Traditional Model Music Industry Shows Increasing Signs of Collapse
August 19, 2007
The entire creative industry (not just the music industry) has been creaking at the seams for some time now, but it’s not really the seams that are creaking (rather they’re rotting), it’s the skeletal structure of the industry that is showing signs of fatigue. The structure has been disenfranching both the creative side of the industry and consumers for quite some time and those predatory policies are now coming home to roost. The industry (in denial) wants to blame this collapse on piracy, but piracy is not the only factor. It’s just another lever used to lobby for tighter laws and control over intellectual property and other industry policies that ensure control, and figures largely in the dominance of American culture throughout the world (it’s all so reasonable).
The GATT talks, where nations are “forced”–through the “negotiation” process–to import as much as 60% of their art & entertainment from America are an important part of funding America’s economic power and cultural dominance, and it’s worth some consideration that the largest part of taxation revenue comes from the USA creative industry sector to the military-industrial-mediaplex (MIMP), where it funds the largest military budget in the world; we buy American entertainment and they use the revenue to conduct wars.
That’s a fine way to spread a little culture and a terrific means of subverting the purpose of art & entertainment, while at the same time exposing all to the scary concept of American military power through the constant production of action movies that make warfare appear to be such a normal part of American life, which since 1945 (and earlier), it is. A scarier waste of global goodwill and social capital has probably never been seen. Out of GATT came the World Trade Organization (WTO), and it was the finalization of, among other things, intellectual property agreements that occurred at the time (1994, TRIPS) of its formation.
TRIPS puts in place an interesting and useful international system, that has, like anything, the potential for construction or destruction, and though there is a lot of debate about the WTO when it comes to trade, it’s important to understand the various relationships and responsibilities between different organizations in the global village. It is also important to understand the international conventions and treaties that govern this business and which provide a measure of security to those seeking professional careers in the industry of art & entertainment as Creative Artists. I’ll be going into this in more depth in later articles. I should note: that the acronym TRIPS is a good one, for those who do not truly understand the nature of intellectual property law do surely find themselves falling over it when they endeavor to use it to exploit (in the worst possible ways) those who create intellectual property.
Piracy is not just an internet phenomenon as the industry would have us believe. Piracy of intellectual property comes about because artists get ripped off through various chicaneries (alluded to in the article referenced below), and the public get ripped off by the price of CDs, and this happens because of the social and cultural ignorance that abounds about how the creative intellectual property industry really works. It is related to the personal economy of individuals and societies but is not something that the art & entertainment industry wants everybody to know.
Why? Because perpetuating ignorance enables the industry to rip off artists even more than they could otherwise do (and we’ll look at that later on). “Knowledge is power,” remember. So when the industry can keep the knowledge to itself, then it can keep the power in its hands, and use it to disenfranchise others while negotiating agreements under the illusory umbrella of “good faith.” In the ensuing social-economic climate piracy is easily justified by the consumer who downloads, because they know they’re being ripped off by the music industry labels, publishers and manufacturers, and because they know those labels, publishers, distributors and retailers are also ripping off the artists who are the perceived heroes of the public (Why “perceived heroes”? Because most popular musicians are perceived to have “made it” out of the economic slavery that the public presently find themselves in). It’s a complex web of deceit and deception which gives the industry a bad, bad name that scares off a lot of talented individuals to whom principles are more important than materialism.
The very nature of the concept of intellectual property helps to create this illusion, in a business that is built on the stuff of intellectual effort and endeavor, which most people don’t perceive as any sort of worthwhile work at all because it looks like it’s the business of doing nothing with nothing, and of course, it is, and therein lies the conundrum that people have to wrap their wits around. Unfortunately, you can’t wrap those wits around this idea of intelletual property without understanding a few key realities and concepts that are defined in law, and without which the entire industry would cease to exist.
Consider if you will, that if the industry should cease to exist, then the economies of nations will collapse, because art & entertainment is big, big business involving billions of dollars in global business, that employs millions and has a knock-on, follow-on effect in society. If the intellectual property business crumbles, then the last world wide economic depression will look like a walk in the park by comparison; it will topple a lot more industries and businesses than most people will at first consider as the world is far more interconnected economically now, than ever before. Piracy is bad for the industry and not just because the industry says so, but because the distribution mechanisms of the broadcast industry that rely on songs and films to attract listeners and watchers who can then be subjected to advertising, upon which manufacturing and commerce is dependent to attract customers…would disappear. Oh, it would take a while, but you can only listen to and watch so many repeats before dissatisfaction and boredom set in. The world of Echo’s Voice would then be brought about.
Additionally, the way the economic system of the creative industries is structured in society also makes it possible to manipulate creative individuals into a plight of economic desperation. This condition is then exploited when it comes time to sign contracts and negotiate agreements, and that state of affairs makes it easier for the “starving artist” to be signed up for a loaf of bread and a glass of water (if they’re lucky) when they could have had a fully catered banquet had they but known their rights, the value of those rights and how to realize that value. It takes a very brave, courageous and dedicated creative individual to exploit the current system for the length of time necessary to create and market a work of art & entertainment. I admire how the one at that previous link achieved her success, most particularly for how she negotiated her deals with the traditional industry.
As has been mentioned elsewhere in the Free Articulator, what intellectual property is, how it works and how to use the rights they define is going to be described in a series of articles that also take a look at the intellectual property war that has sprung up since the internet enabled distribution of exact indistinguishable copies. We’re also hoping to interview some rather interesting fellows who have developed and/or used some alternative business models which really open up the field of intellectual property and are part of the new model of 21st Century art & entertainment business. We’ve been keeping an eye on this particular system since it was first brought to our attention (2001), as we are well aware that systems that are not robust do not survive, and Allforart is insistent upon the quality of what the Free Articulator promotes, so we monitor people, inventions, places, methods and systems for quite some time before we are satisfied that they are worthy of mention, endorsement, or support. That doesn’t mean we aren’t early adopters, either. In fact, it often means we are.
This article points up that there are larger problems within the music industry and these are not problems we have been unaware of (for some time).
“A growing number of performers, publishers and songwriters want a bigger share of that download revenue and want to see an overhaul of recording and publishing contracts.”
In every sector of the art & entertainment industry, there is growing dissatisfaction with the way the industry is monopolized by the major companies and the policies on which they operate (Deals are not always deals, as we will see later). The business has developed a reputation not to be trusted and the continuing stories of corruption, rip-off and artistic suppression that have revealed the character of the industry are increasingly driving creative individuals to develop independent models that protect them from predatory practices. This is fine up to a point, but requires new ways of thinking and working to create economies of scale that will improve profitability and minimize career risk and exposure, while maximizing promotional impact. That’s a mouthful, eh? I know some of you are wondering “What did he say? What did he say?” Heh. My apologies, but I can’t tell you exactly how this works, and it’s not because I don’t want to, or don’t know, it’s because the communication of this method would create a risk in this place, in this space, at this time. The method will be revealed, but you’ll have to continue observing this space to see how it works, and it will take some time for the full picture to be revealed. How much time? I wish I could say. That may be dependent on you.
The way the above quote is stated makes it appear as if the songwriters, performers and publishers are greedy. What it should really demonstrate is why that share is wanted: these songwriters, performers and publishers are not stupid you see, they know that economies of scale and profitability increase tremendously when electronic downloads are offered as the cost of production and delivery reaches virtually zero. The industry and those who run the business end of it, are endeavoring to milk all the profits without sharing them as they should and that is what the songwriters, performers and publishers are endeavoring to redress. But it is exactly this sort of chicanery that creates the perception of the industry as corrupt, unfair, unjust, and dishonest.
When the article refers to the suit that Cheap Trick and the Allman Brothers Band have brought against SONY BMG, it also neglects to say why they believe they are entitled to half of the profits realized. Once again, this makes the artists look greedy, when in fact they just want what is specified in their contracts which are typically stated as a 50/50 (artist/publisher) split in America and a 75/25 split in Europe. The artists just want what they are entitled to. The MIMP works in interesting ways, that’s for sure.
The companies are seeking to exploit a difference in format, packaging and delivery (downloading), as a loophole to enable them to enjoy all of the profit despite the huge discrepancy in production and distribution cost and are claiming breakage (and other sundries) in order to gyp the songwriters, performers and publishers of their due under contract. After all, the recording companies take the same master recording and simply reprocess it a little to upload it to the web for download and that’s pretty much it except for maintenance of the server and paying the power bill to keep the server running. The distribution costs are minimal thereafter. But this sort of practice points up the character and nature of “good” business as it is practiced by corporations all over the world.
We see it as a consistent pattern of behavior and as morally bankrupt; a betrayal of good faith, good will and trust, and this is what songwriters, performers and publishers are contesting. If these companies were moral, if they were not just “in it for the money” then they would, as a matter of good honest business, correctly account for and pay the songwriters, performers and publishers the money they rightfully are entitled to by virtue of the contract they have entered into. Of course, it is the entitlement the corporations are disputing, no doubt reinforced by the idea of the piracy their predatory policies have brought about. It is tantamount to saying “Look they’re stealing the profits we would have stolen from our artists!” Who are the real pirates? And who are the real victims? The real victims are in fact each of the parties involved, public pirates included, who are just as guilty of thieving from the rightful owners of the intellectual property as are the company pirates who are doing the same thing.
As I have pointed out in the series of articles that have been written to explain the individual points of the Code of a Creative Artist, the production of original works of art & entertainment stands on the principle of freedom of expression and the erosion of the industry is therefore an erosion of freedom itself [Ed. A soon-to-be-published Article on Code Point 26 goes into this in detail]. This is not a little thing, this is where the continual ripping-off of Creative Artists ends up, in a world that is totally controlled by corporations (or other forms of control), where the only people who get to express themselves through broad channels are those the corporations allow to produce [Ed. This has something to do with Net Neutrality and that's an issue all Creative Artists should be aware of, as Pearl Jam is]. Potentially, total economic enslavement of the populations of the world will soon follow (although it could be argued–from some perspectives–that, that’s already here), as there will be no independent voices capable of, or able to dissent, or raise awareness through any work of free expression. That is the world Sarah Mankowski’s science fiction novel Echo’s Voice describes, though I assure you, the ending she writes is not so gloomy a prospect as it might seem from reading this paragraph.
However, the above stated, I do not personally believe that this will happen, though I’m sure a few decades ago not many would have believed that the majority of the wealth and resources of the world could be concentrated in the hands of 1-2% of the entire population. I believe that new models are emerging and that they are creative business models that put Creative Artists firmly in control, empowered with the knowledge they need to negotiate fully informed deals that are ultimately fair and equitable. Whether or not the traditional industry can change its mafia morality however, is another question entirely. If they do not, then they are going to end up cannibalizing their back libraries, while emerging talent finds alternative methods of distribution that do not compromise on principle simply out of expediency or greed.
That the industry is in trouble is undeniable, it has been for a lot more years than recent history would have us believe. It is just that now, as information about how the industry is actually operating is becoming increasingly visible, the policies they have been operating on are beginning to take their toll. However, unlike Rick Carnes who said,
“It’s really funny how everyone thinks that only rich labels are getting hurt. The labels are the last to get hurt. The first are the very poorest: artists and songwriters, and they’ll be the first ones out of the business.”
…I don’t think it’s funny. It’s not funny at all. It’s shortsighted and ignorant. The perception that it is “only the labels that are getting hurt” is a misperception that is used by the public as a justification to steal what is not perceived as property nor as a vital part of an economic system that is intimately tied to the concepts of freedom and liberty and their own society’s economic well-being.
The industry uses alarmist phrases and labels such as “piracy” and “theft” to generate fear and new public policy (law) to protect its monopoly on intellectual property piracy that they have been carrying on for years while pretending to be legitimate beyond reproach companies (See EMI and The Beatles; The Platters; Peter Jackson, Saul Zaentz Lord of the Rings merchandise and royalties case; and others that pepper art & entertainment history–this reflects a consistent pathological pattern of criminal corporate behaviour). Public and Industry Pirates are complicit in the undoing of these freedoms and the creation of this situation and if piracy doesn’t stop then what it has the potential to precipitate is economic and democratic collapse that hurts everybody and not just in the pocketbook or bank account.
Of real concern, however, is when Rick Carnes refers to the loss of songwriters from the business. When the songwriters go, the musicians and publishers will also go (eventually) and shortly after, all the support systems and instrument makers, clubs, etc. and that will mean a cultural loss that is practically impossible to calculate. The loss of insightful, enlightening and entertaining communication through song will darken the world in more ways than one.
So piracy has got to stop, and not just at the public level, but also at the corporate level. Intellectual property theft is an extremely important issue and is not just about money as some believe. Of course, in a world that puts so much attention on the materialist aspects of life that will be the focus, but it’s just a very small part of a much larger and far more important picture.
The first thing you must do in the business of creating original works of intellectual property is understand what your intellectual property rights are and then take steps to manage them effectively. WIPO offers an excellent basic instruction (3-hour free online course: DL-001 Primer on Intellectual Property) in the subject and a more comprehensive course (DL-101 General Course on Intellectual Property) for those who are interested in furthering their education that takes 50 hours over a period of a month (See WIPO Distance Learning Academy Catalog). This is by no means all there is to know about copyright and intellectual property, as it is the exercise of those intellectual property rights that makes the art & entertainment business work, and that’s the first lesson about being in this business, it is not about books, it is not about stories, or songs, or scripts, or visual art; those are a surface apparency and not where the revenue derives from when it comes to the industry and making a living in it.
Realize that it is the rights inherent in those works just mentioned that are important and this industry of creativity, of art & entertainment, is an intellectual property rights business.
The money to be made is in how you manage and utilize those rights. So do not give them up lightly (if at all, though there are conditions when it is prudent to give up some of those rights), none of the successful artists have ever given up more than limited rights. Once you know what the rights are and how they work, and have taken a few other steps to protect the work and yourself from certain liabilities, you’re ready to do the next step which is market, promote and license those rights. There’s a bit to know and do before you take that step with your work. So there you go: we are now ready to start looking at this part of the industry and this particular article kicks it off.
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My work, this article, has been plagiarized and ripped off in its entirety by “songwriter/producer Colin Preston, a member of MySpace on 20 September 2007. He has claimed this article as his own by putting his name on it and that is a violation of my copyright. I am truly annoyed as there is no call for this. That Colin Preston places this article and pretends to be anti-piracy while stealing my work is hypocritical to say the least. He should have done the right thing.
[...] Colin Preston on his MySpace blog. The article that was ripped off was NDK Creative Artist’s “Traditional Model Music Industry Shows Increasing Signs of Collapse”, and the plagiarized version can be found here, until MySpace takes action as requested. Screenshot [...]
[...] has notified NDK Creative Artist by email today that his article Traditional Model Music Industry Shows Increasing Signs of Collapse which was misappropriated by [...]