The Man 2.0 – Why technology’s brave new world is more evil than the last

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It has never been easier to find music (even if most of it is awful), and you can buy an album with one click of a mouse. Proponents of our download culture will tell you that life has never been better – information wants to be free, after all – but as I’ve said many times before on this site, the problem with the Wild West of the web is that cowboy movies tend to end up with everyone dead.

Until a few months ago, I believed that it was a matter of consumers versus musicians, and that it was just a matter of educating people that illegally sharing files is wrong and nagging people to pay for the content that they use. I now see I was misinformed. 

In a post republished at The Trichordist, David Lowery (with vast experience of both the music industry and technology) sets out how the music industry was founded on record companies earning millions and paying artists very little. It was then replaced with the current model, in which technology companies earn millions and pay artists nothing.

There’s a misconception that the Old Giants – Warners, EMI etc. – are wholly evil and that artists are better off without them. There’s also the idea that piracy only affects the rich, and that the little guy can do just fine selling t-shirts and touring. In other words, those who suffer under the new system do so because they deserve it – a view widely propogated on the internet. As Lowery puts it:

The most virulent of these folks are almost always unsuccessful musicians. It fascinates me. I can only surmise that part of their anger seems tied to the hatred of the record companies that rejected them. Successful even marginally successful musicians are often viewed as some kind of traitors. A special kind of hatred is reserved for these apostates. The file sharing/ cyber locker industry has figured this out and purposely stokes stokes them with a faux populism. I would say it’s juvenile but it’s really more medieval. That’s why I call them Freehadists. People like me are actually looking out for these young musician’s rights. I am trying to keep the new boss from screwing them. They don’t realize they are doing the work of The Man.

I can see how this way of thinking came into being: most of the early adopters of the web I knew were left-leaning hippy types who dreamed of an electronic utopia in which information was limitless and free. It’s like how you didn’t need firewalls in the early days because the only targets for hackers were governments and the most evil of the corporations. The trouble is that, since then, the rest of the entire world has moved onto the internet, bringing with them all the problems of the offline realm.

In that transition, technology companies have changed from free-thinking idealists to being as grubby and greedy as anyone on Wall Street. It’s hard to imagine that, since the image of the sweet dorky guy beavering away in his parents’ garage to invent the coolest new start-up is so firmly entrenched in our minds.

As Lowery agrees with the book I’m reading, Free Ride by Robert Levine, the reality is now one of global giants paying millions for lobbyists to bully governments into undermining copyright laws. If the major labels and Hollywood are big, compare them to Apple and Google. It’s a clash of the titans in which both artists and consumers are the losers.

Many in the digital music industry rightfully condemn the past exploitation of artists by record labels. But at the same time they seem to be doing the same thing. Trying to bully artists into giving up their rights so that companies like MegaUpload or YouTube can make money is the same thing. With exploitative record contracts The Old Boss tried to take your songs a dozen at a time and pay you pennies. The New Boss wants to take ALL of your songs,  past present and future and pay you nothing. I’ll make technologists a deal, I’ll give up my song copyrights if you give up your software patents.  Software patents are even less unique than your typical song.   So this should be easy right?

The problem is that everyone kept banging on about a “new model” that would be more convenient for everyone, but when one duly appeared, it was even worse than the one that came before it. It was just like Orwell’s Animal Farm – the pigs started wearing clothes and talking like the farmers – which was an ironic turn given Apple’s appropriation of 1984 for its campaigns. We’ve replaced one cynical system in which labels got rich off the back of artists with another one in which tech companies depend on content provided by artists and uploaded by users, to which they themselves provide absolutely nothing.

When Napster and P2P came along honestly I wasn’t pleased. At best I was ambivalent. I thought that we’d lose sales to large scale sharing but through more efficient distribution systems and disintermediation we artists would net more. So like many other artists I embraced the new paradigm and waited for the flow of revenue to the artists to increase. It never did. In fact everywhere I look the trend seemed to be negative. Less money for touring. Less money for recording. Less money for promotion and publicity. The old days of the evil record labels started to seem less bad. It started to seem downright rosy.

Things are worse. This was not really what I was expecting. I mean it’s hard for me to sing the praises of the major labels. I’ve been in legal disputes with two of the three remaining major labels. But sadly I think I’m right. And the reason is quite unexpected. It’s seems the Bad Old Major Record Labels “accidentally” shared too much revenue and capital through their system of advances. Also the labels ”accidentally” assumed most of the risk. This is contrasted with the new digital distribution system where some of the biggest players assume almost no risk and share zero capital.

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* There have been a couple serious arguments that if artists received 0.3 – 0.9 cents a song each stream this would be a “sustainable” amount. “All you can eat streaming” services would be able to charge a reasonable rate to the consumer and it would stabilize recorded music revenues or even lift them a little. Also the Spotify question deserves its own post cause I’m not sure if artists getting too little money is necessarily Spotify’s fault.

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Lowery goes on to explain that since few artists ever make enough money to pay back the “advance” (loan) from the record company, their careers are effectively funded by the labels and the more successful artists. It’s pointless to bleat on about only earning 11% when you don’t actually earn anything. Sure, defaulting on a loan (as most artists do) makes it more difficult to get another loan in future, but at least someone is lending you that money and the record is being made.

Labels hedge their bets by signing acts hoping that one of them will make money: it’s how uneasy listening acts like Foetus ended up with major label deals. Most labels will argue that they consider carefully whether an act is likely to make money before signing, but in practice it’s a wild guessing game – even though they’re more cautious than ever about their signings in today’s climate, which explains the collective blandness of the charts. This spread-betting results in the wealth of the label being more widely shared, which benefits the smaller acts on the label. If there’s ever been a system that helps the little guy, it’s the old model rather than the new one, even if the labels did mercilessly recoup their costs when it came to actual revenue. Plus you only ever hear about the bad deals: no artist shouts about how fair and generous their contract is.

The other point to remember is that mechanical royalties are paid whether or not the artist is recouped – in other words, even if you still owe your label hundreds of thousands, you can still earn money from music. As Lowery points out, “downloading a free album” almost always takes 70-95 cents out of the artist’s pocket, regardless of what the label was going to pay them.

Lowery’s article highlights the chilling practices of Google and the DMCA when it comes to its role in illegal filesharing, as Google insists on linking to sites that it has had to remove from its listings due to takedown notices, mocking any efforts to control free distribution of other people’s work. Google and the hosting site make money; the label and artist make nothing.

Almost all the activity is Twitter or Google publishing the DMCA takedown notices they receive. Because you must list your legal name and address on these DMCA notices I believe these are published to specifically intimidate those who ask for links to be removed. I mean I certainly think twice before I file one of these notices with Google specifically because there is a good chance Google will put me this on this site. […] Congrats on making it easier for the rich, powerful and unaccountable to intimidate the little guy!

Even the “good guys” – iTunes and Amazon – aren’t wholly blameless in this debacle, since the rates they charge to host the files are disproportionate to their costs. At least the majors reinvested in the acts, and at least the majors assumed much of the financial risk. The online retailers invest nothing and risk nothing, the article declares [here he and I part company, since it doesn’t take into account Amazon’s own overheads and risks – though I do agree they could pay the artist more]. Spotify and Youtube pay even less for their streamed services. [Lowery neglects to mention Spotify’s mobile/MP3 player streaming service, which makes purchasing albums more of a point of principle than actual necessity.] Spotify and Youtube might be handy resources for discovering new music, but since they do not invest in or generate content of their own, they are solely dependent on other people to make that content for them, which is not going to happen unless someone else invests in future products.

Without record labels, there is less money to spend on recording costs and touring, and fewer high-production-value albums being made. Want to see your favourite band play live? Forget it: they can’t afford to make the journey. Imagine what your favourite band’s album would sound like with a 64-piece orchestra, but dream on, because they’ll never afford it. Kickstarter might seem like a great idea, but its necessity makes me sad – it would be redundant if companies were able to invest in artists in the first place. Lowery says that individuals are less eager to invest than companies, and that is a worrying thought. A typical record deal would be for two albums, but Kickstarter might fund a single project. What about the next one?

Whenever you have bought an album, you have funded not just that artist but every other artist on that label. A while ago I asked what happens when zombies run out of people to eat. The end of 28 Days Later told us: they starve. Deprived of funding, bands cannot afford to make great albums, resulting in fewer sales and the loss of record companies to invest in new acts. What we’re experiencing now is famine: the music industry isn’t dead, but it’s very, very sick because the technology companies are taking and they’re not putting back. Yes, we should be buying albums on principle, but the changes that need to be made won’t be effected by you or me. The days of the internet as egalitarian utopia are well and truly over. We need a Perestroika before the lumbering giants of the digital age face a mutually assured destruction.

>> Lowery’s article at The Trichordist >>

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