Musician Exploitation: Who’s Really Responsible?

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IFPI chairman Plácido Domingo bellowed as Rome burned.

Hang out for a few minutes and I’ll tell you why Grooveshark may be more ethical than Spotify.

Brief History Lesson

By suing Napster and its kin out of existence, the music industry elite created a “soft landing” for its multi-billion dollar business of selling access to recorded music. They couldn’t kill so-called music “piracy” (also known as song sharing), so they killed the nascent technology companies that tried to build a business around it.

To what extent have musicians benefitted from this business model? Until access to music became free, it was our primary revenue stream. But too often we got such a small piece of the overall pie. The record business was never particularly ethical, with its exploitative contracts, shady accounting and history of corruption.

Free access to music wiped these ethical dilemmas off the table with one click of a mouse, giving us a new debate over the question of whether music should be free to access and share.

Notice I didn’t say “free music”. Music isn’t free to produce or market, though costs have dropped considerably any way you spin it.

At the time of Napster, music suddenly was free to access with an Internet plan and a computer. It took the industry hundreds of millions of legal and lobbying dollars to finally stop the bleeding. In 2013, the slow death of physical media has been largely offset by the rapid growth of digital after a precipitous $3B drop.

The corporate music industry would be quick to tell you that suing innovative digital music companies and individual file sharers was all about protecting musicians’ revenue, that they saved our bottom lines. This is the same industry that coerced us to sign exploitative contracts, that price gouged and price fixed consumers, that bought off radio to play the same songs on repeat.

Nobody’s perfect.

But musicians are starting to wise up as they see the bottom line on their streaming revenue reports. To be fair, Spotify (and iTunes) pay roughly 70% of its revenue to artists (more accurately, “rights holders”, which are primarily the labels who exploit the artists’ copyrights). A lot of the negative reaction can be chalked up to failures in long-term vision — as the decibel point moves right in our royalties, the multiplier grows exponentially. But the current streaming royalty system clearly favors the big four major labels over the short and long term, because it is harder for independent, unsigned and emerging musicians to compete with their massive back catalog of perennially popular music and marketing budget to match.

Some musicians are coming around to bridging the art/business divide and becoming entrepreneurs themselves. They’re sick of having to rely on someone else exploiting their rights for increasingly less money. The Internet allows direct fan patronage in the form of crowdfunding, tipping, or selling both virtual and physical products from one’s own website. Home studio production is getting cheaper and better. Licensees are hungrier than ever for the latest music. Marketing is as easy as creativity > strategy > click. These aren’t empty catch phrases like “downloading music for free is stealing” and “piracy is bad”, these are realities clear to any musician working in the field today.

Yes, there will always be artists who dare not sully their art with business concerns, but they are an increasingly lonely breed. The new musician adapts to the meager streaming royalty stream not by petitioning for higher royalty rates from Pandora, but by embracing business models with far more promise than selling access to recorded music. If only the record business elite would step off. But there’s billions at stake and they like their yachts. Who can blame them? They’re the last generation of the American Dream and they don’t want to wake up.

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What would Jesus stream?

Occupy the Music Industry

Revolution is blowing in the wind among musician culture, and the industry elite can smell it. The chairman of the International Federation of the Phonographic Industry is acclaimed opera singer Placido Domingo. In the IFPI’s 2012 annual report, Domingo titled his introduction, “A digital world that rewards artists and creators”.

Really? What about “a digital world that rewards the gatekeepers between artists and creators”. That’s really what the IFPI is concerned about. It doesn’t represent the interests of musicians, it safeguards the commercial exploiters of musicians’ recorded music copyrights. Let’s tell it like it is — the money trickles down through the cracks in their multi-billion dollar pavement. The markup on music remains artificially high to justify the expense of major label production and marketing. They also need to even out the variance from gambling on bands like derivatives traders.

What’s concerning is to see musicians jumping on the IFPI’s bandwagon, supporting the suing of technology companies, demonizing their own fans for sharing music. I mean, what do these musicians think is going happen? Are we going to all of the sudden roll the music industry back to 1996 when a CD cost $14.95 and you were forced to buy 9 crappy songs for every hit single?

“Of course not,” these skeptics will tell you. They love new technology, it just has to be applied fairly to musicians. Technology companies, they say, are even worse than the exploitative record labels, because they want to use your music for their own gain and pay you nothing!

It’s not even remotely that simple. Of course, there are plenty of digital music companies exploiting musicians’ copyrights. But it’s precisely because we’re still working within the model of copyright exploitation established by the labels.

Grooveshark is an exploiter. Spotify is an exploiter. And on the face of it, Grooveshark would appear to be screwing artists far worse than Spotify. Google has decided to blacklist them from certain search functions under pressure from the IFPI and its minions to fight so-called “piracy”. But Grooveshark has only been convicted in the industry, not in the court. They’ve literally been blacklisted from the industry for daring to question the status quo of corporate-hijacked music law and technology.

Corporate Hijacking of Music Law and Technology

The majors and some indies have refused to license their music to Grooveshark. As a result, the majors are trying to sue Grooveshark to death just like Napster or all of the other -ster’s they shut down with copyright infringement lawsuits. We know how well that worked — unauthorized song sharing only grew more popular. The industry’s well-documented and cyclical fight on piracy is the same kind of endless war the US is engaged in overseas. The industry has been fighting it for 100+ years and the only true goal has been to co-opt the developments of independent innovators rather than truly eliminate piracy, which is quixotic. (See the book Pop Song Piracy.)

Spotify and its ilk only use officially licensed music. But what happens when the legal system is broken? Copyright is supposed to protect our right to profit from our labor and to express one’s personhood. It’s also supposed to promote social and cultural welfare, and benefit the greater good by making creative works accessible to the widest possible audience. The cost for access is supposed to be high enough to incentivize creators to keep creating, while low enough to prevent a large deadweight loss, depriving the least amount of citizens from access to the work. These are the moral and economic foundations of copyright, and they’ve been hijacked — just like the political process, the food supply and our media — by large corporations.

In 2011, the four major labels controlled 88% of the market share for recorded music. That’s enough to make the Monopoly Man jealous. These labels own the rights to the vast majority of the music we listen to, and use their enormous legal and lobbying resources to keep it that way. It’s not some sort of conspiracy, it’s standard American capitalism, and the American way of music business is increasingly the way of the world.

Don’t Bring Back the $14.95 CD, Bring Back Napster

People rallied around Napster for two reasons. One was that it made it possible to access all of society’s recorded music for free. The second was that many music consumers knew they themselves were being exploited by major labels almost as much as musicians were. They witnessed a history of major music industry settlements for price fixing, price gouging and payola. They heard the stories of great musicians suffering because a label coerced them into an onerous contract. They paid $14.95 for one good song.

The music industry was incapable of embracing a world where all of society’s recorded music was available for free, even if that’s clearly what consumers wanted. (Most people at this point will say, “of course that’s what people wanted, people want everything to be free” to which I reply, “Yes they do.”)

As a quick aside, I believe music is closer to a necessity than a want — closer to food, affection, sex, shelter, etc. than a new TV or a Snickers bar. As a society we should endeavor to provide free and fair access to music — a Right to Music — on a humanitarian level. (Follow the link for more.)

Free access to music is good for musicians for one simple reason: An opportunity to be heard is an opportunity to be paid. Anyway, the best musicians make music in order to be heard first, paid second. The motivating factor of copyright and the potential of being the 1 in 10,000 musicians that become a rock star have been greatly exaggerated. If copyright law evaporated tomorrow we’d still be making music. That the music industry lost half its value and we have more artists creating more music than ever before is testament to this fact.

David and Goliath.
David and Goliath.

Grooveshark vs. Spotify

This all relates to the Grooveshark vs. Spotify ethics question, because Grooveshark is pretty much the only company of its size that believes access to music should be free (or nearly so.)

Spotify, and the dozens of other streaming services (many of them restricted to certain geographical regions because of licensing rights restrictions) believe that the way to save musicians is to increase payments to the labels that exploit them.

Sound familiar?

Let’s contrast two opinions, the first from IFPI chairman Domingo:

“…policymakers better understand that the internet does not make music “free”.”

Here we have a straight-up threat by the IFPI to stop funding politicians’ re-election campaigns if they don’t pass legislation protecting major labels’ ability to exploit musicians’ rights for maximum profitability. Spotify et. al. would agree with this statement. As we’ve observed, just because the Internet provides free or near-free access to music, that doesn’t make the production and marketing costs of music zero (though costs have inarguably dropped significantly).

Storm the Gates

It seems we are left with two solutions. The one proposed by the IFPI is to protect the gatekeepers by charging a monthly subscription fee for access to music.

I have no problem with this business model, nor do I think should musicians.

I had no problem with it back in 2000 when Napster brought us the technology and proposed the exact same business model. But too many salaries built from exploiting musicians were on the line, and they were sued out of existence. It wasn’t done for the musicians. It was for the executives, the lawyers, the lobbyists and the other business associates at the multi-billion dollar multi-national corporations. Any musician who thinks these companies have their best interests in mind are deluded. It’s not entirely black and white — I’m sure there are plenty of employees who do good and mean well. But even the legends that deserve our respect, like David Geffen, eventually had their ethics compromised by commercial forces. A cursory glance at music industry history clearly demonstrates why gatekeepers between the artist and fan are a really, really bad idea from an ethics standpoint.

Musicians had no choice but to put up with it to get paid. This is no longer true.

That’s why I like option #2 — free access to and sharing of music. (Free as in freedom not free as in beer.)

Let’s contrast Domingo’s threat with Grooveshark SVP Paul Geller’s vision on where the music industry out to be headed:

“…I think that we have to be creative about how to get more money into this ecosystem, because I don’t think anyone sees those numbers [streaming payments] and is really inspired by them, I think people look at them and say ‘well this is a soft landing for the music industry,’ it’s ‘hopefully we don’t have to lay off too many people.’ And that’s why I think that Grooveshark is out there trying to be creative about how to infuse the industry with more money in ways that I don’t think are commonplace right now.” (from Digital Music News)

Grooveshark’s technology and innovation was neck and neck with all the other streaming music sites a few years ago, prior to having to dedicate an enormous chunk of their time and revenue to fighting legal battles with the majors. They recently rolled out some nice new features to compete with the Spotifies, but it’s clear they are living in a legal and fiscal nightmare. Their CEO Sam Tarantino admitted as much while doing an interview for Grooveshark’s new Broadcast feature. I can only surmise by statements like the one above that the people at Grooveshark truly believe they are fighting the good fight. And why shouldn’t they?

Grooveshark does pay artists, it’s just that they haven’t reached a licensing deal with the majors because as of yet they’re unwilling to bend over far enough. To Grooveshark, the majors are just trying to extort them and screw musicians anyway.

If you’re an independent artist or label, you can register your music with Grooveshark and they will pay you a share of their advertising and subscription revenue. These payments may be even smaller than what Spotify can offer, but Grooveshark is also much smaller, and draining their pockets just fighting to exist. Legally, they are in the right, because the DMCA allows for a safe harbor to exist for copyright-infringing, user-generated content, provided the company removes this content upon request and the platform has other significant uses beyond so-called “piracy” (really just unauthorized sharing of songs… does that sound so bad?)

Nobody knows right now if Grooveshark will give out and sign away their seemingly sinking ship to the majors, or if they’ll keep fighting the good fight until the courts deliver a predictably narrow, safe harbor-eroding decision. Law was never good at keeping pace with technology.

Toward a Two-Way Music Industry

The majors would like to continue collecting 88% of the market share for recorded music (and then pay a fraction of it to musicians because they signed exploitative contracts at low points in their career). How does consolidating wealth in media gatekeepers accomplish the IFPI’s mission of achieving “A digital world that rewards artists and creators”?

Stayin’ Alive

This fits into the larger context of corporations and governments trying to kill Internet freedom. Ask yourself, “Why wasn’t radio two-way? Why couldn’t the listeners also be the broadcasters? What about television?” At a glance this seems to be a technology and cost issue, but it’s not that simple. There are powerful commercial forces that ensure these technologies are developed in a way that maximizes profit for corporations, creators and consumers be damned. That’s why we have a long history of gatekeepers in all creative industries, not just in music.

The Internet changed all that with one simple feature — the consumer is now also the broadcaster. Large corporations have spent the last 15 years trying to litigate and legislate their way back to one-way media. Discouragingly, they continue to make gains every day.

This is why I believe Grooveshark may be the more ethical approach on balance. Spotify may talk a good game on paying artists. They may be expanding the pie we take our little piece of. And we can’t rush to conclusions that just because a single stream payment looks small today doesn’t mean it will add up in the long haul. Ultimately, any discussion of musician’s revenue share is taking place within the context of what their revenue share will be after the technology company takes their 30%, and then the label takes its majority share. Spotify and the IFPI are really only innovators in repressive legal maneuvers and artist exploitation. They’re profiting from a 15-year-old idea Napster first realized.

How can I say Spotify and the IFPI are exploiting artists when they’re trying to collect more money for them? Because it perpetuates the old model of exploitation on new technology. It’s repeating the same cycle of co-option that happened with the phonograph, with radio, with cassettes and with CDs. It’s a smokescreen to prevent you from thinking like an entrepreneur, from adapting to free access to music, from finding new opportunities to profit without the gatekeepers and stealing their market share. They desperately want to continue the same systematic exploitation and price-fixing that the record industry has been guilty of for the last 100+ years.

Grooveshark is more ethical because it rejects this corruption. They aren’t saints. They’re certainly pariahs. They haven’t figured out how to improve upon tiny streaming music payments, but they’re trying so hard they’re sacrificing their personal lives, their livelihoods, their reputations and quite possibly their sanity.

The vast majority of musicians will see no significant increase in revenue until the major labels lose their market monopoly, and their revenue share drops considerably. In this sense, Grooveshark is using loopholes in the DMCA to kick the IFPI in the nuts — pretty much its only defense against the obscene legal might of the industry elite.

As a musician, do you really think the IFPI or Spotify (if they can stay in business) are going to solve your revenue problem? Of course not. They’re looking out for #1: the record industry elite.

The solution for musicians is to start looking out for #1 too. That means building a culture of entrepreneurship. That means direct patronage from fans via crowdfunding and tipping. That means cutting out the gatekeeper and giving fans exclusive access to products that are still scarce. Selling access to music is no longer viable, and only by corrupting copyright do corporations make it so. The ethical foundation of copyright is sound, but it has been corrupted.

The greatest lie told by the IFPI is not that their mission is driven by musicians (they have musicians in mind, maybe, but certainly not a priority). The greatest lie told is that they are somehow going to bring musicians back to a world where they were fairly paid for their labor, where they are free to express their personhood without exploitation, where society can access and share music freely, and where more music of higher quality and greater diversity is listened to with greater frequency.

That world never existed. But it can today, with free access to music as the great equalizer.

The only way to fairly solve the musician revenue problem is for musicians to reject the century-old system of exploitation and fight to keep the Internet free so we can build a new culture and economy of direct fan patronage and musician entrepreneurship.

Until that happens, I’ll be rocking out to Placido Domingo on Grooveshark and waiting for the next Napster.

The Origin of Music: A Brief History of Song Sharing

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“We are the music while the music lasts.” – T.S. Eliot

In modern-day song sharing — what we think of as “music” — there are three participants: musicians, listeners and industry.

When music first originated, there was little if any separation between musician and listener. Certainly, there was no business of music upon which to build an industry. In prehistoric times, music was part of a holistic method of communication bundled with body movements and primitive utterances, which would respectively evolve to become body language and language proper.

Over time, however, the role of the music creator — once a role shared by all — became specialized. The musician was separated and exalted above the listening audience. And over the last few centuries, this relationship between artist and audience was rapidly commercialized, giving birth to the music industry.

Music — song sharing — happens between musician, listener and industry. It is through song sharing that music is born. Much like the observation of a quantum particle causes it to exist in a certain state, music only truly exists when it is shared. Music is not a thing, but an activity, something people do. One cannot possess music, one can only be possessed by it.

Song sharing is not just passing an MP3 across the Internet, though free access to digital music is unquestionably the latest major turning point in the history of song sharing.

Song sharing is any act that brings music into being. Composing, performing and recording are the ways musicians share songs. Listeners can distribute copies — such as MP3s shared online — but unless these copies were listened to, no song sharing really took place. The listener shares songs by playing them for other people, or getting others to listen. In a world where musical quality is judged in dollars and not sense, the listener’s role in music’s dissemination is grossly overlooked, though that is changing quickly.

For the last couple of centuries, the music industry has produced, distributed and marketed songs to be sold. They owe their existence to song sharing by musicians and listeners. As such, they have been cast in a gatekeeper role, mediating the relationship between musician and listener.

For the vast majority of music history, song sharing happened freely and naturally between musicians and listeners. The act of making and listening to music is hardwired into our brains, involving more cognition in a greater number of areas than any other activity. Music evolved over millennia without any mediation of industry, becoming the creative center around which cultures formed. Song sharing was, for most of its history, was the glue that bonded individuals together through shared expression, literally forming societies.

Four turning points in the history of song sharing forever transformed its nature. Not coincidentally, each turning point marked a major milestone in the formation of the music industry.

Each of these turning points centered (naturally) around one of the three ways musicians share songs with listeners.

Composition is the DNA of song — instructions for its formation. Performance brings song to life, the performance was the act of song sharing until the recording was invented a little over a century ago — a blip in the epic history of music. Before then, composition and performance were essentially inseparable. Music was an oral tradition, and songs were passed down in this tribal, cave-person folk tradition: sacred copies that nonetheless changed ever so slightly as they were reproduced throughout the ages, mimicking the process of human evolution. The music was not made by musicians but rather by cultures, and as such, there were no composers or performers, only traditions of sharing songs.

The role of musician became more specialized as the technology of music evolved. The voice is an instrument we all possess, and there are many things in nature, including our own bodies, which serve as readymade percussion instruments. The sounds of nature and the movements of our own bodies inspired and possessed us to create the first music. But as instruments became more sophisticated, the role of musician began to be more distinguishable against the listening audience. This was the origin of the composition and the performance as separate from a cultural tradition. The role of song sharing in the civilizations of antiquity was a sacred, spiritual one, and seen as the domain of the gods themselves.

The first major turning point in the history of song sharing has to do with Pythagoras’s discovery of the mathematics of music. Though his teachings were to be lost or ignored for many centuries, the revelations of Pythagoras eventually enabled music theory to develop, ushering in a new wave of musical technology to honor what early civilizations saw as the divine music of the cosmos.

Over the second millennia, we developed new instruments, new methods of composition and performance, new ways of notating and communicating musical ideas. These advances led to the final distinction of musician as separate from listener, and of composition as separate from performance. Thus song sharing came to be defined as a discrete activity, exchange and relationship between musician and audience.

The Romantic period ushers in the second major turning point in the history of song sharing, this one having to do with performance. In the hegemonic Western world, performance morphed from folk tradition to the work of art of an individual genius. This had a profound impact on song sharing, bringing about the classical period of composition. It removed music from the domain of the gods and placed it squarely in the hands of humans. This transition began with financial support of the arts by aristocrats but ended with the audience as patron. This fundamental transformation for the first time created a thriving market for music performance, and this capital infusion drove the evolution of music technology and theory to even greater heights.

With composition and performance clearly defined and ascendant in profitability, the third and perhaps most transformational turning point in the history of song sharing is the invention of recorded music. At the turn of the 20th century, the phonograph quickly ushered in an exponential increase in the market for compositions. At the same time, performance began to take on a completely different role, being more of a means to the end of recording or marketing recordings than valued for the music itself. New broadcast technologies and recording/playback electronics fanned the flames.In what had now become a familiar cycle, music technology and industry advanced hand-in-hand on exponential scales, forever altering the culture of music and the roles of musician and listener. How quickly we forgot that prior to recordings, performance was the only way to hear music.

Toward the end of the 20th century, an imbalance in the relationship between musician, listener and industry started becoming apparent. As the market for music grew, the music laws and technologies governing the market for music were increasingly co-opted by large corporations, causing a net negative effect on culture. Both as a counter-reaction to this corporate hegemony/homogeny — and as a consequence of complacency and nearsightedness of the the record industry elite — song sharing technologies were re-appropriated by listeners en masse as they sought an equilibrium between culture and commerce. The industry responded by doubling down on restrictive laws and technologies of control, casting its customers as thieves, which brings us to something of a modern-day impasse in the evolution of song sharing.

The history of song sharing can put into in perspective some very important questions about the origin, meaning and purpose of music. These vital issues are all too ignored in our modern-day appraisal of music as entertainment product, of musician as celebrity, of profit as purpose. This perception is itself a product of the music industry, and as the market for music came to dominate our culture, we lost sight of the true meaning, power and purpose of music.

The true purpose of music is to bond humans together in shared emotional, physical and spiritual experience. As such, music has the power to make us better people, improve our relationships, and make our society better. It has the power to help us connect with and heal our bodies. It empowers us through creativity and enriches us through a deep understanding of the human condition.

All these powers of music that we lost sight of are returning, thanks to the fourth turning point in the history of song sharing — free access to music. This is not the death of the music industry, but rather a long overdue re-balancing of the relationship between musician, listener and industry. Though the industry fights this change with all its legal and financial might, the ancient power of song sharing between musician and listener, amplified by digital technology, is too great to suppress any longer.

Today, listeners are the new patrons of music — neither mass audiences via industry gatekeepers nor aristocrats have the power alone to sustain modern music culture. The separation between musician and listener is disappearing as technology democratizes composition, performance and recording. Music’s fans become DJs, remixers and mashup artists — musicians in their own right. The gatekeepers are a disappearing vestigial tail that had largely evolved simply to grab hold of money — the deep-seated and long-evolved power of song sharing transcends the market to speak to the soul. We are rediscovering music’s incredible power to heal and to change ourselves and society for the better, rather than pigeonholing the most divine human expression to mere sonic product.

As an epilogue, a fifth and final turning point in song sharing is on the horizon, again driven by the exponential progress of technology. In many ways this turning point marks a return to the original, prehistoric role of music as a central component in a holistic expression which allowed us to survive in a challenging landscape, joining us together in the tribes that would become the first societies. The lines are blurring between musician, listener and industry; between composition, performance and recording; between culture and commerce; between technology and law.

Our modern-day music universe sets the tone for this final and total technological transformation of music that will take song sharing beyond the audible and directly into the brain. The cutting edge of neuroscience and music theory points the way to a culture is based on computation. Perhaps then we will return to the reality of music as the sacred essence of all things, the song that we play by living. Life is a song we are sharing, and song sharing is the way in which we harmonize with ourselves, with others, and with the Universe at large.

The Music Doesn’t Need Saving (Video)

Trying something a little new this week… a video blog.

I hear a lot of people say we need to “save the music” by preserving the old business models of the music industry. “If there are less career opportunities for musicians,” they argue, “surely there will be less good music.” I call shenanigans on this short-sighted perspective. There is more music than ever before, and a new breed of musician is being born, blurring the lines between creator and consumer. Bring on the new thing.

How the Record Industry Destroyed Digital Music and Chilled Innovation (in Their Own Words)

Since Napster was sued out of existence in 2001, the record industry has ruined digital music time and time again. The result has been to stifle innovation and creativity as the industry dug its own grave with respect to consumer support. We will never really know just how much music and culture suffered from their corruption, ineptitude and negligence. But now we can get a rough idea.

Anyone in the digital music world knows that record labels continue to sue competitors out of existence rather than negotiating a settlement and moving forward progressively (Grooveshark being the most recent example). Until now, this knowledge has been intuitive. But a new groundbreaking study by Rutgers law professor Michael A. Carrier offers stunning admissions by the world’s top music executives that they have been destroying digital music for a decade. Carrier is blowing the whistle loud to expose the culture-crushing tactics of a record industry hell-bent on saving its dying revenue streams. What’s incredible is how many of these smoking-gun admissions of the record industry’s practice of destroying music through litigation and intimidation continue to this day.

For the study, Carrier interviewed and anonymously quoted CEOs and VPs of major music and technology companies. All the major labels and nearly every digital music service worth mentioning from the days of Napster are represented here, with 31 top-ranking officers included as sources for the report. Even the infamous Hilary Rosen of the Napster-era RIAA makes an appearance. The 63 pages of the report are full of juicy, candid admissions that will make your jaw drop and the whole report is worth a read, but here are a few highlights:

• The labels shut Napster down just as filtering technology was being developed to weed out copyright infringing files and/or pay rights holders for use of their content — the same kind of software being developed and used now at YouTube. Had the labels continued to develop this filtering technology, it would be much more efficient and effective today at preventing copyright infringement. Worse, by banning p2p technology, labels just pushed the technology underground and it developed in a way to make it harder to apply such filters.

• The labels were very aware that tying a great single to a lackluster album of songs was akin to “selling 1 pound of shit in a 10 pound bag” and that one of Napster’s biggest lasting effects was to destroy the idea of bundling music in albums. However, they chose to ignore this sea change in music consumption because it ran directly counter to their business model. That the album was not sunsetted for the single continues to be pure willful ignorance.

• In the face of digital music, the labels used litigation as their primary business model. Their attitude was that they were not going to license their content to anyone. This strategy, akin to “not negotiating with terrorists”, (indeed file sharers were labeled as “pirates”) meant that no “legitimate” digital music service would emerge until the iTunes store. Steve Jobs made it happen through personal connections, and the labels basically handed the digital download industry over to Apple’s “walled garden” media ecosystem. Prior to that, the iPod drove the demand for music file sharing through the roof. By not negotiating with digital music services, the industry encouraged the “underground” to flourish an eventually empowered Apple to unseat the music retailers. By the time “legitimate” means of acquiring music emerged, the consumer base was already well used to free, unfettered access to music.

• The CD retail shops basically committed suicide. They were complicit in the labels’ litigious fight against digital music innovators. The labels saw the retailers as their customers, not the listeners themselves. After all, the retailers bought 90% of record industry products. Because the labels would allow no viable digital music alternative, an entire generation learned to consume digital music without industry consent. As a result, retailers essentially evaporated when the industry finally began throwing its weight behind the sanctioned digital music retailers as mentioned above.

• Much of the industry’s irrational behavior can be explained by the “Innovator’s Dilemma”, a somewhat obvious idea that large corporations are dis-incentivized to pursue new innovations that threaten existing business models. Just to demonstrate how out-of-whack executives were with reality, here’s an excerpt from the study:

…before iTunes offered 99-cent singles, one label was “adamant” that “the single should be priced at $3.25.” The reason was that if customers bought “two or three,” then they would “make up lost sales on the album by the sale of singles.” The respondents reaction was: “You’re out of your mind” since “people aren’t going to pay $3.25 for a single.”

• The business structure of the record labels was set up for short-term success in deference of any long-term thinking. Political power struggles were common. In short, the bureaucracy of these labels, themselves consolidated into larger corporate bureaucracies, lacked the ability to innovate in the first place. The result was that litigation was the only way to sustain the business model. Technology startups simply could not go on functioning with the massive legal costs associated with defending a record label lawsuit, especially when all the labels ganged up on one company as they often did (and still do).

• We all know that the RIAA terrorized consumers with lawsuits alleging personal infringement of copyright (remember, retailers were the labels’ customers, not the public, so why should they care about offending the public?). What many don’t realize is how CEOs of tech companies were terrorized with the same allegations of personal infringement in addition to having their companies sued out of existence. Additionally, because of the obscene statutory fines associated with willful copyright infringement, this created ridiculous situations, such as Limewire being sued for statutory damages of $75 trillion, which is more that the GDP of the entire world.

• The litigious affront by labels had a real negative impact on the economy. As it sued digital music services out of existence, venture capital for any new project was hard to come by. This created a chilling effect around digital music services that persists to this day. It’s hard to convince investors to support a project when in the past they have been personally sued for willful copyright infringement simply for investing in a digital music product. Today we have very few compelling digital music services as a direct result of the industry’s approach to using litigation as a business model.

• The report does more than dispel myths about “piracy”, it clearly shows the record industry is to blame for not only its own downfall, but the downfall of music itself. The loss of innovation and venture capital was certainly a blow to society at large, but the effect of this corrupt crusade on the music itself was equally tragic. Though hard to quantify, some of the “magic of music” as it were has been lost, or at the very least transformed irrevocably by the willful negligence of the music industry. Not mentioned directly in the report is the mountains of money denied to musicians themselves, the ultimate enablers of the industry who so often get screwed by it. Fortunately, all this chaos has spurred the public to adopt radical new business models — patronage and crowd funding chief among them — and we are finally starting to “bounce back” from the damage record labels have inflicted on the culture and economy of music.

It has never been more clear that despite bringing music to millions of people across the globe, the record industry has had a net negative effect on music, particularly in the last decade. This being one of the central theses of my upcoming book, I have overjoyed to have this report as a smoking gun source for what anyone in the digital music world knows intuitively to be true. Read the report to see what I mean.

Answering the Question, “How Do Musicians Make Money in a Free Culture?”

Thanks to the hundreds of readers who made yesterday the most-visited day for my blog yet! And a big thanks to QuestionCopyright.org for their kind words about the article everyone was reading. If you haven’t checked out their site, it’s great.

As you can imagine I’ve been getting a lot of feedback, both positive and negative. I’d like to respond to a F.A.Q. that boils down to something Upton Sinclair said: “It is difficult to get a man to understand something when his salary depends upon his not understanding it.” (thanks to Aaron Wolf for the quote).

In other words, if I’m a musician that acknowledges free or near-free music as an inevitability, and I’m watching my income depreciate thanks to this effect, what the hell am I supposed to do? Isn’t it impossible to make a living as a musician if one’s music is available for free?

It’s an issue that Free Culture advocates should be acutely sensitive to. In fact, I believe most of the negative feedback I’ve received stems from the frustration of artists who don’t know how to approach this new business of free music.

First, I need to dispel this myth that musicians are getting paid by the people consuming their music. In fact, it is the labels, publishers and performing rights organizations that get paid and then distribute money to musicians. Along the way, that money is subject to all manner of recoupment, administrative fees and questionable distribution formulas that favor corporate-backed music enterprises. So forget about this idea that when you buy music, the musician is making money. Too often, musicians making money is the exception to the rule.

Second, I need to dispel another myth — that when musicians make money, it’s because their music is good, or at least popular. It’s certainly much harder to make money off of bad music, though a casual glance at the Billboard top 100 shows it can be done if you throw enough money at the problem.

But creating music people enjoy is only a small part of the business of success as a musician. It’s the musician’s business team that often determines how lucrative and sustainable the artist’s career is. You may be surprised to compare two artists with the same amount of album downloads and see that one is broke while the other is buying an iced-out watch. A good or bad manager or lawyer is all it takes to make the difference there.

So, now that we understand musicians make money when they have a successful business team that knows how to play the game of squeezing money from labels, publishers and performing rights organizations, we are more qualified to answer the question, “How are musicians supposed to make money in a free culture?”

As you can see, it’s the musician’s business partners that first must answer this question. And no matter how well they understand the potential answers, it may be moot if the labels, publishers and performing rights organizations continue in vein to put off changing their old business models to new ones that embrace technology. I probably don’t have to tell you that this is exactly what’s happening to a large extent.

While efforts drag on to reform mechanical licensing and manage the complex micropayment chaos threatening the industry’s ability to compensate anyone fairly, the truth is none of the musician-industry intermediates are going to be making graceful paradigm shifts into a free or near-free music model anytime soon.

Therefore, the onus is on us, the musicians, to work with our business teams in ways that obviate the need for old methods of making money.

In fact this is exactly what’s happening. Steve “Renman” Rennie, manager of the uber-successful band Incubus, has publicly stated that record labels no longer have much to offer a profitable act. The list of bands foregoing labels is huge — keep in mind that it’s not the musicians saying, “we’re fed up with the old way of doing things” but the business team themselves. When the lawyers, wheelers and dealers that have to keep the money coming in are telling the labels they suck, we ought to take note.

Self-publishing is reaching new heights as well, with the ability to license music through any number of democratizing Internet services that aggregate independent music for paying licensees. And while the performing artist organizations (ASCAP, BMI, SESAC and SoundExchange here in the U.S.) continue to try to adapt to the changing landscape, musicians and businesspeople alike are starting to question their efficacy in helping small music businesses make money, noticing how much of the spoils are concentrated among wealthily, powerful industry incumbents.

The question is “How do musicians make money in a Free Culture?” and by now you’ve seen they can’t rely on record labels, publishing companies or performing rights organizations like they used to.

You’ve also seen this is a question that musicians aren’t asking rhetorically out into the ether — their business teams are hearing it, probably once a week at least.

Allow me to answer the question with a quick but relevant anecdotal aside. All around me I see people choosing to go into business for themselves rather than get a job at a corporation. In addition to the difficulty of finding a job opening in the first place, they know that we no longer live in a world where you work for 40 years and automatically become a company man/woman with a fat retirement package and full benefits. So I see many people making the smart move to control their own destiny and start their own small business. They know they can no longer rely on the corporations for sustainability.

The same exact thing is happening in music. Musicians and their business teams are realizing they need to aggressively pursue their own small businesses, no longer able to rely on the old methods of making money. They are taking matters into their own hands and taking full responsibility for their own success or failure.

I realize this may be more abstract of an answer than you were expecting. I’m telling you the way to make money in Free Culture is to look outside labels, publishing and performing/mechanical rights, but not giving any specifics as to what those outside sources are.

The Future of Music Coalition’s recent landmark study on Artist Revenue Streams is the best place to start looking for specific money sources. It identifies 42 discrete revenue streams that musicians and their business teams can draw upon. Granted, a bunch of them have to do with labels, publishing or PROs, but plenty don’t. The short, specific answer would be to comb this list for those exceptions — particularly those under the headers ‘Brand-Related Revenue’ and ‘Fan, Corporate and Foundation Funding’.

I have a marketing background, so I’m keen on thinking of everything as a “marketing funnel”. Basically, picture a funnel where the wide end represents casual interest in your band, and the nozzle is where true fans pass through with their money. Somewhere in the middle are your Facebook and other social media followers.

Free or near-free music represents the widest, cheapest funnel entry possible. In fact, it no longer becomes about marketing music in the traditional sense of manufacturing popularity. By democratizing music discovery, small music businesses have a shot at eking out a modest living. (If that’s at the expense of R Kelly having to take a taxi instead of a limo, so be it.)

Social media provides a filter for the funnel to catch and keep people’s attention. Looked at in purely capitalist terms, following a band on a social network or app is akin to saying, “I would consider spending money on this band or a product affiliated with its music”.

If you’re going to push fans into the money-making nozzle of the funnel, this is where you begin. Not somehow interacting with your online following, especially when it’s in the three- or four-figure range, is like opening a retail store and not staffing it. This is where the concept of “band as brand” becomes critical. If that whole idea makes you want to puke, well, you won’t be puking your way to the bank. Besides, that’s what managers are for.

Now that you’ve pulled your fans to the edge of spending money on your band, it’s time to push them over. This is where the formula for making money as a musician is super-easy to understand. Getting them to a live show to buy a T-shirt is your goal now. Clearly this will not add up to rock and roll riches, but will provide the cash-on-hand you need to run the business of your band. The second this basic revenue stream dries up, so does your business. This was true before Free Culture and still is.

Now, give the fans what they truly want: The ability to directly support you, and feel part and parcel toward your success. Patronage through crowd funding and other inventive means is the new label deal — a deal with your fans who are excited to know their money is going “directly to the cause”. They can see their money paying off in front of their eyes through behind-the-scenes updates leading up to the launch of the product they backed. It truly is one of the most exciting things happening on the Internet and if you’re not privy or convinced, read my recent article Top 3 Reasons Musicians are Scared of Crowd Funding and Why They Should Get Over It.

If that’s not specific enough for you, I’ll give you one more. It may be the least specific idea in and of itself, but from it you can draw many specific streams of revenue. My red-letter advice to musicians trying to make a living in a time of ubiquitous, free access to music…

Make something scarce.

Rather, make anything scarce — it doesn’t matter. Make limited edition vinyl. Make original artwork. Do you have a contingent of golf fans in your audience? Make custom golf balls. Make leather dog collars with your band name. Make a custom ringtone on commission. The only thing it takes is imagination to make something scarce — something sorely in short supply. But something tells me this movement to take back culture from the subjugation of industry and oppressive intellectual property law could mean we’ve got a lot more imagination to spare — and that’s a good thing.

Not incidentally, the same idea of scarcity that applies to your business applies to your music itself. The new scarcity in music is not about how many copies are made available — infinite copies have reached near-zero distribution costs on the Internet. The new scarcity in music is, “how awesome is it?”

We have our whole lives to struggle to make a living, but life is too short not to be awesome.

And remember, true musicians don’t make music to make money. We continue to rock whether it pays the bills or not.

In Defense of Free Music: A Generational, Ethical High Road Over the Industry’s Corruption and Exploitation

Note: This was posted as a response to David Lowery’s Letter to Emily White, which was in response to her article “I Never Owned Any Music to Begin With”. White is an intern at NPR’s All Songs Considered, Lowery is a contributor for The Trichordist, a technology and ethics blog.

As a musician and huge music fan, your emotional plea for our generation to renounce Free Culture so that musicians can make a living was indeed stirring. But beyond the choir you’re preaching to, we both know it’s falling on deaf ears. Asking today’s music consumers to kindly start paying for recorded music again because it’s the ethical thing to do isn’t only unviable — it’s not the ethical thing to do anymore. Free Culture is an ethic, and I think I can speak for my generation when I say we believe it to be the high ground over the way the music industry used to be run.

Your heart is clearly in the right place. But unlike you, I think most of us, our generation included, have a deep, unwavering motivation to compensate the musicians who enrich our lives. Here’s the crux of our disagreement: You claim listeners aren’t paying as much for access to music anymore because they’re unethical and no longer find it important to compensate artists. You and many others make this accusation over and over again without providing any clear evidence other than unconvincing anecdotes.

I believe the opposite can be clearly proven: Today’s musicians are held in higher esteem by listeners than ever before, and it’s the industry that has lost their respect (and money), due to a history of unethical behavior. The first point is proven by the sheer unprecedented volume of music now being consumed. The latter point is proven by even a casual glance into the history of the music industry.

Should listeners feel guilty for having free access to music? Of course not. It’s the best thing ever to happen to a music lover. Sometimes I wonder if all the Free Culture-haters are just jealous that they had to pay $20 per CD. You realize that price point had nothing to do with compensating artists, right? That ridiculous number was the product of illegal price fixing, obscene recoupments, payola, unethical ‘breakage’ fees and keeping statutory royalty rates for artists low, to name just a few reasons. Meanwhile, our generation experiences the ecstasy of free or near-free access to the global jukebox.

Should musicians feel threatened by listeners accessing their music for free? Only if their entire business model is based on forcing their fans (and potential fans) to pay for access to music. This is a model that our generation is using technology to reject. The exposure granted by free access to music is exactly what most musicians are after. Free exposure is only a lost profit opportunity for the minority of musicians who succeeded in the pre-digital record business paradigm. Most of the time musicians didn’t profit beyond statutory royalties anyway, because they could never recoup the cost of marketing and advertising. Now good music goes viral for free, and even generates ad revenue for the creator!

I’m going to level with you. You and many other Free Culture detractors are people from social circles with musicians that did well in the past but whose revenue dropped dramatically along with industry profits. I think the driver behind this blithely unrealistic “let’s go back to the way things were in the 90s” movement is pretty straightforward — you tasted profits from a business model that is no longer sustainable. You want your industry back.

We don’t.

Consider for a moment how were the profits of the “old” music industry won: By subjecting listeners and musicians — and indeed, our very culture — to a laundry list of horrendous commercial exploitation. Price fixing, payola, unpaid royalties, market monopolies, ticket surcharges, obscenely exploitative record contracts, manufactured popularity, censorship, perpetual copyright and destruction of fair use and the public domain… the list goes on and on. In short, the old way of doing things sucked and we don’t care if a few of that era’s successful artists no longer get mailbox money for music they recorded decades ago. We certainly don’t care if the record industry, which enabled these injustices, dies a slow, public death.

On the other side of the Free Culture argument, you have people like me: unsuccessful musicians and frustrated music fans. We are by far the majority, but our apathy is high. Critically, this does not translate into consumer apathy for compensating musicians. Quite the contrary, our apathy for corporations is driving a new appreciation for the original creators and producers of music, based on free access to recordings.

I believe my story is somewhat typical of the unsuccessful musician. After years of false starts and bad management I finally “made it” and got signed to an emerging indie. The advance was small, the recoupment high. But we had a great booking agent, nationwide tour support and opened for big bands in NYC. We got a sync license with MTV and some film placements. We had a high-powered manager and one of Britney Spears’s lawyers. Our friends were signed to Capitol, Sony began showing interest in us. We were on the cusp of making a living playing music. But while our fan base was rabid and widespread, it just wasn’t big enough. It wasn’t just a matter of “exposure” as most musicians whine. The business of the band didn’t scale, and eventually petered out. While I never quit playing music or trying to make a business of it, music became more of a hobby and I was now among the vast ranks of unsuccessful musicians.

Guess who was pissed (besides our band)? Our fans. Having supported us all those years, they now saw the apparatus of the music industry whittle away our faith in the business of our band to the point where we quit. It’s easy to look over this fact, but it’s critical not to: Music fans talk to musicians, and most musicians have historically not been happy with the way the industry worked. It wasn’t that we had bad music or bad management — our fan base just wouldn’t scale big enough to support our business team. I can see why those who succeeded in the past want to protect the old business model. It strongly favored the incumbents and built a nearly insurmountable barrier of entry that the average musician had little chance of scaling.

For both musicians and listeners, failure was the common narrative of the record industry. We sat and watched our friends write great music people loved, yet they were unable to make a living doing so, even and especially after they were signed. We saw the rare few musicians who truly made it big falter in the excesses of the industry, becoming drug addicts as the drive for manufactured popularity hollowed out the meaning of their music. Add to that the aforementioned widespread industry corruption. Factor in decades of consumers buying albums of mediocre music for one or two good singles. Pile on a digital distribution cost of near zero. Put a recording studio in every home with a computer. Lastly, drop the RIAA suing music fans for sharing music as the cherry on top, and there you have our generation’s hatred of paying for access to music.

If there is an ethical dilemma here, clearly it is your generation’s music industry, not our generation of listeners, that must bear the brunt of the blame.

I appreciate your statement that “on nearly every count [our] generation is much more ethical and fair than [your] generation”, but I don’t understand why you’d single out musician’s rights as something we specifically don’t respect. After such praise, a claim like that just seems silly.

Free Culture opponents often suggest technology somehow caused our generation’s desire for compensating musicians to evaporate. But it was clearly the corruption and ineptitude of the industry itself that is to blame for this negative attitude toward paying for music. Digital music technology provided the opportunity musicians and listeners have been waiting decades for — to balance the industry’s unchecked power, and maybe eke out a more sustainable living in the process.

Fans formerly had no apparatus to directly compensate artists. Now that they have tools like Kickstarter and Bandcamp, we’re seeing millions of dollars pouring directly into musician’s pockets. This represents a fraction of the so-called “lost value” of paid access to music, but given all the money and lobbyists the old industry has thrown at and against digital music innovation, it’s remarkable nonetheless.

That’s the thing about asking our generation to fix the record industry. We’re already doing it. We’re connecting artists directly to fans and bringing back patronage, a far less exploitative model that is emerging as the foundation of the new music career. We’re using crowdfunding to finance our work. We’re using digital tools to democratize distribution and licensing, with fairer publishing deals. Instead of basing our entire career on one album dropping or flopping huge, we’re ditching the LP in favor of a steady stream of singles, what fans really want. Apps are the new album. Production is going more lo-fi but is becoming more diverse and original in the process. These are the viable solutions I was talking about earlier. It’s all actually quite liberating because none of it involves being exploited by the music industry, and if it does, it’s certainly far less than in the past.

And yes, we’re selling T-shirts. I wouldn’t have to sell ‘em if I had a dollar for every time I heard, “your music is free, so what, you’re going to make a living selling T-shirts?” But the profit margin is good and they’re moving off the merch table like CDs used to. You have to realize that when the physical media that holds the music is no longer a profitable product, there are myriad replacements which tie the music to a physical product that can be profitably sold. The critical thing to realize here: the devaluation of the music recording increases the value of merch for the artist. Our fans are gonna spend $10 at our merch table anyway — should we sell them a T-shirt they will wear everywhere for a 150% markup, or should we sell them a CD they’ll burn and shelve for the statutory rate of 9.1 cents per song?

Besides selling recorded music, there are dozens of revenue streams for us to pursue. Many are accessible to musicians directly for the first time thanks to the democratizing effect of digital technology. For you to blame technology for unfair artist compensation is odd, for it was unethical industry dominance over the technology of vinyl, radio, cassettes, CDs and the overall apparatus of distribution that created the record business in the first place. The only difference with today’s technology is that the exploitation-crazy record business doesn’t yet have a stranglehold on it. Whether musicians succeed or fail is now up to the musicians and the fans themselves, not the industry.

So when you ask my generation to fix the music industry, we shrug our shoulders — but not out of apathy for music or musicians. We know the music industry sucked and can be better, so we’re not going to support the old way of doing things. We are at a crossroads. There will be a period of hardship and confusion. But don’t tell me we ethically don’t support artists. We listen to vastly more music than your generation ever did. We like, on average, a greater diversity of music than your generation ever did. And we’re still spending money, we’re just being attentive to where it’s going. We want to compensate the musicians, not the industry. It’s not only our choice, but our cause and our fight. The industry is throwing all the money, lobbyists and lawyers it can toward legally protecting its right to intermediate the direct fan-to-artist connection we have sought for decades and finally hold in our hands. We’re not going to allow Free Culture detractors to let that slip away just so they can collect royalties and recoup advances on music made in a bygone era.

We’d love to solve the music industry — really, we would — but we kind of need to save our culture first. Not incidentally, we believe artist compensation as critical to saving our culture. Pining for the old days when we enriched entertainment conglomerates instead of technology conglomerates? Who cares which industry is trying to co-opt our culture today, let’s take as much control as we can while technology affords us the opportunity.

I hear lots of crying about the traditions of the old business model, from the beauty of album art to the selling of millions of records. But you know what’s really sad? It will only be a few years before the entertainment conglomerates including the “Big 4″ record labels (or soon to be “Big 3″, how fair is that?) push back against the technology industry with a SOPA, PIPA or CISPA-like bill that passes into law. By then it will be too late and we’ll be crying over a lot more than our lost free access to music. Our culture may be lost in the unsustainable abyss of capitalism run amok if we the people lose too much control over technology during this critical transition.

I think I speak for most musicians when I say I’m going to make the best music I can until the day I die, and that money only determines how much time I can dedicate to that pursuit. There are way too many other musicians out there getting exposure for me to even entertain the argument that the current environment dissuades one from being a musician. I have a $1,000 studio in my basement that would have cost $100,000 a decade ago. I can make and distribute an album for free, and crowdfund a basic living doing nothing but music if I can generate at least 1,000 fans who spend $50/year with me on average (many $20 supporters and a few big backers). All I need to do is write a year’s worth of good music. With fifteen years as a musician under my belt I think I can manage.

(Not incidentally, I have other life skills I am employing to make my living, which is a very underrated issue in and of itself. What percentage of your income must be derived from music to be considered as “making a living playing music?” What about those whose non-music careers enable their music success, like website designers or audio engineers? If you manage a great music career, are you a successful musician or a successful manager? Furthermore, aren’t we all musicians? Most of us have the ability to make music but just don’t practice. Instrument and recording equipment sales are on the rise, so musicianship must be too. Everyone is already a DJ, how long before listeners are considered musicians? But that’s a subject for another article…)

It’s obvious this new music industry is crappy for scaling a band into a big blockbuster. But we are slowly getting over the rock star trip. The new music industry helps numerous smaller bands scale into moderate success. As the success stories mount, fans are starting to believe in supporting music again. Try to tell Amanda Palmer or her 24,883 fans who collectively raised $1.2 million dollars on Kickstarter that the old way of doing things was better. Then realize her story is becoming less of an exception with each passing day.

All this talk about not being able to make a living as a musician is nothing new at best. At worst, it’s dangerous, because it perpetuates the myth that only through charging access to music can one have a music career. It’s that myth that is keeping us from entering a new golden age in music. Emily White was simply telling us the truth. Come on, you know she would not have written the article if she didn’t care about compensating musicians. She works for freakin’ NPR on a show that regularly breaks new acts. It’s time to look inward and consider that Free Culture is our generation’s reaction to the ethical failings of your generation’s music industry.

Musicians and Listeners, Your Mission, if You Choose to Accept It: Save Our Culture

Music evolved alongside language and culture over millions of years to form a universal method of communicating emotion. For most of our species’ history, music’s primary purpose was to unify communities. Over time, various forces conspired to make music’s primary purpose entertainment. Chief among these was the music industry, which subjugated and exploited cultural evolution and unity for profit.

The original intent of copyright law was to protect content creators’ livelihoods while promoting cultural evolution by preserving the creative environment. Instead, the music industry (itself now a subset of a hyper-consolidated military-industrial media oligopoly) corrupted the law to steal musicians’ profits and stifle creativity. While the industry’s rapid expansion of the market during the 20th century certainly helped spread music for and wide, the cost of this commodification on our culture and creativity was heavy.

Over the previous decade, digital technology has disrupted the balance of power between musicians, listeners and industry. The record business is no longer sustainable in an era of free access to music. Unsurprisingly, the music industry, with its history of ineptitude and entitlement, is once again throwing all the money and lawyers it can at changing the laws in their favor. As musicians and listeners, we stand at a crossroads. Do we take advantage of the opportunities technology has given us and actively redefine music in the 21st century to be a force of unification once again? Or do we continue to allow the industry to subjugate the universal method of communicating as a means for enriching corporations?

Rethink Music Conference Recap: Top 5 Lessons

Several weeks ago I attended the Rethink Music conference in Boston. I can honestly say it felt like I downloaded the entire music industry in 48 hours. A non-stop parade of executives and managers concisely detailed the challenges they faced in the digital music age. In panel after panel, their guarded optimism shone like a dull reflection off a classic automobile that won’t start. Between furious note-taking and tweeting, I got all the the insight, confidence and enthusiasm I needed to begin writing the book I’ve been planning for ten years.

I want to extend thanks to the organizers and everyone who made this conference possible. Attending it changed the way I look at music and the music industry forever. Writing a book about musicians, fans, technology and the music industry has been a dream of mine since Napster hit the scene. After spending the beginning of the year cataloging my key thoughts and ideas from the past decade, I am now tackling this monster project every day.

I approached the conference deeply entrenched in my disdain for the overall apparatus that controls access to and thus commodifies music. I believed that technology got us into this mess and could get us out of it. I felt that music should be free like water (and bottled for profit when it serves the artist’s best interests). Most importantly, I felt that our culture had become a wasteland for the benefit of a corporate media oligarchy.

After attending the Rethink Music conference, that smoldering resentment of the exploitative music industry has never been more fully stoked. The trampling of artists’ and fans’ rights in a quest for revenue continues unabated, but you can’t blame the industry. It’s their job. But I’m not writing the book to change the attitudes of the music industry. I’m trying to change the attitudes of fans and artists — it’s the only way to force the industry to change.

Here are my five big “lessons learned” from the conference:

#5 – Lawyer Jokes

I learned what many Americans already know — that lawyers are generally evil, and entertainment lawyers are worse. I always knew IP law was horribly broken, but I never realized how this was the absolute bedrock of the talent exploitation business. he lawmen justify their dubious ethical position by telling musicians, “I’m doing this to protect your rights and revenue”, which rings about as true as a cigarette company telling a smoker they are protecting their freedom of personal choice. What’s worse — with rock and pop publishing deals involving multiple parties, I learned that some big deals just don’t get made. The result? The rights holders can’t afford legal representation to make a deal after the fact, caught in a Catch-22 because the deal isn’t done. Millions of dollars are floating around unpaid because deals don’t get made, period.

#4 – Unintellectual Property

I learned the industry is really as dumb as you think they are when it comes to technology. Incredibly, Napster hasn’t really taught them anything, now 10 years down the road. There were a few exceptions — Open EMI’s pre-cleared license hacker sandbox was the most notable. The Echo Nest is clearly and deservedly well-positioned to become industry tech darlings, enabling the big boys to play with the same tools the small, agile tech startups hold inherent to their hacker talent and creativity. But by and large, the entertainment is a lot like the government — it still doesn’t understand IP in the 21st century, and thinks it can use the old tactics to prevent the freeing of music for the good of fans and artists (to benefit the industry). But without technology in their blood, it’s going to be a multibillion dollar quixotic struggle of epic proportions to try to steer the future of music into conglomerate control. Since they can’t dam Niagara Falls, all they can do is pass laws to make it illegal to visit. But what happens when all the rivers flood? Consider that in the U.S. Apple generates over 100x the annual revenue of all domestic record labels combined, and then you see how badly the music industry needs help in the technology space. This is all so ironic because the entire record industry is based around leveraging technology to make people pay for music.

#3 – Complexity

I learned that one of if not the biggest impediments to the industry generating revenue in the digital space comes from their technological stupidity. One of the main themes of the conference was how screwed everyone will be for years to come because of the industry’s inability to manage the information that is responsible for profitability. There are an infinity of micro payments flying around for songs with different metadata and all manner of licensing, publishing and other exploitation rights and rates to be tracked. Though there are myriad solutions being put on the table, the industry seems to have collectively shrugged its shoulders, hoping the geeks will figure out eventually if they throw enough money at the problem. I heard a lot of guarded optimism as a facade for folks who were clearly flummoxed by the complexity of digital music analytics.

#2 – Gamification of Social Music Advocacy

I learned that what I believe to be most exciting and promising thing happening in music today — the gamification of social music advocacy — is something the industry is largely oblivious to. While the conference’s Genesis award winner Have You Heard was honored for proposing such a system, it’s insanity that the big players like Spotify had nothing specific to show in that regard. Perhaps they thought they were protecting “trade secrets” but I’ve got news for them: this is exactly why the music industry is choking. someone smarter than you is going to beat you to it. You need a Turntable.fm to come along and flout licensing until the Big 4 say, “why, look at how you’ve grown! Accept our terms or we’ll kill you.” That’s the industry’s current model for innovation — let the geeks figure it out, then buy it or sue it out of existence. For the young entrepreneurs fresh out of Harvard who proposed the “FourSquare for fans” idea at the conference — I’m afraid this too could be your fate.

#1 – Artist Responsibility

Perhaps the most important lesson of all: I learned that when artists blame the fucked up music industry for their failure to succeed — or worse, their failure to get paid from their success — they’re ultimately blaming the industry for their own failure to understand the music or the business. There are a million “How to Succeed in the Music Industry” books, none of which have ever helped anyone write a good song. Conversely, there are thousands of great songs written by musicians that no one will ever hear, because the artist has no faith, interest or aptitude in the music business. Why should they? The industry is actually OK with its role as artist scapegoat, because if the artists really understood their responsibilities, they wouldn’t have to put up with such exploitation. Being a musician is really about being an entrepreneur, starting a small music business. What we need is millions of small music businesses, not a handful of monopolies trying to squeeze the last dime out of a dying industry, willing only to co-opt and rarely to innovate. Music, like life, is free and alive — and as they said in Jurassic Park, “life finds a way.”