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Lessons from the Music Industry: Should We Put Our Faith in Technology Companies?

Camper Van Beethoven (album)

Camper Van Beethoven (album) (Photo credit: Wikipedia)

For those of us who came of age in the post-punk musical era of the mid 1980’s, David Lowery holds a special significance. Lowery was (and remains) the leader of Camper Van Beethoven, a groundbreaking band that channeled the best of punk rock through an eclectic filter of ethnic folk music, ska, and country, all performed with humor, intelligence and exceptional musicianship. Through Camper Van Beethoven, and his later band Cracker, Lowery was a fierce critic of corruption in the music industry, from shady nightclub owners to perhaps the greatest takedown of corporate RIAA greed ever written.

Which is why it was surprising, if not downright shocking, to come across this recent piece by Lowery, “Meet the New Boss, Worse than the Old Boss?” which declares that musicians were better off under the thumbs of the RIAA than they are with their new taskmasters, digital technology companies:

I was like all of you. I believed in the promise of the Internet to liberate, empower and even enrich artists. I still do but I’m less sure of it than I once was. . . . I feel that what we artists were promised has not really panned out.  Yes in many ways we have more freedom. Artistically this is certainly true. But the music business never transformed into the vibrant marketplace where small stakeholders could compete with multinational conglomerates on an even playing field.

In the last few years it’s become apparent the music business, which was once dominated by six large and powerful music conglomerates, MTV, Clear Channel and a handful of other companies, is now dominated by a smaller set of larger even more powerful tech conglomerates.  And their hold on the business seems to be getting stronger. . . .

Everywhere I look artists seem to be working more for less money.

Before you dismiss Lowery’s complaints as the bitter tears of an aging hippie, take a moment to read through his qualifications as a musician, programmer, and entrepreneur, and note the 20 years he’s spent working with a “freemium” business model. His thesis is fairly straightforward — despite the poor way in which music labels treated musicians, they shared a common goal and offered at least some level of support and insulation from financial risk. The new landscape is instead dominated by technology companies who see all creative content as mere fodder for fueling their own business models (selling ads or devices for example) and they offer no support, no insulation:

Things are worse. This was not really what I was expecting.  I’d be very happy to be proved wrong. I mean it’s hard for me to sing the praises of the major labels. I’ve been in legal disputes with two of the three remaining major labels. But sadly I think I’m right. And the reason is quite unexpected.  It’s seems the Bad Old Major Record Labels “accidentally” shared  too much  revenue and capital through their system of advances.  Also the labels  ”accidentally” assumed most of the risk. This is contrasted with the new digital distribution system where some of the biggest players assume almost no risk and share zero capital.

The new bosses further cement their position by “waging a cynical PR campaign that equates the unauthorized use of other people’s property (artist’s songs) with freedom.” Through an army of “quasi-religious” surrogates (“freehadists”), the industry pushes for a “Cyber-Bolshevik campaign of mass collectivization,” where creative output is devalued. He sees it as particularly cynical because there’s one exception to this devaluation, one type of IP that is seen as sacrosanct — and that exception is software patents.

Lowery states that suggestions that artists simply need to find a new business model are a clear indication of awareness that artists are getting a raw deal. The new business model is already here, it’s been in place for over 10 years, and it’s making an enormous amount of money. But very little of that money goes to the creator.

At some point, one has to question whether it is still possible to earn a living as  a musician, or any type of creator. William Gibson, in a speech from 2003 makes the suggestion that those times are gone:

Prior to the technology of audio recording, there was relatively little one could do to make serious money with music. Musicians could perform for money, and the printing press had given rise to an industry in sheet music, but great fame, and wealth, tended to be a matter of patronage. The medium of the commercial audio recording changed that, and created an industry predicated on an inherent technological monopoly of the means of production. Ordinary citizens could neither make nor manufacture audio recordings. That monopoly has now ended. Some futurists, looking at the individual musician’s role in the realm of the digital, have suggested that we are in fact heading for a new version of the previous situation, one in which patronage (likely corporate and nonprofit) will eventually become a musician’s only potential ticket to relative fame and wealth. The window, then, in which one could become the Beatles, occupy that sort of market position, is seen to have been technologically determined. And technologically finite…It may well be that the digital will eventually negate the underlying business model of popular music entirely. If this happens, it will be a change which no one intended, and few anticipated, and not the result of any one emergent technology, but of a complex interaction among several.

Lowery offers no answers here, just a hope for an honest discussion of what’s going on that will possibly lead to new approaches. It’s a long piece, but one worth reading, filled with both humor and real-world numbers, and a particularly informative explanation of how Facebook and YouTube help garner attention for a musician, but ultimately steer their listeners away from the musicians themselves.

Cory Doctorow makes a related point about the publishing industry in a recent column, where he goes to great pains to contrast publishers, who he sees as virtuous, with other media companies.

In publishing, the publisher pays . . . expenses out of its pocket, and the author isn’t expected to pay it back. . . . Publishing doesn’t do debt slavery.

It’s true that very few writers get rich or even make a living off their book deals, but that’s because their books don’t sell very well. It’s not because publishers have stacked the deck against writers in the way that other entertainment bogeymen have for their creators . . . writers get square deals.

Doctorow thinks this is a key message for the survival of the publishing industry, that we can build support by making it clear that we’re, as he puts it, “on the side of the angels.” This was a continuous theme throughout the recent 2012 Society for Scholarly Publishing Annual Meeting — that we need to do a much better job explaining to the world just what it is that publishers actually do.

The scholarly community itself needs to understand the perils of the musician’s path. Would-be reformers are ready to tear down the publishing industry and replace it, often with the apparently not-so-benevolent rulers of Silicon Valley and other privately held for-profit start-ups. Publishers at least share common ground with the research community. Producing high-quality books, journals and other forms of content is the ultimate goal, not a step along the way toward selling user data to advertisers.

Even better for the researcher, much of what is seen as a monolithic, corporate industry is in fact owned and run by the academic community itself. Through not-for-profits, research societies, and university presses, researchers control their own destinies and can do what’s right for scholarship, rather than what’s needed to sell someone else’s unrelated product.

If your priority is the dissemination of knowledge, then partnering within your own community to further that goal makes a lot more sense than turning over the future of scholarship to those who see it as a means of selling Kindles or iPads. The “scorpion” at the very heart of a company like 23andMe ultimately sets them at odds with the needs of the research community. Even a seemingly benign overlord can morph over time into something else in order to meet shareholder demands. Google’s recent acceptance of paid inclusion in search results, something they once declared “evil” and they swore they would never do, is a prime example.

So many of the current movements in the scholarly publishing space revolve around control — who holds the copyright, who gets to re-use the published material in new ways.

If the research community wants to reclaim the ownership of its output, then it would be wise to truly do that, and to not merely trade one set of commercial owners for another.

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About David Crotty

I am a Senior Editor with Oxford University Press' journal publishing program. Prior to that I served as an Executive Editor at Cold Spring Harbor Laboratory Press, and was also the commissioning editor for their book publishing program. Many years ago, I was a research scientist, receiving my Ph.D. in Genetics & Development from Columbia University, and doing postdoctoral research in neural development at Caltech.

Discussion

27 thoughts on “Lessons from the Music Industry: Should We Put Our Faith in Technology Companies?

  1. Given that scholars don’t sell their songs, it is hard to see the threat you propose. On the other hand it might be a good business plan. Can you elaborate on how this might go? In any case it is fascinating to see how technological revolutions spawn ideological battles. It is more about visions than reality. Visions are hard to fight.

    Posted by David Wojick | Jun 5, 2012, 8:33 am
    • Scholars most certainly do sell their books, databases and other products. And I was, for several years, the editor in chief of a journal that pays authors a royalty on their papers based on usage (http://www.cshprotocols.org). So it is a possible pathway.

      The threat I see though is the devaluation of the material and that can come through a variety of channels, not just the price paid for the content. If the content is just fodder used to sell ads or devices, then the drive is to produce it in bulk at the lowest cost possible, potentially sacrificing many of the things that are important to scholars (peer review, editing, technological improvements, etc.).

      Posted by David Crotty | Jun 5, 2012, 8:38 am
      • So you are basically talking about an advertising based mega journal, or some such? The third way, to pay, versus subscription or author pays? (The fourth way being everyting is free and nobody gets paid, a vision indeed.) I do not see this working, the audience being too small, but if it works I have no objection to it. Ideological arguments against technological change tend to be losing propositions. It is not up to us how science is communicated, hopefully it is up to the market, which is the people who pay.

        Posted by David Wojick | Jun 5, 2012, 8:51 am
        • I’m talking about a couple of different things. For the book author, the notion of cutting out the middleman and self-publishing through Amazon or Apple is appealing. But there are disadvantages as well. For Amazon, eBooks are a bulk business, and their goal seems to be to come as close to giving content away for free as possible in order to sell more Kindle devices and establish a monopoly hold on the market. Apple’s iBookstore seems almost an afterthought, a means to sell devices rather than an end unto itself. There are dangers when your hard work stops being the focus of your partner and instead becomes a tool they use to pursue their true focus.

          For the journals, there are ideas floated about toward tearing down the system altogether or at least superceding it with various social media products, where a paper is posted and discussed and becomes a living document. These are all interesting ideas, but if implemented, I’m suggesting that for those who see the commercial publishers as incompatible with scholarship, the commercial owners of these new services are likely to be even more incompatible. If control of research results is important, than truly control them yourself, rather than just giving them away to a new set of overlords.

          Posted by David Crotty | Jun 5, 2012, 9:23 am
  2. Excellent piece, David. Equating “free” (the economic model) with “freedom” (a moral position) has been a very powerful advocacy framework, as Lowery describes.

    Can you think of an equally powerful framework that encapsulates the value of publishers?

    Getting together and talking about how publishers need to do a better job elucidating their value proposition is one thing; encapsulating that proposition into a clear, simple and memorable framework is the real challenge for publishers.

    Posted by Phil Davis | Jun 5, 2012, 9:12 am
    • Absolutely. We don’t have the same compelling “Luke Skywalker vs. Darth Vader” sort of narrative to emotionally cement our story to listeners. But there’s so much that we do that goes unnoticed that we at least need to make a start on being more transparent and pointing out the benefits we offer. Things like the tremendous amount of financial support for research and research societies that journals provide, or the huge investments publishers are making in new technologies to help drive the pace of research are just a few examples.

      Posted by David Crotty | Jun 5, 2012, 9:28 am
      • Unfortunately, I don’t think this is enough. Moral arguments always trump economic ones. In order to convey the values you talk about, publishers have to come up with some propositions that are able to be conveyed in simple phrases and story lines. Consider what you’re up against:

        Taxpayers paid for it. They deserve access. (message: transparency and accountability are democratic rights)

        Publishers take free research and sell it back at egregious profits (message: publishing is an amoral business)

        Open Access advocates (message: fighting the man for what is right)

        Closed Access journals (message: the man is preventing you from your unalienable rights)

        While I agree that you have to convey these values, you cannot do them effectively without coming up with a value framework and the language that encapsulates those values. Narratives would help too.

        Posted by Phil Davis | Jun 5, 2012, 10:21 am
        • I took David C. to be talking about a commercial threat, being taken over by mega technology companies, or some such. Moral arguments tend to win in the government policy arena, which is quite different, although the industry perceives itself to be threatened by both. (Both threats may be overstated.) Conflating these two threats is a problem in itself.

          Presumably the issue of conveying value is related to the policy issues, not the commercial issues. The bottom line is the industry cannot fight a Utopian vision with an alternative Utopian vision. The values are pretty basic, like service, efficiency, not to mention intellectual property. The primary issue is the lack of viability of the Utopian vision, and this point is being made. The value of the existing system does not have to be proven. If its existence does not prove its value then nothing can.

          I have been working with industries that got into the government cross-hairs for a long time. Being called evil is hard to take. A reasoned response is the best defense against Utopian reform movements. In my view the industry is doing pretty well at this point.

          Posted by David Wojick | Jun 5, 2012, 12:37 pm
        • Phil, You’ve hit the nail squarely on the head. The PR and legislative efforts of traditional publishers are powerless, even counterproductive, in this context. STM Publishers should be rebranding themselves as “managers of process” rather than “sellers of (only-the-good) content”. The global spend for R&D is $1T. Ensuring that taxpayer funds are invested optimally using good process management is highly defensible. (OK, but not as sexy as freedom, liberty etc.).

          Posted by Richard Wynne | Jun 6, 2012, 2:42 pm
  3. In communicating value, is there anything publishers can learn from other bad-reputation industries? Big pharma, airlines, cable companies all suffer from poor PR images. Makes me think of Animals song: I’m just a soul whose intentions are good, oh lord, don’t let me be misunderstood.”

    Posted by Phil Wallas | Jun 5, 2012, 10:41 am
    • In communicating value, is there anything publishers can learn from other bad-reputation industries? Big pharma, airlines, cable companies ….

      I guess they should learn that a poor PR image is a small price to pay for egregious profits?

      (not sure Airlines should be in your list. At times they suffer from competition).

      Posted by Dave Pullin | Jun 5, 2012, 3:50 pm
      • Let me break down the gripes people have against these various types of companies you call “bad reputation” companies.

        Big pharma — I assume you mean their tendency to overstate benefits and downplay risks, exploit patent protection to recoup R&D investments, and medicalize our lives? Is that right?

        Airlines — I assume you mean shoddy service, scheduling problems, cramped planes, a slow reduction in perks for flying, and so forth?

        Cable companies — For this one, all I can assume you mean is big bills.

        I think it’s clear that various industries have various reputations for different reasons. Can you name a “good reputation” industry? Please. I can’t think of one I can’t take down a notch or two quite easily. Hospitals? Day care centers? Private schools? Government?

        As for your blithely tossed Molotov cocktail of “egregious profits,” most academic publishers are not-for-profits; and what is “egregious”? Is there a magic number beyond which egregious invariably occurs?

        Posted by Kent Anderson | Jun 5, 2012, 4:03 pm
  4. I don’t believe that the current state of the music or publishing industry was unforeseeable. In fact, classic economics teaches that if you reduce barriers to entry than the cost of the product in question will fall. The internet, is nothing if not a great engine for destroying barriers to entry. Content providers of all types make less because the internet allows anyone and everyone to create content. Consequently, there has been a huge increase in supply. Any first year economics student will tell you; a huge increase in supply inevitably means falling prices. In medical sciences the amount of content produced each year has doubled since 1997. In the age of print, it would have been impossible to increase content output by that amount. The natural consequence of this increased output is the circumstance in which we find ourselves today. David, there is no harm in publishers making their case to their customers, but in the end I don’t think that strategy will work because it does not address the real problem – too much supply.

    Posted by Mark Danderson | Jun 5, 2012, 1:45 pm
    • I think the “no one intended or anticipated” part of Gibson’s quote is fair–for the creators of the internet, a revamping of the music industry was likely one of the farthest things from their minds. Once the industry came into that realm, then yes, you’re right, the future became eminently predictable. This though, didn’t stop the industry from rushing into a short-term set of profits converting from analog to digital media, despite the long term consequences that were clearly going to result.

      Posted by David Crotty | Jun 5, 2012, 1:57 pm
    • Another consequence of the lowered barrier to entry is that the pre-publication screening and development of content/talent/etc. is no longer as important, economically speaking at least. When the costs of entering the publishing or record industry and the costs of producing each individual product were high, those companies had to put a lot of effort and resources into figuring out what products would be best to use their limited production resources on (in terms of risk and return on investment).

      But now that content development (A&R work, peer review, acquisitions editorial author development) has been decoupled from a monopoly on the means of production, the question is how do we give these things intrinsic economic value?

      Clay Shirky’s vision of the work is one in which this sort of filtering is done after the fact, but this means that everyone has to be their own entrepreneur. And it also means that there’s no place anymore for the Jerry Wexlers and Ahmet Erteguns of the next generation. And I really, really believe that what people like Wexler and Ertegun did was culturally valuable above and beyond the value to their companies of making good business decisions on what music to release.

      Posted by Joel T. Luber | Jun 5, 2012, 2:56 pm
    • ” … because it does not address the real problem – too much supply.”

      Can you imagine a world where “the real problem” was “too much supply”? Too much food, too much energy, too much knowledge, too much education, too much art, too much literature, too much space, too much land

      .. can you explain to me why that’s a problem? So why is it “the real problem” in this case?

      Posted by Dave Pullin | Jun 5, 2012, 3:56 pm
      • In economics too much supply means more than people can use. Wheat rots. Articles go unread. Graduates cannot find jobs. Life is about balancing supply and demand. Economics is the science of that balance.

        Posted by David Wojick | Jun 5, 2012, 5:29 pm
  5. A difficult and complex question. Some years ago in London, any person you met carrying a musical instrument carried a sticker saying “defend live music”. The iTunes revolution seems to me to have made that history, because performers now have to perform live in order to make money. Is that not better than and industrywhere muscians only performed in recording studios, and sat back waiting for royalities?
    On the other hand, I take the point. It is a case of beware of “Vlad the Impaler”. He started of quite nice, helping peasants, etc, but as we all know got a rather nasty!

    Posted by Lorraine Estelle | Jun 5, 2012, 1:52 pm
    • I suppose you’d have to ask a musician which is preferable. Most humans like to have nice things like a roof over our heads and food to eat. Given a choice, I’m guessing most musicians would prefer a system that lets them earn more for their efforts, regardless of the venue. Recording music certainly never stopped anyone from performing live.

      Posted by David Crotty | Jun 5, 2012, 1:59 pm
  6. Dave, I was referring to the publishers perceived problem of their work not being valued (to the degree they think appropriate). The suggested solution was to communicate their message better. My response was that approach would fail because the issue is a supply issue and not a communication issue.

    As to the question: can I imagine a world where there is too much supply? Yes, I can imagine a world where there is too much food; it is called obesity. If everyone had a doctorate then we would be hiring doctors to sweep floors and wash windows (which would be a huge misallocation of resources). As for art, art has value because it is rare. If everyone could paint like Picasso or sing like Pavarotti then neither music nor art would be special and neither would bring as much joy. As for a world with limitless literature, we have that already, it is called the internet; or where you referring only to good literature? What a horrible world that would be because there would never be enough time to read it all. Scarcity is not always a bad thing, sometimes an object brings joy to life merely because it is rare. The best example of a rare joy is love. How exhausting it would be if we loved everyone equally.

    Posted by Mark Danderson | Jun 5, 2012, 4:56 pm
  7. This is very interesting. While I don’t have numbers to share, the scenario in Indian music industry is very different. The industry has been insulated from technology “labels” since most of the music is embedded and is an essential part of movies. There are very few independent bands. As a result, singers and music directors are as successful as the movies they “participate” in. If the songs click or the movie is a hit, the artists become successful. In a sense the movie directors and producers are the patrons. Very interesting to see the contrast.

    Notably, the traditional Indian classical music scenario, where patronage is essential, is endangered.

    In context of the article, would the public radio model (pledge drives) be the emergent model?

    Sunil

    Posted by Sunil chitale | Jun 6, 2012, 12:40 am
  8. I find Lowery’s comments ill researched and subjective. He’s the one who signed the contracts now forming the backbone of his disputes. Sure if you look at Spotify the digital model can look worse than the bloated and archaic old-industry model but take our own platform Aurovine and both artists and fans are implicitly empowered. Artists should research properly before signing up for endless vanity sites and hoping things happen.

    Posted by Aurovine (@Aurovine) | Jun 13, 2012, 4:53 pm
  9. In reply to LORRAINE ESTELLE’s quote “The iTunes revolution seems to me to have made that history, because performers now have to perform live in order to make money. Is that not better than and industry where muscians only performed in recording studios, and sat back waiting for royalities?”

    Many musicians playing out to make a living are playing covers, standards, or tributes. The creative or process goes no further then the sheet music that’s being interpreted. Their priority is mercy of the venue. Not intellectual creation or establishment of a fan-base. Original artist struggle. Especially on the road! The DIY “live show” trend now seems to be going virtual. Like live chat room shows and fan interaction in the virtual setting. Some of the shows I’ve seen are pretty absurd and display a very amature ridicule of the craft itself. Some show streams have been pretty neat,. but the talent pool is drowned out by the all digital banter and nonsense. I feel this only perpetuates and sustains the existing problem. The validity of art itself as a commodity.

    Posted by Dylan Paul Mathis | Aug 17, 2012, 10:14 am

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