Back in March, EMI became the first major label to issue DRM-free (no copy- protection) downloads on iTunes. To facilitate this, Apple’s CEO broke his promise to maintain uniform pricing of $0.99 per song and made DRM-free tunes cost about 30% more than other sales. Response from the other three competing major labels was shock and disappointment. Will they be forced to also go DRM-free to compete?
Two weeks later, the U.S. Copyright Office decided that major labels can charge higher rates to webcasters for streaming music. Response from tech companies was shock and disappointment. Will they have to pay labels more to provide the public with a radio service for which they don’t even charge?
Since the 1960s, we’ve had a music filter with the major-label system. Now technology is putting that system to the test by giving artists and consumers new choices. But are these choices at the expense of an entire industry that has supported tens of thousands for over seven decades?
Although creators of commercial music are artists, they also have to be techies because of sequencers and samplers. And since technology has aided pop music production, many think the two have complementary agendas. But the reality is that the tech world and pop music are at war and these two super powers are vying not only for control of music distribution but also for the loyalty of pop music’s creators.
In one corner, we have the “tech masters”:computer/gadget makers and internet service providers. They use pop music as a loss leader to attract new consumers. They may be music fans, but they resent record companies the same way we resent paying the monopolistic electric company for a necessity. In the other corner, we have the four major record/publishing companies. To support the huge bets they place on artists, they need to protect their inventory—copyrights.
To tech masters, music copyrights are a roadblock to their master plan—selling gadgets and internet services to everyone. If they cannot get record companies to cheaply license them music for, their logical alternative is to avoid paying for it by challenging copyright law—but only as it applies to art and not their software.
DRM is a software mojo that prevents or limits the copying of a music file. Consumers love the idea of DRM-free songs because it means they can wax record companies and distribute copies at will while only paying once. But is it good for the music business?
“The tech world and pop music are at war, and these two super powers are vying not only for control of music distribution but also for the loyalty of pop music’s creators.
Tech masters think so. They want record companies to stop whining about P2P piracy and license their catalogs without this stingy, confining DRM thingy. They try to persuade the majors with arguments like, “If people can make copies, they’ll buy more music. Remember cassettes in the late 1970s?”
Labels don’t agree. Back then, people couldn’t make hundreds of copies with a mouse click. Tech masters retort, “But CDs have no copy protection, so what’s the dif?” Labels shake their heads. “First off, the only reason we don’t have copy protection on CDs is due to complex technical issues. Second, CDs cost us about $0.60 and we sell them for about $10.00. Downloads have a narrow margin and invite theft via illegal P2P.”
So if gentle persuasion isn’t working, what’s the tech master’s next step? It seems to be shaming the majors via an aggressive campaign: make the public think record companies are too dumb and greedy to see the “logical” future path. Eventually, they hope, majors will cave. The plan is working.
Recent press coverage of the music business has been overwhelmingly negative. It focuses on the RIAA’s litigation and label firings. Why don’t we hear about the other side? The tech industry grosses about $85 billion a year, eclipsing the music business with its $15 billion. Though the tech industry spends millions in advertising, when was the last time you saw a big spread for a new album release? Advertising revenue influences editors more than anything else.
But the “objective” press ignores the bigger issues at stake for artists if labels falter. If the tech world loses this campaign, it will simply have to pay a bit more for its loss-leader item. Since it tends to bundle music with other products, this expense will not be significantly felt by the consumer. It will just shave the gross a tiny bit to about $87 billion.
But if record companies and artists lose their ability to control who licenses their work and at what price, the music business as we know it ends. Music will suffer as an art form. Tech masters will buy the labels and bundle their music, and in a few years, you’ll buy a lap-top pre-loaded with an entire catalog of classic rock, rap, jazz, or whatever.
This may sound great if you’re a consumer, but if you’re a music company, you will make only a small licensing fee and your artists and songwriters will see a paltry fraction of this sum. The trickle down effect for studio owners, producers, lawyers, managers, etc., will be devastation.
-Moses Avalon
Moses Avalon is former record producer and recording engineer who has worked with Grammy winning artists and received RIAA platinum records. He is now one of the nation’s leading music business consultants and artists’ rights advocates and author of a top-selling music business reference, Confessions of a Record Producer. More of his articles can be seen at www.mosesavalon.com.