The Consumer (R)evolution
Note: this blog item has nothing to do with (RED)
Paul McGuinness is going on the record to say that illegal downloaders should have their ISPs banned if they’re found guilty of stealing music, mentioning that the songwriters and musicians are the victims due to the lack of royalties from music no longer being paid for. He is encouraging people like Steve Jobs to work on solving the conundrum of keeping people from illegally sharing music/movies, etc. Of course McGuinness would be concerned about the royalties. U2 receive the highest percentage of royalties out of anyone in the music industry (give or take) at about 28% - so it hits the wallet super hard.
Over the years, it’s been very much a “us vs. them” mentality when it comes to this issue. If only the people would not steal the music, so that the artists get paid their royalty, this wouldn’t be a problem. But the problem isn’t *just* the person downloading without paying that’s causing this downward spiral. Let me explain:
First, let’s focus on what has happened in the recording industry - the business model of developing artists went out the window over a decade ago. So, a lot of the music is nothing more than mere pablum where “artists” are nothing more than one-hit wonders that sell a song then fade into oblivion. This does not encourage people to go out and buy the music - you know that the other 9 songs on the CD (give or take) are crap if the radio station is *only* playing that one song from an artist. Also, due to the consolidation of the major labels, less choice is available for the average listener - and indie labels are running low-budget as it is as they face more challenges to get the music heard.
Second, iTunes allows you to purchase just the song in most cases so that you don’t have to buy the whole album. Sure, when all was available was the 7″ single from a record store (remember them?), you’d get a B-side to enjoy for the same 99-cents (or $1.99 depending on if the single was currently on the top 40 list). If you liked what you heard, you’d go back and buy the next single - or the whole album. I’d be interested in finding out how many people return to iTunes to purchase additional songs (or the whole album) after buying the 1 song they want. For me, what iTunes has turned into is a place where I just get that one song that I really really like and that’s it. Prior to iTunes, if I really liked that song and the single was not available, I would have shelled out the big bucks to buy the entire CD. My CD library is chock-full of artists where I liked just one song, but I was forced to buy the entire CD. iTunes is really a double-edged sword in this regard.
Third, remember when you bought blank cassette tapes and recorded the radio to get a song you liked? Or, shared a “mix tape” or “mix CD” with friends or family members? Do you recall the music industry being so Orwellian Big Brother-like about this - going after people and suing them for thousands of dollars (or more), or threatening personal financial ruin in the way they are going after people now? Exactly - me neither. It’s gotten to the point where bullying the consumer is backfiring - enforcement of the law is important, but at least in the US, you’re innocent until you’re proven guilty and you have the right to defend yourself. I recall when I was working at MIT, there were quite a few students who were accused of illegal downloading - and these students really were not able to launch a defense. They were told to either pay the fine of thousands of dollars or be forced to pay a fine of tens of thousands of dollars. There was no defense for them - it was along the lines of “your IP address had x number of songs” - they personally may not have downloaded them…could have been someone else, but the owner of the IP address was held responsible. In some cases, people did not have firewalls or other safeguards on their computer and someone elsewhere in the world was able to gain access to their computer. In short, this bullying practice by the music industry doesn’t do much to win friends and influence people.
Fourth, the music industry should be more fair to the artists they have under contract. Sure - U2 has a sweet royalty deal where they own all their songs…but other artists should be offered better deals than what they’re given. Does McGuinness seriously think that artists are losing money solely because people are illegally downloading? More artists need wiley managers like McGuinness to advocate for them. And…if the music industry provided better support for the artists, they’d find that there would be more gems to mine that need a bit of time to fully shine. It takes a lot of pressure (and time) to turn coal into a diamond. So, instead of investing in a here-today, gone in a minute artists, make an investment in someone who can provide you with longevity and who has the talent to write their own material. Quality always wins out.
It’s easy to point a finger at the consumer and blame them for not playing by the rules - but as the industry as evolved, it’s been harder for the consumer. You buy the song, and you should be able to listen to it on any computer you own or on any mp3 player you own - but that’s not how it’s set up in some cases where it’s authorized for that one player. That’s not how CDs or cassettes work. So, there’s been a revolution among the consumer to try to use what they paid for - and in some cases, this code or technology led to people abusing it. I believe it’s this group of abusers McGuinness is talking about. Ultimately, there should be a better solution that allows for cooperation among the consumer and the industry instead of such heavy-handed tactics.
I’m not saying the artist should suffer - the music industry should stop being behind the 8-ball. The music industry (and not the artist’s manager) should be advocating for Steve Jobs instead of sending their industy legal hounds after college students who are already in debt for more money than they’ll be able to repay in the next decade.
Erika said,
January 29, 2008 @ 1:40 pm
Amen! Couldn’t have said it better myself.
LT23 said,
January 29, 2008 @ 2:09 pm
I believe that if an artist wants me to buy his/her entire album, s/he should work hard for a great album. Labels should pay them accordingly. If I don’t do my best at work, guess what… I wont get a raise.
Labels are going after an increased profit every year. They are greedy and looking for the artist to take the hit, while they continue to get their goals in profitability.
And Paul McGuinness should shut up and keep managing the best (once rebel) band in the world.
Andrea said,
January 29, 2008 @ 7:07 pm
One thing that people like Paul McGuinness always fail to consider is how many albums they have sold *because* of file sharing. I can honestly say that I have bought most of my cds (hundreds of cds at that!) because I downloaded a couple of songs, decided I loved the artist, then went and bought all their albums. It’s been a lot harder for me to discover good music since the good old Napster days, since I refuse to listen to mainstream radio…I know the band is aware of this phenomenon, because Bono once mentioned in an interview that sales of their old albums increased when Napster was popular, because college kids were rediscovering their back catalogue. It’s one-hit-wonders that have to worry, because no one wants to buy their albums in the first place.
Chris said,
January 30, 2008 @ 8:49 am
I enjoyed your commentary on the current state of the music (or rather in my opinion the recording) industry and couldn’t have said it better. I also had no idea U2’s royalty rate was as high as the upper twentieth percentile (wow) cudos to McGuinness for some excellent negotiating skills! Unfortunatley conservative minded institutions, like the recording industry, are always concerned with status quo mantainence and are very reluctant to evolve.
The clearest indication of this was when Napster was popular among college students such as myself in ‘99-’00, and the recording industry reacted by using the one institution that dictates status quo -the law- as a means to attempt to reassert its control over its market place, market share, and its target demographic. This coupled with, as you mentioned, the preying upon the legal ignorance of college students by sending them letters demanding they pay “X number of dollars or else”, is ludicrous and smacks of the hubris of the recording industry concerning its consumers. This latter point is a prime example of the recording industry more likely than not, skirting around the procedural process of the law.
To my knowledge (and I could be mistaken regaring this), the record companies were sending college students demand letters, as opposed to legally bound complaints filed in a court. The college student sees this and of course freaks out and antes up the cash. Again, just one of many examples of the bullying practices incorporated by conservative institutions, in their attempts to maintain their status quo. Related to this idea of status quo maintanence, people should go to Nine Inch Nails’ website, and go to Trent’s posting (I forgot the exact date, but its January of this year, and anyways there should be an archive somewhere on the site). There is a link to an excellent article summarizing the wholly exploitative nature of record companies towards artists. After reading it, I’m in awe that more artists haven’t at least attempted to legally challenge their relationships with record companies.
As for iTunes, I also agree that it is a double edged sword. In the last few years, I’ve basically stopped buying new artists and only follow (and buy) new albums from artists I currently enjoy (U2, NIN, and others). Some of this is due to my interests shifting, and that these interests have just aged out of the recording industry’s target demographic. I use iTunes to buy one or two songs from artists I don’t have (or guilty pleasure bands) and that’s it. I don’t think the recording industry will be able to get ahead of the 8 ball again, in my opinion too much time has passed, and more importantly too much damage has been done to the trust of the consumer (and the artist), and both groups are waking up to this fact. Hopefully I’m wrong, but time will tell. Again great post and I look forward to hearing more.
jon said,
January 31, 2008 @ 8:31 am
Paul McGuiness has a lot of nerve sometimes - he’s talking just like all the industry pundits that U2’s grown to hate over the years.
Now, we can either try to ban everyone who fileshares - of which there’s millions upon millions, of which make up the primary music buying audience as well, of which a lot probably listen to U2, and most of whom will never buy or listen to U2 again once they’ve been fined and had their ISP banned.
What musicians and managers and the industry should be focusing on is ways to make the music WORTH BUYING. Radiohead gave it away for whatever the consumer wanted to pay, and they came out alright, but when the time came to sell it in the stores, they came out with one of the more beautiful album packages I’ve seen in years. The album artwork and conceptual space behind HTDAAB was nothing special at all - the special edition was worth it, but it was also way over priced. Massively overpriced. There’s still plenty of good music coming out, and its not as though the marketplace has any more or less 1 hit wonders than there’s been at any other time. No one outside of a diehard U2 fan is going to be concerned about U2’s financial livelihood, and I am a diehard and I couldn’t care less. U2 is a cash cow already, and as much as I love them and adore their live show, they have to stop saying stupid things that will alienate their fans or potential fans, get back in the studio, stop judging, and start writing some excellent music again. Then when THAT album comes out, McGuiness can complain about the band getting ripped off. And maybe I’ll care, considering that they’ll actually be adding current music to the marketplace.
sirensong said,
January 31, 2008 @ 9:32 am
well put, Jon. The music industry has changed greatly. The ipod has changed the consumer (some more than others) to be more music literate and more selective about the artists’ work they will pay for. Musicians’ survival rate is only going to be prolonged by quality work delivered with a sort of bonding connection with their audience. McGuiness is a great manager. U2 are very lucky to have him. He has every right to his opinion. However, his statements may’ve been better left for a more private discussion. The market has changed. No band can afford to potentially publicly offend consumers of its product. This just does not give the impression of the hungry band we all want, it just looks greedy.
David said,
January 31, 2008 @ 10:37 pm
I have been a LOYAL U2 fan since I was a teenager and into my adult life. I’m well into my 40’s now. I have seen at least 16 live U2 shows, starting with the Amnesty Int’l Conspiracy of Hope Tour in 1986 and ever tour since multiple times. I bought them on Vinyl, tape, CD in the 80’s and 90’s Bought the songs again a couple years ago when I bought a u2 Ipod and the entire u2 song catalog availble on itunes. Not counting the books and other merchandise I have spent THOUSANDS of dollars on my favortie band since the 80’s.
I Also on occassion download u2 songs from p2p services. Even though I already own them in some format, i seek bootlegs, live versions etc……sorry to say this but after reading Paul McGuinness speech……I now think that he and U2 have their heads so far up their own Greedy Arses…..that I am done with them indefinitely. I work in Technology. What McGuinness was spewing in that speech was LUDICROUS and one big pile of Marketing crap. “The end of the song writer” he says? Sorry Mr. Guiness You, Bono, Edge, Adam, Larry “Lars Ulrich” Mullen, jr. and the rest of the U2 Corportate, Inc. completely lack integrity. Won’t be buying your music anymore when it comes out in October 2008. You’ve lost a loyal “paying customer”
Scott said,
February 1, 2008 @ 6:14 pm
Music downloading goes well beyond people occasionally stealing a track or 2. Visit any torrent aggregator and you’ll find entire discographies neatly packaged for download. Download every Bob Dylan album, in high quality bit-rate, with 1 press of the button, and have it it hours. These type files usually have 200, 300, even 400 leechers stealing it at once. It’s disgusting.
The idea that it’s ok to steal from certain artists cause they’re “rich” is simply unethical. Stealing intellectual property is just as wrong as stealing physical property, no matter what the financial standing of the victim.
The poor tactics of the RIAA have gotten in the way of the fact that downloaders are just as greedy and selfish as the record companies themselves. It’s the cop arresting a legitimate criminal, then going overboard and beating the snot out of him.
The music business will never be able to create a new model when it’s prime competition offers the exact same product for free.