July 30, 2010 MP3 Happened - Now What??
It wasn’t the beginning of the end, just a harbinger of it. Subsequent formats such as aac, ogg later sprang up based around the same ideas, and the overall concept had already been made a reality by prior formats such as ac3 and mp2 - they just didn’t do it as *well* as mp3 did. Discard psycho-acoustically negligible information to gain a 5-12x reduction in file size - meaning a song could comfortably and easily be ported around the internet, even in the days of dialup.
It’s amusing to me now that the idiotic reasons used to justify piracy now were the same idiotic reasons given to me at the outset. 1999, a fellow university student told me about this new thing called MP3, which, due to the aforementioned properties, would allowed us to ‘stick it to the fat cats of the music industry’. Laughably, sadly, the social experiment that is filesharing has shown a picture of a harsher, not gentler world, wherein the consumer and cohorts-in-trade the anarchist, the internet freedom-fighter, and even the starry-eyed (and easily influenced) teenager, are all as duplicitous as the aforementioned ‘fat cats’. Just as ignoble, exactly as precious, demanding, and greedy. If it’s taught us anything useful, it would be that the individual in modern society is usually as unjustifiably unethical as the institutions they claim to hate. Leaving aside the archaic social rhetoric used by pirates to justify their means and ends, what does MP3 mean to us?
There are, or were, two music industries, when it comes to online distribution. One based on the old model, one based around the rise of the ‘long tail’ of independent music. The old model propagates the fame and fortune of a select few, based entirely around CD/online sales and extensive advertising. The new model propagates the more sporadic income of lesser-known (usually independent) artists while eschewing the more wholesale artists. The independent artist, who’s monetary benefit previously consisted of minor concert sales and cd sales to friends, with the advent of MP3, suddenly had a platform which exposed them to millions of people, if they were any good, without having to rely on the goodwill or approval of the old model record companies. Witness then the demise of the first ‘new industry’ music services - MP3.com (in it’s first incarnation), riffage.com, a host of others. All failed to satisfactorily monetise their services in a way that satisfied both the consumer and the independent artist, and were competing in an uphill battle against another strain of social virus - MP3 piracy. The peer to peer networks (and later, torrent sites) which sprung up almost overnight to enable music-sharing on a super-massive scale, made comparisons to tape or cd piracy irrelevant. With virtually no cost in terms of storage medium (ala tape or CD), negligible waiting-time, and no necessary relationship to the person you were getting the music from, piracy was made accessible to the masses on an unprecedented scale.
It would be years before the extend of the damage became obvious to industry outsiders, but by 2001 the effect it was having on the new industry was profound. How do you compete with name-brand artists with massive marketing campaigns when they’re made available for free? You can’t. You might be as good as them, but people are generally pretty lazy - they won’t bother trying something new for cheap instead of something they know for free - especially if they’re not made to feel bad for destroying the emerging cottage industries by their friends, peers, and society at large. Even today, if you manage to ‘make it’ in the current climate, as soon as an independent gets some sort of recognition their tracks are pirated wholesale - usually before they even hit the online shelves. The “rebel” pirate then laughs ‘sink or swim’, in a strange, mind-meltingly laissez-faire indictment of you not agreeing with their (disingenuous and resource-specific) communistic outlook on ownership. Most pirates are impatient and/or callous… get used to it. While some would urge the independent artist to capitalise on the relationship with their audience - by selling t-shirts, concert tickets, pre-funding album costs or whatever - they ignore the fact that while t-shirts and everything are… just *fantastic* (anyone other than a big-name artist generally loses money playing live BTW), the reasons people buy t-shirts in the first place is because they like the music - not the other way around. So why aren’t people comfortable paying for music and not t-shirts? Because they’re not used to it any more. No other reason.
So now what? Where do we go from here? Assuming of course, that we still want good music to be made, for it to be produced to a level of quality we’ve become accustomed to since the 70’s, and that we don’t want to have to drill through mounds of mediocrity to find the few gems at the bottom of the barrel (the very few who, despite there being no future in it, still decide to put time and energy into making miraculous music)? As stated there are two music industries - the old, which is supported by radio stations, tv channels, some websites and media, and the new, which is represented by…. well, websites, and the strength of the material contained therein. Here’s the thing. They’re both failing online. And the second reason they’re failing online (piracy being the no. 1 reason) is by trying to coexist on the same platforms. Lets take it down to basic steps - if you want to find something new, different, you go to one of the new websites - amiestreet, emusic, etc. What’s the problem? Those websites have all compromised their userbases by letting in material from the big four - SONY, BMG, etc - or from smaller but still powerful labels (4ad for example). Now these companies demand, with their financial leverage, that these smaller companies change their pricing models, exploit their customers, lock out markets in given countries. This kills the userbase. Emusic.com had a fanatic, and media-hungry userbase, all of which were willing to pay good money for good, new, music (hell, even bad new music sometimes). They managed to screw it up by allowing Sony to spin their spurs. Letting in established industry artist material makes it more difficult for the user to find the less mainstream stuff they want. What does it do for the artists already on the network? It makes it more difficult to compete, and makes their material more expensive to buy. Does it draw in new customers from other networks? Nope, just ruins a perfectly good indie-music cottage industry by trying to merge with the old model. Most of the popular indie networks have gotten greedy and gone down this route - unfortunately, and to the detriment of their network, their artists, their userbase, and the industry.
Now look at itunes. This is a classic example of the ‘old model’ thinking - name-brand artists, locked into particular countries (no access outside of itunes-specified countries), locked into specific media-devices (computers and ipods respectively), locked into a particular software app - and a pretty awful one at that - with the store taking 10% of all profit, the record companies or media distributor (in many cases) taking the majority of the rest, the artist getting… very little indeed. Why would any self-respecting indie artist, in their right mind, want to get their stuff onto itunes? It doesn’t compute. For one, they lose most of the money that gets made, and secondly they’re competing with big names that are better-advertised than they are, on a platform Designed for those artists… so is it any surprise whatsoever, when indies find their itunes sales - and profits - virtually non-existent?
A complementary problem for internet distribution is playback royalties and localisation. The internet is a global phenomena - as is music - the independent artist understands and capitalises on this. It’s in their favour. However for the major labels the rights to music and the terms for royalties are managed differently from country to country. The old model of collecting royalties via artist representation agencies is very effective for old media like radio and tv, but quite cumbersome for online. Let me explain - do you think it’s simpler for the royalties from streaming music to go directly to the artist through the site’s internal payment system, or to be negotiated through a series of agencies, all of which take their cut, to finally be paid to the artist once every quarter-year (if processed correctly)? Thought so. Further, whether or not a streamed piece of music constitutes a ‘playback’ (with royalties paid to the artist) in the sense of what radio does, or a ‘preview pending possible purchase’ (with no royalties) in the sense of what a cd store does, should probably come down to the discretion of the service provider and the artists involved. But this per-platform discretion goes out the window once the record companies get their fingers in. Because not only is all that music legally represented by various agencies (apra, amcos, etc), but as mentioned, the rights to each track are managed independently from country to country. This is why you can’t, now that Sony is involved, get emusic in most countries. This is why most of the tracks on amiestreet aren’t available in most countries. But do you think the independent artist cares whether their playback rights (in terms of streaming) are getting represented online? They’re just happy that people are listening to it! Goodbye indie “World Wide” Web! Hello localised digital music store, managed by the old guard in blue uniforms.
And the old guard don’t seem to understand the world wide web, or mp3, or in fact their customers. If they understood, they wouldn’t be locking out every country on the globe bar a select few, stopping their media from being played on the VAST majority of media players - instead, they gave people a strong incentive to pirate (or encode their own cds - and either way they lose) in order to get songs onto their $20 mp3 players, by not providing straightforward mp3’s, instead providing proprietary-format music through a select few players…
If they understood, they would be leaving the indie cottage industries well-enough alone, instead focusing on getting Their music onto platforms which cater specifically for the non-indie scene, and which go down the usual channels in terms of playback royalties. If they understood, they would realise that consumer greed cannot be controlled through fear tactics, and be focused on destroying the ‘enablers’ (piratebay, limewire etc) instead of scaring customers or, conversely, relying on the (lack of) ethics of an intolerant, fickle, media-saturated market. This is not hard to do, since all of the content enablers are easily breaching international copyright laws - you cannot call the man who hosts a black market blameless simply because he sells no goods himself.
So - what is the only profitable mid-term future for music?
Step 1. Separate the content streams for independent and label-owned music. The two demonstrably cannot get along, draw different crowds, different models, royalty requirements and pricing regimes.
Step 2. Eliminate or block on state-wide levels enablers of piracy - torrents (99% illegal, always) and peer to peer networks - and whatever else turns up. It is not possible to allow a system where an ISP can choose whether or not to enforce this, as ISP’s are entirely reliant on the support of their customers - if only one blocks torrents, clients will move to another who will. It has to be enforced on a state-wide level or not at all. This is the only way to ensure any future for media content, and has already been effective in parts of Europe. Advertising profits, selling t-shirts, concert tickets, and leveraging audience connection have all failed dramatically as replacements for traditional music revenue.
Step 3. Use MP3 or FLAC (open-source lossless format) only. Once a song is in a customers pocket, they should be able to use it regardless of playback device - all support MP3, few support other formats. AAC and ALAC (Apple’s proprietary lossless format) are unsupported by the vast majority.
Obviously this still isn’t the most happy future for musicians, as nothing stops ‘sneakernets’ - people sharing files with each other offline - without DRM. But the disadvantages of DRM have been shown to outweigh the benefits for everyone, at least when it comes to music. And the modern problem of piracy stems from the ability to trade with people you have no social connection with, creating effectively unlimited download possibilities and market saturation.
And the far future? With city-wide wifi and cheaper bandwidth a likely reality for most cities, and with the increasing popularity of streaming, a licensing model based around streaming of music rather than the traditional ‘offline storage’ formula seems likely. In this reality, managing music rights becomes cheap and painless - no longer is music locked into a particular player, device or piece of software, as any handheld device with an internet browser can playback streams, given a required logon. The separation between ‘streaming’ and ‘owning’ music might become an artificial distinction. Some music providers might encourage monthly subscriptions, some might continue with the per-song or per-album model and some might allow you to ‘sell’ your content back to the store once you tire of it. Either way, an instantaneous streaming model encourages diversity and the trialing of unknown material more than the long waits and organisation associated with downloading and offline storage. Though latecomers Spotify and Bandcamp can be seen as precursors of this archetype, both unfortunately embody the failings of the current old model (spotify’s localisation) and new models (bandcamp’s complete lack of monetising for streaming), respectively.
The only problem with this idea is people in rural areas - who still constitute some 44% of the world’s population (though probably less than 18% of the music-buying population) - tend to have more sporadic access to internet. It seems likely that offline storage, in whatever form (records, cds, mp3s) may have a future for that reason alone.
The central point of this article is that hopefully we can learn from the mistakes of the past - abolish piracy (in it’s current wholesale, socially-acceptable form - piracy will always exist in some form or another) - and get on with our media-generating lives. Because without that, music - recorded or live (and let’s stop pretending, in this media-centric age, that the two are financially separate) - has no monetary or creative future. It takes spare time and energy to create music, and piracy gives us neither. As a studio owner, it’s discouraging to have to tell artists that even if they ‘make it’, there’s not much of a living to be made out of selling songs nowadays (hey - even chinese artists aren’t happy about it ;)!). But it’s the truth - and until something changes, the age of recording music as a career and not just an “art-form” - including the drive and will to ‘make it’ in that field - will never return again.
- Soul Studios New Zealand. Matt Bentley was born in 1978 and has never fully recuperated from the ordeal. He’s fine though. Soul Studios (www.soulstudios.co.nz) is his work.
Reader Comments (5)
Nice to see an article about the problems with online music distribution other than the piracy issue.
For some reason, I was always rather sympathetic with file sharers. Since getting into making music myself, though, those feelings have drastically changed. As much as I deplore the state of the poopular music industry, I downright disagree that file sharing has in any way helped artists any more than it has hurt them. This article really shines some light on that. The separation between the majors and independents would be greatly beneficial, too, though keeping such a separation would require quite the commitment to the cause on the end of the developers.
For now, I'm a fan of Bandcamp and their message. While they may not have the streaming monetized, I think that giving listeners a chance to listen to your work IN FULL is extremely important. While it might be something they could do in the future, it's not a huge problem right now. They give so much power to the artists, where it belongs. Their site is spectacular, and every update seems like a blessing.
"Bandcamp's complete lack of monetization for streaming" is EXACTLY WHY THEY DON'T SUCK. If they introduced ads to the streaming player I'd be pulling all my accounts the same day.
Brian - Thanks ;)
Mark D - I agree - and bandcamp is great. Though - I think old/newskool separation is naturally-occurent - it's just that developers do as you say lose sight of the original goal.
Justin - that's fine but it can only last for so long. Many, many people only stream music and this is seen by many as the way of the future. Internet-mobile devices and cheap bandwidth mean downloading songs is no longer necessary for many, and this will grow over the next decade, I am certain of it. Bandcamp has to make money to stay afloat. It has recently started charging a percentage for downloads (http://routenote.com/blog/bandcamp-adds-transaction-fees-and-starts-to-make-money/) - and good on them for doing so. When the ratio of stream-to-downloads thins too much, free streaming will stop or they'll go under. I don't see other options bar advertising-supported streaming - no-one wants to go back to that - do they? (no they don't).
Thanks for reading-
m@t
Update: Amiestreet is no more. See what I mean?