Way back when I noted that NPR had gone to war against the recording industry, I commented that there is no greater enemy of the music industry than the music industry. You would think they hated music, the way they run their business. After all, what other justification could there be for bending over backwards to keep music from being heard by consumers?
In the months since I wrote that article, I have been reading many articles that quote representatives of SoundExchange, the collection arm of the RIAA, talking about how these new rates are “for the artists”. That is bull. These new rates are to create new revenue streams for the copyright holders — the labels. The artists are not going to see appreciably more money if higher rates go into effect. Artists never win. To do so would upset the balance of the universe.
Mostly because increased fees are going to knock out a whole tier of discovery possibilities. Consumers will have fewer choices when it comes to finding new music — gone, after all, are record stores such as Tower; gone, after all, are radio stations that offer anything in the way of diversity — and the artists will suffer. Convincing consumers to give an entire album’s worth of music a chance is a tough sell for the labels: they did themselves in by packaging a whole bunch of crappy music around one or two “hit” singles. Why buy the cow when the milk is so consistently sour?
Singles once again rule because singles are trustworthy. You can safely buy a single and know for sure what you’re getting. You cannot buy a full CD with that same assurance. There is no guarantee. There never was, if truth be told, but the music industry has deepened consumer cynicism with its all-out embrace of the hit-driven model. They thought they had the suckers lined up, but then the suckers decided that they didn’t want to play that game.
Since the late nineties — nearly ten years now — the music industry has been desperately seeking a way to recapture lost glory. The goal, the industry believes, is to figure out a way to sell full albums rather than singles. Hopefully, these sales will come in the form of physical CDs. After all, so much of the industry’s profitability model rests on the vagueries of distribution sleight-of-hand.
Late Friday, SoundExchange agreed not to enforce the new royalty rates slated to go in effect yesterday. Negotiations, largely spurred by millions of consumers who contacted their Representatives, have begun anew. Still, SoundExchange is insisting on retroactive rates and per-channel caps of $500. Granted, that’s a starting point in the negotiation process, but when you’re creating an entirely new revenue stream out of thin air — and in many ways, that is what the higher Internet/satellite royalty rates are — it’s an interesting gambit.
It also makes me wonder what the music industry’s back-up plan might be. If a large number of Internet radio stations shut down because they simply cannot afford to exist, how does the music industry plan to fill the vacuum? How will consumers — who, despite being universally treated as criminal elements by the music industry — even find interesting new music? Is it really worthwhile to continue to embrace a broken model, a model that cannot be repaired?
The music industry thinks so. Consumers? They’ve moved on. They defy the industry by buying singles, trading tracks, thumbing their noses at the so-called powers that be. People who love music and listen to music are light years removed from the people who sell music, a different animal than people who make music.
I am reminded that in the past several weeks Prince has angered the entire music industry by giving away his latest CD. Prince, as you might imagine, is raking in the big bucks by performing live. He made the calculation to give away the CD in hopes of other returns. This angers both labels (“how dare he mess with our model!”) and retailers (“he’d better not darken our doorways again”). Granted, not every artist can afford to do this, but, hey, maybe more artists should consider the story of Clap Your Hands, Say Yeah (first album) and realize that sometimes the indie way beats out the establishment way.
Oddly, Prince fans are not angered. Not a single one of them, to my knowledge, has risen up in protest at this audacious maneuver. Nobody is saying, “But, but, you’re taking money away from the CEO’s of the world.” And outrageously high ticket prices will create a world of haves and have nots. It’s a calculated risk, and, let’s be honest, concert tickets have been obscenely expensive for years now. At least Prince is a proven commodity, still in his prime. At least you know he is the original Prince, not someone’s kid filling in on the drums.
As SoundExchange strives to protect the artist, they seem willfully ignorant of how the economics of the music industry work. Very few artists “make money” from record sales.
It remains incumbent upon music fans to put pressure on Congress to negotiate a fair agreement between webcasters and SoundExchange. Start with the Future of Music Coalition and Representative Edward Markey. You might think that your voice doesn’t matter, but it does.