The Age of Music Piracy Is Officially Over
wired.com
wired.com
And to be honest, even then I probably wouldn't pay for music. I wlll pay for t-shirts, stickers, or concert tickets, but not songs these artists couldn't give away when they were first starting out. One of the most enduring examples of hypocrisy in this whole music pirating debacle will be Metallica raging against the very practice that made them popular in the first place - people dubbing tapes of their music for their friends.
The only thing that makes music worth anything is popularity and the only way to make music popular is to give it away for free in the beginning. Given that there's an infinite supply, how does it make any sense that it can be worthless in one instant and $1 a pop in another? This insanity needs to stop, and I guarantee that it will some day. The easier it becomes to produce and promote music, games, movies, software, etc, the harder and harder it is going to be to justify charging anything for it.
There is a reason so many bands continue touring year after year other than the want to play live, that is how they get paid.
There is starting to be a rise in indie and self published bands through many online services (one of the first big ones was cdbaby, which a hner (sivers I believe) made and sold) and other things which may be the life of new bands, pop music and such will probably be burdened forever with large record labels.
It used to be that record labels provided powerful marketing power in addition to the initial cash bribe, but these days superstars are born on myspace and YouTube. I think record labels will be replaced be smaller, more agile PR/management teams who understand how to nurture viral growth and also manage the business side of making it in the music business.
* Access to top-notch facilities
* Access to top-notch talent (recording/sound engineers, etc)
The problem was that in the fine print, they were not paying for all of this. You (the artist) were. They give you a huge loan with onerous terms with the expectation that only ~2% of artists will ever be able to make good on the loan. They loan you money, knowing that you'll never be able to make good on it.
All of this is done in a fashion that convinces you that it's "no big deal." "These are the same terms that Nine Inch Nails got, so they're good enough for you!" The difference is that NIN was able to sell enough records to make good on the loan; there is no guarantee that you (the artist) will be able to.
I've spoken with a lot of bands, and most of them know they're going to get fucked by labels, yet still sign, because they think it's still necessary to get ahead in the world. They think it's the only way do what they love every day, all day: making music.
Who can blame them? That's how it's been for fifty years...
They also have a really nice HTML5 music player, and let you download things in FLAC (or almost any other format you might imagine). I spent probably about $100 on music last year total, and I've easily spent 3-4x that this year on Bandcamp alone because they make it so easy.
Just because they tell you they're giving artists a share of the money doesn't mean they've suddenly stopped being liars.
At this point, they're not even providing any service. Anyone can put their music on iTunes and Amazon for all of $35 through a service like Tunecore, while simultaneously selling it all but direct through Bandcamp.com, who take 15% off the top -- the inverse of how the old record labels split the cash. Instead of signing a terrible contract that gives someone else all the ownership of your music, get a loan and hire a promotional company yourself.
I'd go so far as to bet that some of the money artists should have been paid by their labels is probably now sitting in Paul Boutin's bank account. This article is either a troll, a satire, or a shill.
Perhaps you are listening to artists who don't share your values?
1)Make a really good quality recoding. I know it is possible to do it without a label, and I know that it has even been done, but the vast majority of non-label recordings are really bad.
2) Really good distribution system. I know, you didn't find your music from a record company. But, having a record companies resources behind you makes your chance of hitting it big orders of magnitude greater.
The quality of the recording depends on the producer, studio and time, so it's something that is a function of money (assuming the competence of the bands are all equal). This in itself might favour labels, but labels are the worst source of money that a new band could use, lending money on incredibly unfair terms. Most bands would be better off going for a regular loan at their bank.
Both ways require money. One way is less painful it you fail.
And I first heard metallica (just like most bands) through the normal promotional vehicles which is probably the case for 95 percent of the people who eventually bought their albums.
Because that's not the truth for a lot of music pirates. When you have free, unlimited access, you're willing to try out a lot of stuff that you wouldn't actually risk good money buying at the record store. The reality is that very few people actually buy an album without first deciding they like the music and want to listen to it forever -- they simply receive the first hearing over public airwaves or a friend's recommendation and sampling instead of BitTorrent.
But many downloaders use BT as a sampling service and try out new music they'd never actually buy (at least, that's the idea when they first download the album), and by so doing introduce themselves to whole new genres, bands, etc., which gain their money in a variety of ways. Some may not purchase CDs for various reasons, probably foremost that CDs are a pain compared to a good torrent, but there are other revenue sources, like merchandising, concerts, etc.
AND, even if someone tries out an album and decides they don't like it enough to pay the band, there is still a net benefit to the band in that the music has been heard by someone who otherwise would have never heard it. For many bands just that is enough, but for those with more commercial orientations, this can lead to a lot of financial benefit, because you never know when this person will be riding in the car with a friend who puts on a similar album and say, "You know, I listened to band X's album, it sounds a lot like this, you might want to check them out."
The point is that there's really a lot of reason for both consumers and producers to be happy about filesharing. The 1:1 correlation of downloads to lost sales that media companies and their backers posit is really ridiculous, imo, and not remotely reflective of the real habits of the downloading populous.
15 cents on a dollar... not a bad cut to be honest.
So where does the money go? Well the majority goes to retail and distribution. The label is not earning 75%.
In the UK a CD album used to cost 30p to produce including artwork and case. To get that price we'd have to make 20,000+ copies.
We had a dealer price of approx' £4 per album. This is the amount an album is sold for by a record label and includes the cuts for: the band, the distribution, the MCPS (mechnical copyright), the label and production.
At this point the £4 is split something like this: 30p = Production of CD 40p = Copyright (goes to the artist via the MCPS who take a cut for the collection of the royalty) £1.20 = Distribution (covers sales into shops, temporary storage and physical distribution to shops) £2.10 = Artist and label cut.
The £2.10 first has deductions... PR, marketing, etc... take off 60p per album.
So we're at £1.50 per album. At Jeepster Recordings we split 50/50 with our artists on domestic sales and 75/25 (in the artist favour) on overseas sales (which were mostly contractual as licensees did the work in that region), so they got 75p per album, and we got 75p per album in the UK, and they got £1.12 per album overseas and we got 38p per album.
Now that's all based on a £4 dealer price, yet the album would retail for anything from £9.99 (indie shops) through to £16.49 (at HMV). So retail were taking the lions share of the cost of the album, and only a very small slice actually made it to the label.
Interestingly, a 50/50 split is too small a cut for the label to work.
We learned this the hard way as we were not viable based on that contract even with successful bands. The high production quantities resulted in warehousing costs, and the nature of a small business having overheads for an office and wages puts a strain on the money we did make, then you include the cost burden of artists that don't make it and we were unable to make a profit even though we made no substantial losses. Cash flow eventually killed us... I think 60/40 in the label favour (for all sales globally) is actually the minimum viability of a label.
The question asked was: What have the labels done to deserve even a 60/40 cut of the revenue.
The answer is that the label is a bank playing a high-risk game. They are no different from venture capital firms in the tech world. The band have the talent and vision, but need from the label investment in equipment (instruments, and studio time) and time (the ability to only work part-time so that they can work on the music and recording it). So the label have to act as a bank, and considering the rate of failure of bands (consider them small businesses) they need to make enough of the successes to cover their losses from their failures.
The labels also perform a secondary role. Just like YCombinator has a network of press people at the ready, and an alumni of entrepreneurs... so a label has a network of contacts and friends who a band gains access to. A band can get a high profile producer or access to post-production mastering that makes the difference between make or break. This is invaluable to the artist, it's a hard enough business without access to these networks and a good label should have a good network of contacts and friends to help the artist out, to keep them focused and to help give them a leg up when the time comes.
And finally the label plays a more critical day-to-day function: Paying rent for the artists, covering studio costs, etc. This stuff can be extremely costsly, one album for Belle & Sebastian cost more than £150k to record and £30k for post-production and this was whilst they were still relatively small. It's all betting on future success. Importantly for the artist, not only will a label lend the artist this money (unlike an actual bank) but the label will write it off if the band is never successful (very unlike an actual bank).
So the label does perform an invaluable role in general, and one that like the VC world can make the difference between the artist owning the whole of a pea, or the slice of a melon.
Not all labels perform these roles well, I'm extremely critical of the larger labels who abuse their position and don't help, support and nurture their artists and most importantly under-fund them and still expect a huge slice (more like 85% to the label and 15% to the artist). The smaller independent labels, however, are populated by the Paul Grahams of their industry and perform a really vital role in bringing bands through and making them viable.
The music, unfortunately, isn't enough by itself... just like building a great product isn't... you need support to do it, and you need marketing to tell the world about it.
Going back to digital now, how does that traditional cutting of the pie work in the download world? Well, the biggest costs are removed: Retail and distribution. Sure iTunes and Amazon are still getting a very large slice of the pie, but more notably even with reduced prices compared to physical medium the percentage of overall revenue for label and artist has increased.
So you have a situation where there is actually a higher percentage of revenue going to the artist and label, and the lack of physical production reduce some of the overheads and risk involved (such as no long-term warehousing of CDs in an attempt to get lower production costs). This has meant that a lot of the smaller labels (just like the angels, super angels and small funds) are booming. Those small labels are booming as lower costs and the lack of minimum production runs, mean that they are able to sign and support a greater number of artists who can all be just about viable.
Weirdly, the music scene looks pretty good today from that perspective. Assuming you aren't talking about large labels who haven't yet figured out all of this and still have an incredibly heavy structure to them.
This is all before you factor in the publishing rights (extremely lucrative) and revenue from performance and merchandise (that really does go to the artist more directly than anything). Artists nowadays are in a very good position, being able to benefit from having their thumbs in all of these pies at once (traditionally... in the 60s... the major label would own all of this).
For the smaller labels and artists... it really has never been so good. Only the big guys haven't yet worked out how to fully adapt to this landscape (they're still mourning the death of their 40yr cash cow).
tl:dr
The biggest cut is taken by retail and distribution. Of what remains think of the startup world: the indie labels are your YCombinator and angels, the major labels are the large venture capitalists and investment banks... you can make it without that stuff, but just like the support given to a YCombinator in the form of nurturing, contacts and cash, similar is true of the label and what it can do for the artist. Finally think of banks, the labels act as a bank as well as other stuff and not only are they willing to lend to a high risk venture, they can write it off if you fail without you having to declare bankruptcy.
If it's not worth anything why do you want it?
You apparently feel you are entitled to a lifetime of free entertainment. What have you done to deserve that?
I'm sure that's the exact motivation.
This is a lie. I have never not gotten 320kbps or FLAC from BitTorrent. In fact, I've never even seen the option to get lower quality. With people happily sharing uncompressed Blue-Ray rips, the 300M for a FLAC album is nothing.
I guess it depends where you hang out. I have never searched for music on TPB.
(BTW, fun fact... there are standards for pirated content: http://en.wikipedia.org/wiki/Warez_scene. If your torrent isn't good enough quality, you'll be made fun of or something.)
There is so much wrong with those sentences, I'm not sure where to start.
1) Who the hell did they test their 128kbps on? I can tell the difference, even with crummy earbuds. With my Grados, 192 is still distinguishable, and I'm far from skilled in audiophile terms.
The rest of the article seems to miss a major point in this whole affair: how we got here.
Thank you, pirates and audiophiles, for allowing me to buy high-quality, DRM-free music. Could you go after the video industry now, pretty please?
It is true as you say that other CODECs are "better" than MP3.
It's not enough to be able to "tell the difference". You also have to be able to tell the difference in random A/B tests.
If you are like 99.9 percent of the population, you will not be able.
A test is reproductible. Your anecdotal testimony means nothing at all.
Random A/B with the same song, one CD and one 128kbps MP3: not a problem identifying the two with iPod earbuds. Even if I'd never heard it before. With good headphones, the difference leaps out, it's utterly unmistakable.
I'm not sure I follow the logic here. I would argue that the rejection of DRM systems wasn't fixed by labels. They had to be brought kicking and screaming to that particular table.
In this whole thing, what's funny to me is that the solution to the whole issue was known as soon as Napster got big - make all the songs available, and make them cheap, and most people will stop bothering with pirated music. I know I got bored with pirated music about a week after starting it.
Personally, in the fullness of time, the record companies will come to love digital music. There's one less middleman taking a cut, no inventory to worry about, and new ideas, cross promotions and artists can be brought to market and tested faster than ever. The biggest losers appear to be the people who did album art, but maybe with the high quality screens of digital devices, they'll find new ways to show their talent.
But digital music will always have it's roots in piracy, something that will end up as a trivia nugget in years to come, kind of like how people talk about how NASCAR got going because of bootleggers running moonshine. 'For 20 points, how did digital music become popular and displace the CD?'
Oh really?
Even wide open trackers have a lot of stuff encoded in 320/FLAC. And I guess no one bothers with anything less than that on sites that specialize in music.
It's the age of movie piracy now, but music piracy is not dead.
And for the most part, the people encoding these rips in FLAC admit that they can't tell the difference between 320kbps and V0, let alone FLAC and V0.
In other words: 256kbps is good enough for the very large majority of the people out there. And a file encoded at 256kbps with AAC is higher quality than that encoded at 256kbps with MP3.
And how many thousands of dollars does it still cost to fill up, say, a 64GB iPod with iTunes music? It's still unreasonable to expect digital music customers to go entirely legit.
Sure, maybe you'll spend thousands of dollars to build your itunes collection over the years, but let's hope you backed your songs up. It may not seem likely that Apple will shut down the itunes store, but if they ever did, or changed their redownload policy, you'd sure be pissed to lose all of that music in a hard drive crash.
Services like Grooveshark offer what users really deserve, which is as much music as they want for a flat monthly rate.
Grooveshark isn't quite there yet in terms of usefulness (it can't match the tidyness and quality of Spotify), but it's very useful indeed, especially with its mobile apps. For $30/yr, it's a no-brainer.
I do work for them, so I'm a bit biased, but there's a reason I left my old job to work on it. It really is the best music service out there, in my opinion.
Firstly, "out on BitTorrent" doesn't make much sense. Secondly, it would seem the author is unaware of great enthusiast trackers like what and waffles.
> (Actually, most ears are listening through crummy earbuds anyway, but whatever.)
[1] http://en.wikipedia.org/wiki/Standard_(warez)#Audio_standard...
Rhapsody opened in 2001. If it took 9 years for music piracy to be "over", then I think there's something more at work than the "it's easier to pirate" defense.
The Canadian version of the RIAA is even dumber than was originally though possible.
Amazon MP3 opened to the public ~3 years ago. Did you pirate your music before? What requirement did it satisfy? Multi-platform-available DRM-free watermark-less high-bitrate MP3s?
I guess the fact that I've been employed for the past 5 years and had money to spend on music also helped change my habits. Hence why I'm against suing college student who become your customers after.
(If you want to get pedantic about it, I suppose you could say that this is just an extension of the definition of ease-of-use; members of this demographic would have to go find and work a job in order to obtain media legally. In that sense, pirating is easier.)
http://www.time.com/time/specials/packages/0,28757,2032304,0...
Before Napster I had to buy a cd because I might like a band and probably heard a few songs from them, but I'd have pay 15 bucks for a disk with a 10 to 20 songs which I might or might not like. Then came the Apple store and now I can actually choose the songs I want, but how am I to be certain about the quality and value of most of the songs, when I have probably only heard the most popular ones?
With Grooveshark I pay a monthly/yearly fee and I can just try all the songs I want. If I really want to have a certain song on my iPod to take wherever I want and in a decent audiophile quality, I'll buy it. I think it's thievery to pay a dollar for a song and listen to it for a week and then get tired of it and never listen to it again. Multiply that for an album, and then multiply it for the couple of artists you might like. This is the way that Tv should work also. I get to pay for you to stream me shows, and if I actually like a show enough that I'm sure I'm going to want to either own a digital or physical copy of the product, I'll buy it.
I have no problem buying a digital or physical song/album to support the creator of a product I really like, but a I have a huge issue with having to pay 10 bucks to get an album I'm not sure I want to own, or even listen to more than a couple of times.
You are a terrible double standard.