Friday, March 07, 2008

Public Attitudes on File Sharing

Jon Healey wrote a couple days ago on a conversation he had with a professor-friend of his, who reported some findings of an informal survey of his music business students:
[T]his year's respondents said they download music regularly through file-sharing networks and other unauthorized sources, while buying music from iTunes intermittently (64% said they did so 1-4 times per month, with 5% saying more than 5 times). They were also asked to rate on a scale of 1 to 7 how nervous they were about being punished for illegal downloading, with 1 being "not concerned" and 7 being "extremely concerned." Two-thirds answered with a 1 (43%) or a 2 (24%). Only 4% put down a 5 or 6, and none went all the way to 7.
Yesterday, I was speaking with a friend of mine who is a very successful producer. We were talking about the status of the industry - the wrongheadedness of the major labels and publishers, the lack of a *real* voice for songwriters and recording artists, and what profound and irreversible damage that can be caused by seemingly well-intentioned kids like these students.

This producer and I unfortunately had come to the same conclusion without previously knowing it. If filesharing continues to go unchecked then one of two things will happen:

(1) Artists will continue to record the music that they want but will no longer be able to do it professionally, because it will no longer be economically viable to record an album (no matter how good digital technology may become, a basement tape will always sound like a basement tape).

(2) Artists will have to get their recording income from a private source, meaning that they will continue to record music, but it'll be for McDonald's, Exxon, Coca-Cola, Wal-Mart, or whatever other corporation needs a little ditty to go with its latest feel-good commercial. It was bad enough with major labels recording mediocre songs because they'd sell a lot of records. Imagine how bad it'd be if the bulk of recorded music were recorded to sell a product?

File-sharing and free media proponents might think this is crazy but I guaran-damn-tee you its so real its scary. We're already heading there - the 360 deals are just a precursor, where the creative recording process is getting mixed up with merchandising and the like. Artists are already relying more and more on alternative income streams (always did, really, just now the labels are suckling on the same tit). Recording budgets are going down and who's to say that, once labels have a solid 360 deal, they stop tying the term to album cycles and start focusing on terms of years, meaning the artist could be tied to a deal but no longer releasing albums?

Pointing to public consumption patterns, especially those of students, as an indication of the way of the future, or of what the market must have, or of what is right or of what is inevitable, can be characterized as the tail wagging the dog. It is also extremely reminiscent of the cocaine craze of the '70s. Everybody knew it was illegal; everybody knew it was a drug. They got a guilty pleasure out of it; it made them feel good; they thought it was harmless. They saw no reason why they shouldn't be able to do it. And there were a LOT of people doing it, rather openly, too.

This went on for several years before it became clear that cocaine was not harmless. It cost a lot of people their lives. For many of those who survived, it robbed them of their families, their careers, and/or their life savings. What started out as a helluva lot of fun and totally socially acceptable turned out to be devastating.

We're falling into the same trap with music, albeit on a different level and with different injuries. The act is filesharing music - just like bumping a line every now and then, it's really no big deal. However, the more music a person shares does not empty his pocket, it empties that of the artist. The long-term impact is that those who don't pay for music feel that they are entitled to get music for free. The more people who engage in this activity, the fewer there are to pay for music.

Rather than the widespread personal destruction caused by cocaine, the destruction from filesharing is social and impacts everyone. If left unchecked, filehsaring will destroy the recorded music industry and leave us with the options identified above. By that time, it will be too late.

This is also not unlike our addiction to oil and other natural resources. We use and use and use without concern for the consequences. People willingly blind themselves to the truth because it is inconvenient, because they like the way things are and don't want to change them.

Just because everybody is doing it doesn't make it right. I doubt anyone would honestly say that we should throw open the doors to all of our natural resources and exploit them until they're gone . . . while it would be convenient for all of us today, it's not right. We have a duty to protect our resources, and have a duty to come up with ways to produce cleaner, renewable energy.

I don't know the solution to the music industry woes. However, I know that the "if you can't beat 'em, join 'em" mentality is downright stupid. I also think that anyone who advocates for free recorded music is foolish and better damn-well have a brilliant idea for what we should do the day after. The problem is that so many of these people are spectators, yelling out from the sidelines with instructions on how to do things; some have risen to the level of commentators. However, none of these people must take responsibility for what happens if people follow their suggestions and things go tragically wrong. We'll all be royally and irreversibly screwed while the talking heads will have moved on to the next new thing, leaving artists holding the bag.

Saturday, March 01, 2008

musicFIRST Press Release

In its entirety:
Three Days, Three Performance Right Questions

FOR IMMEDIATE RELEASE

February 25, 2008

CONTACT: Marty Machowsky

202-326-1702

martin.machowsky@edelman.com

WASHINGTON, D.C., February 25, 2008 – The musicFIRST (Fairness in Radio Starting Today) Coalition today released three questions that members of Congress should consider asking the National Association of Broadcasters (NAB) and corporate radio representatives during the industry’s three-day lobbyfest in Washington this week. Big radio’s number one priority is to defeat legislation to create a fair performance right on radio for recording artists, musicians and record labels.

“It’s time for the NAB and corporate radio to answer the tough questions about their refusal to pay artists and musicians,” said Doyle Bartlett, executive director of the musicFIRST Coalition. “AM and FM music radio stations earn $16 billion each year in advertising revenue. But not a single penny goes to the artists and musicians whose creativity, whose heart, whose soul and whose passion brings to life the music that listeners tune in to hear.”

“There are many questions that the NAB and corporate radio lobbyists can not possibly answer with a clear conscious,” Bartlett said. “Here are just three:”

1. How can you justify taking someone’s intellectual property and making $16 billion in annual advertising revenue off that property without compensating the creators and owners of the property? This runs against all basic notions of fairness and respect. You might expect this is places like Iran, North Korea and China where there also is no performance right on radio, but not in the United States.

2. Why do you deserve a competitive advantage in the music marketplace? Artists and musicians are paid when their music is broadcast on satellite radio, Internet radio and digital music services delivered through satellite and cable television. You pay them when you stream your broadcast signal online, or in the future, through Internet streaming on mobile phones. And artists and musicians are compensated in every other country that is a member of the Organisation of Economic Co-Operation and Development (OECD) – countries like the United Kingdom, Canada, Japan, France, Spain, Belgium, Austria, Germany and Greece.

3. Which of your leaders is right: David Rehr, president of NAB, or W. Russell Withers, head of the Withers Broadcasting Group and chairman of the NAB Radio Board? Mr. Rehr calls paying artists for their work product a “performance tax.” Really, the loophole in copyright law he is trying to salvage is merely an elaborate payment avoidance scheme. On the other hand, when Mr. Withers was questioned before the Senate Commerce Committee during a hearing last year, he said, “I disagree with ‘performance tax.’ It’s a performance fee.” What is wrong with paying a fee for product that makes you money?

For decades AM and FM broadcasters have enjoyed an exemption from copyright law. Senators Patrick Leahy (D-VT) and Orrin Hatch (R-UT) and Representatives Howard Berman (D-CA) and Darrell Issa (R-CA) introduced the Performance Rights Act of 2007 (S. 2500 and H.R. 4789 ). The bills will close the loophole in copyright law and ensure that no radio platform is given a competitive edge over another and that all must pay a fair performance royalty to artists.

Creation of a fair performance right would compensate the performers, background singers, studio musicians and copyright holders for their talent and hard work when their recordings are broadcast on AM and FM radio.

NAB is hosting its annual State Leadership Conference in Washington, D.C. The conference runs three days, Monday, February 25th through Wednesday, February 27th. According to the NAB web site, the conference is “an annual event where broadcasters hear from prominent federal policymakers and meet with legislators to discuss issues that affect your business. The conference provides a unique platform to impact decisions made daily in the halls of Congress that can shape the future of the broadcast business for 2008 and beyond.”

###

People who love music understand that creativity, talent and hard work are required to bring it to life. The goal of the musicFIRST (Fairness in Radio Starting Today) Coalition is to ensure that aspiring performers, local musicians and well-known artists are compensated for their music when it is played both today and in the future. Of all the ways we listen to music, corporate radio is the only one that receives special treatment. Big radio has a free pass to play music – refusing to pay even a fraction of a penny to the performers that brought it to life. The musicFIRST (Fairness in Radio Starting Today) Coalition is committed to making sure everyone, from up-and-coming artists to our favorites from years-ago, is guaranteed Fair Pay for Air Play. For more information on the musicFIRST (Fairness in Radio Starting Today) Coalition please visit www.musicFIRSTcoalition.org.

Supporting organizations include: American Association of Independent Music (A2IM), American Federation of Musicians (AFM), American Federation of Television and Radio Artists (AFTRA), Christian Music Trade Association (CMTA), Music Managers Forum - USA (MMF- USA), The Latin Recording Academy, The Recording Academy, The Rhythm & Blues Foundation, Inc, Recording Artists’ Coalition (RAC), Recording Industry Association of America (RIAA), Society of Singers, SoundExchange and Vocal Group Hall of Fame.

Thursday, February 28, 2008

NAB Still Trying to Deceive

Unbelievable - Radio Ink reported yesterday on the National Association of Broadcaster's (NAB) new ad that is scheduled to run in several Capitol Hill publications. According to the article, the ad includes:
Free local radio provides valuable exposure and promotion to record labels and artists simply by playing their songs ... for free. But what are the artists getting from their record labels? Not much, according to a recent lawsuit filed by more than a dozen artists against the world's largest label, Universal Music.
Talking about misdirection bordering on negligent manipulation. Puffery, such as the allegations that the "performance tax" will put some radio stations out of business, is to be expected from an activist group. However, for the love of all things, what in the world does an artist's record royalty have to do with a performance royalty?! If anything, this is an argument in support of performance royalties, i.e., we can't trust labels to properly account to their artists for record sales, so recording artists should get paid a performance royalty from third-party organizations just like their songwriting counterparts (and like recording artists themselves get from online radio).

The NAB illustrates the lunacy of their position every time they talk about it. They, the representatives of a highly consolidated industry with a reprehensible record, are trying to play a sympathy card. They portray radio conglomerates as a social good because they don't charge the public to listen to their stations, but NAB fails to mention the billions of dollars made off of advertisements. They also fail to mention how insignificant a sound recording royalty would likely be to most operators' bottom lines.

I hope Congress doesn't let Clear Channel, Cumulus and their cohorts convince them that terrestrial radio (still) deserves special consideration; if the arguments that are gaining traction in Washington are as ridiculous as those in NAB's ad, the artists are going to be in serious trouble.

Tuesday, February 19, 2008

Universal Sued for Failure to Properly Account to Artists

AP says Universal is getting hit with a $6.07 million lawsuit for failure to properly account to a host of artists. According to the article, plaintiffs include Patti Page, and the estates of Count Basie, Sarah Vaughan, Woody Herman, Les Brown, Benny Goodman and the Mills Brothers.

Could It Be Comcast?

A couple of days ago, I wrote about the major labels' desire to employ internet service providers as their own private police force. For its part, Comcast no longer denies its throttling of internet traffic of suspected file sharers, and has come out to say that it has a duty to help cut off the flow of file sharing (though its justification is that file-sharing hogs the pipes and reduces transfer speeds for other customers).

This was in the back of my mind when I went to PirateBay to look for Windows Media Center (I promise, I only wanted to test it to see if it was any better than Nero, which I already have, for use in a home theater PC - damn, I'm a hypocrite). However, I noticed that it took a painfully long time for the main page to load. Once I refreshed, it came up pretty quickly. I then executed a search, and it hung again for about a minute. After a refresh, it seemed to load fine. These and several other problems got me to thinking - was Comcast trying to block all traffic with the domain, thepiratebay.org? Whatever was going on, it was enough to make me give up and go to bed. I'm sticking with Nero.

I've certainly made no secret of my disdain for companies who profit by giving away the creative works of others and while my sympathies are stronger with the music industry, I feel some for the software community as well (though programmers can always get a day job working their craft, while an artist's day job generally involves uttering the words, "Smoking or non-smoking?"). However, I totally disagree with any enforcement action against average citizens, which is precisely what Comcast is doing.

It would truly be freakish if an ISP could act as an all-seeing, all-knowing gatekeeper, preventing average joes from walking into that burlesque house of trading. We've been willing to lose some anonymity by taking our lives online but I'm not so sure that anyone is ready to be told where they can and cannot go, especially by a private corporation.

For some reason, it would "feel" better if lawmakers were to devise a way to make the torrent trackers go away through some legislative remedy - if officials shut a file sharer down, a lot of people would be upset, but eventually they'd get over it and either abandon the practice or hit the new spot. However, to be denied access to something just because an ISP says you can't go there leaves one feeling a bit screwed.