start earning profits from 0 and the company has $9 million. Of course, releasing reecords is so risky that company has to apply that extremely outsized margin to payiong off losses from the great majority of its other releases.
I like the flat rate system too -- seems technically feasible and fair. But I'm not sure I believe yet that it's going to happen because it would require so much cooperation among corporations and governments around the world. And meanwhile sites like allofmp3.com pop up. They're operating out of Russia, where apparently they're legal, and offering every CD they can get their hands on for pennies, including the Beatles and other artists whose rights-holders have not given their permission for online distribution. This kind of thing might make rules covering use of intellectual property as effective as laws against adultery.
Long Tail
I've been exploring that model hands-on for the past year or so through producing the independent country artist Bo Billy. I agree with all your points, but here are the things that I'm trying to figure out now:
- If pure file-sharing works, recorded music will become free. So having a lot of people download or stream their music won't do artists or songwriters much good. What will replace that revenue, if anything? One model is that everybody goes back to relying on live performance. But except at the celebrity level, live performance of original music pays little or nothing -- it too is a commodity product. And many or most songwriters don't play live in any case, as being a good songwriter does not necessarily make you a good performer. Some bloggers are demonstrating that you can give your content away for free and make money from other services or just from advertising. Maybe some musicians can make real money that way, but I wonder if they have to achieve celebrity first, and in popular culture celebrity is different from merit, which leads me to...
- Is celebrity required in order to generate significant money for an artist? I've started to explore the idea of garageband.com and similar sites as meritocracies. I'm a fan of garageband.com but I also question whether most fans respond primarily to merit. I think an artist (or in some cases the people producing the artist) needs to have some merit to attract a large following, but there also has to be mystique and sex appeal of some sort. Even Bob Dylan is not just a very good songwriter, he's fascinating as a personality.
- Does celebrity require mass media marketing, meaning that it requires the traditional music industry model? Personally I'd be happy to see the manipulative, mindless-consumption-driving form of celebrity go away. I'm just wrestling with what if anything replaces it, or do almost all musicians end up in a cottage industry, making about as much money as, gulp, poets.
Are songwriters the big bands of the twenty-first century?
I love Bob Wills!
Yes, I think it may be inevitable that songwriters lose because of the change in the economics as driven by technology. I don't worry so much about the natural change of tastes - change can be good and necessary for art & culture, and I don't think we should all be forced to pay for things we don't want, by say legislating price supports for big band music (much as I personally like it).
But I think technology-driven change, especially as it happens faster and with less consideration of its effects, can have a tendency to seek the optimum solution for technology, not necessarily humans. And I would include an efficient economy under the heading of Technology.
Pursuing one possible scenario to an extreme, one can imagine a perfectly efficient economy where everything is done by robots, including the generation of music to entertain the superfluous humans... Gee I wish that sounded more far-fetched...
Album sales
Something like 90% of all artists signed to a major label make little or no money from album sales. Artists in this situation make their money from touring, from sales of merchandise or from licensing their music for other uses.
Unless artists can take the reins and do their own distribution, either online or in traditional formats, it is almost impossible to make any money through a major label from album sales.
This is why I support a flat-rate royalty system like the one talked about here: http://www.theregister.co.uk/2004/12/28/fisher_promises_to_keep
It's the only way I can see artists actually being fairly reimbursed for sales. They certainly don't get any benefit of album sales now under the existing system which the RIAA is there only to protect, because it is what generates the major labels amazing profits - which have NOT declined in recent years.
Are songwriters the big bands of the twenty-first century?
As the economics of touring and recording changed in the forties and fifties, the big band died.
A pity, because some of those bands (a href="http://www.google.com/search?hl=en&q=%22Bob+Wills%22+%22Texas+Playboys%22&btnG=Google+Search">this one is my favorite--there are others) were producing some of the best music of the time.
It wasn't anything artistically wrong with what those bands were producing, and it wasn't that people didn't want to hear them and see them, but that it was no longer feasible for them to tour.
The stand-alone songwriter may be next.
There are winners and losers in almost every change (Pareto-optimal situations are much rarer in practice than in theory). There's both a technical and a political aspect to that. Technology forces some change, but the system we end up with for music distribution will be shaped by decisions made by humans--in the United States, that means citizens via courts and legislatures.
Long Tail
That depends on the distance between audience and artist. An album that only sells 500 copies, ever, for 10 bucks a pop, would still be a moderately worthwhile investment of effort if all of the 5k it makes go into the pockets of those involved.
In my opinion, it's the middle men whose role will actually change.
The distributor's role as the owner of the distribution channel will completely evaporate. It actually already has, it's just that noone noticed yet. Broadband makes this possible: a band directly selling their music in digital form on the internet no longer need distribution in the traditional sense.
The distributor's role as a promotor will eventually be commoditized. To begin with, good musicians will not need to promote their music, considering how we see weblogs sometimes burst from obscurity into the 10,000-readers-per-article stage lights sparked by just two or three links from oft-read webloggers.[1] Which brings us to the commoditization of promotion in form of phenomenon that is already emerging: music weblogs that critique music and find a following of readers who share the critic's taste.
Obviously, a synergy can and will exist here: popular critics will have a lot of pull over which musicians they put in the spotlight, and musicians will probably want to promote themselves to the popular critics.
Of course, that's just same old music industry as it already is, except that the power will be distributed (no pun intended) over a lot more hands, the barriers to entry will be lower, it will be easier to make a buck by sitting just about anywhere on the long tail, but it will get harder to get really big.
[1] Of course, romanticized world views aside, that does not happen overnight. It takes a history of consistent quality to get noticed, and the initial explosion caused by getting noticed is but a whimper compared to the audience that builds up at a comparatively unremarkable pace in the months and years that follow. So you need a lot of stamina either way.
(Since this is already much longer than what I set out for, I'll put additional quotations and thoughts in an edited version to be posted on my weblog.)
Long Tail
Interesting point, but my concern is that only the distributor makes money from the long tail, by being able to aggregate thousands of transactions, and, assuming the music is free, charging a fee for some related service like advertising. Meanwhile the individual artists, wherever they are on the tail, would see little or nothing and would have to rely on what they can get from live performances, plus maybe... giving lessons? Worse off would be professional songwriters, few of whom have a live performance career, and who make their living from peforming rights royalties (radio) and mechanical royalties (sales).
simple...
"That sounds good, but if it's true, why do the tops of the traditional radio charts and the download/file-sharing charts feature the same artists"
Because their "rebellion" exists of stealing from those "evil corporations" and using their Kazaa and similar filestealing applications to download the latest CDs wholesale instead of buying them.
It's no fun downloading music from an artist noone's ever heard of and having to pay for it from a grassroots network if you can have the latest top 40 albums for free.
Long Tail
But, But, But, Music is a long tail business. And so is P2P download distribution.
Which raises some interesting questions. For P2P downloads:-
- How much is music that is completely unavailable because they're deleted from catalogue or never released on CD
- How much is back catalogue that's only available from Amazon and then on 3 weeks delay
- How much is not available via iTMS or the other so called legal download sites.
My gut feel is that the numbers for all these both in numbers of tracks and numbers of downloads are huge. And given the sheer size of the P2P download market, they probably dwarf the paid download volumes by an order of magnitude at least.
If we all just continue to focus on the top 1% of the power curve, we'll miss the real picture.