Business/Finance

Why do people steal music and what can the music industry do about it?

A lot of people want music but don’t want to pay for it. Moses Avalon’s latest examines some of the complexity surrounding the issue and looks at what it will take for the music industry to solve the problem.

It is a law of commerce: you cannot sell something if there is no perceived value in it. You simply can’t. Suing people who steal music, as the RIAA did in 2003-8, is not really educating the public. It scares them a little, and perhaps this was necessary, but the conceptual effect is probably no different than TV companies suing viewers for making a tape (or DVD) of a movie shown on the air and then lending it to a friend who can’t afford their own TiVo.

So how do they reverse this? How do they get people to see the monetary value of music when they’ve spent 60 years getting you to believe that you are entitled to it for free? They could try to re-educate the public. This would probably take another 15 years, if they start today, assuming there were no obstacles. And there are many. ISP spending millions to “educate” the public that music should be free, is a large wave pushing back on the minuscule efforts that the RIAA spends on winning hearts and minds.

Great piece – read the rest here.

Thx to Wendie Colter for passing this along.

11 replies »

  1. Sam,
    Great article.

    My son’s downloading habits got me in trouble and we had to settle last year. It was embarrassing, to say the least. The thing is that I know that he still downloads, even after getting caught, but just not at my house. I remember the old Wild West days of Napster, and how addictive that downloading can be. I pay for my music now.

    Jeff

  2. Screw the RIAA. I’ll download whatever music I want, and I won’t pay. And I could care less about the morality of my actions. I think it’s immoral for the music industry to abuse artists and fans as much as they do, and I hope the whole industry collapses, leaving nothing but the independent artists left.

    • LeT: Ummm, how do you suppose those independent artists are going to survive? Do THEY deserve to profit from their work?

      BTW, what do you do for a living?

  3. Keep stealing – who cares if any artists remain…

    Artists are worth paying for – and independent artists still need some financial backing. You can assign a moral aspect if you wish, but I think supporting artists is important to a society with any manner of humanity.

  4. The artist is going to make the bulk of their money from tours and merch, that is a fact. The record companies set up contracts so that they get the majority of the royalties from the album and songs. The record company’s pitch is this.

    “Hey you guys rock, but they way you get people to your shows is by your album. The album is the marketing tool to get people there, that’s why we take so much off of it”

    This is something that has not changed at all for years, in fact some companies are trying to get a piece of the touring and merch money.

    Stealing music is really only taking away from record companies and established artists. If there’s a newer band that is signed to a small label and it’s their first contract, chances are they’ll be lucky to see $1 a CD, and that’s only after they pay back their recoupable expenses.

    Record companies can offer exposure and distribution, and with the success of itunes and places like CD baby their loosing the distribution edge. Basically the only power they have left is getting bands played on the radio.

    What is happening is that the exact pitch that record companies used for years is being used against them. Bands are using the internet to market them selves, and the record company isn’t getting a cut.

    I’m not sure how legal it is, and I really haven’t thought this through but what if record companies created radio stations nation wide and play only their music? They could set up a website and offer free and pay downloads. They would then have access to age, sex, address, e-mails, etc. This way they could target their demo and invest in more artists, offer a larger variety of music and have better control of the music. They may even have been able to place tracking code in the file and use that info.

  5. That’s an excellent article.

    I’ve always felt that the music industry failed. Not that they refused to treat P2P like it was the radio, but that they didn’t invest the capital to build what Apple finally figured out. Imagine (pre-iTunes) a world where, say, the BlueNote catalog was available at $1/tune for high quality digital music.

    Artists should get the word out that they end up paying for all the cost of producing albums. Maybe people would be less likely to steal if they understood that they are, in effect, stealing from their favorite artists.

    Sharing is something you do with friends or as an act of kindness. Using the verb to describe P2P networks is an abuse of the English language.

  6. Le Terrasier writes:

    I think it’s immoral for the music industry to abuse artists and fans as much as they do

    I’d say downloading is music fans’ revenge for how highly priced CDs were when they were introduced to the market. But many are too young to remember. (Yes, that would be my justification if I illegally downloaded.)

    I think bands making a living off of touring and merchandise has a built-in obsolescence. The price of fuel will eventually make touring prohibitive and the lack of disposable income will make merchandise, well, disposable.

    Musicians’ only commodity that approaches indispensability is their recorded music. It’s completely counter-intuitive that they don’t make money from it.

  7. Myth #1 (misleading fact from Moses’ article): It cost $2M to produce Michael Jackson’s “History” video.

    Okay, maybe it’s not a myth per say. For the sake of argument, let’s say that figure is correct. But who ultimately paid that sum? It’s entirely possible that, by that stage in his career, Michael Jackson had negotiated a contract whereby his label was on the hook for promotional expenses (of which a music video certainly qualifies). Typically though, that’s not the case. That’s the reason why videos are still made today, despite the fact that there is no realistic outlet for such promotion beyond YouTube. It happens because such promotional expenses are typically counted as expenses or rather advances against the artists’ royalties. That’s right; the band doesn’t get paid by the label (or receives a substantially smaller percentage) ’til they’ve sold enough records to pay off in-store posters, banner ads, radio promos, and that video. The savvy young artists these days are the ones who forego videos unless they’re willing to gamble that their image is THAT great.

    As an aside, I used to have regular conversations with the former VP of Accounting at a major label you know. He used to tell me stories about a famous singer from a band that has already figured in the Tournament of Rock: Legends. This singer would forward her bills for everything from manicures to meals to jet-skiing instructions to the label. And of course, the label would pay them. She was a major artist and the last thing anyone from the bean-counting department wanted was for the VP of A&R to come down on them because one of their stars was livid over an unpaid bill. The temptation is to say “what a vain, deluded woman!” but in truth, the accountant had a great deal of respect for her savvy. Record labels (at least at the time) didn’t have any language in their contracts for what were the equivalent of ATM fees. In addition to getting the rock star treatment from her vendors, she was also skimping out on paying for stamps, envelopes, and checks. She was also dodging short-term interest fees because the vendors would accept net 30 terms from her label.