By David Lowery

Part 1 of a 5 part post

(Copyright in the author, used by permission)

What follows is based on my notes and slides from my talk at SF Music Tech Summit. I realize that I’m about to alienate some of my friends that work on the tech side of the music business. These are good well intentioned people who genuinely want to help musicians succeed in the new digital paradigm. But if we are gonna come up with a system to compensate artists fairly in the new digital age we need an honest discussion of what is going on. The tech side of the music business really needs to look at how their actions and policies negatively impact artists, just as they have pointed out the negative effect record company actions have had on artists.

Too often the debate has been pirates vs the RIAA. This is ridiculous because the artists, the 99 percent of the music business are left out of the debate. I’m not advocating going back to the old record label model, to an industry dominated by the big three multi-national labels. This is a bit of hyperbole intended to make us all think about this question: Is the new digital model better for the artist?

Meet the New Boss, Worse than the old boss

Introduction

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 come here because I want to start a dialogue. 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.

On one hand it doesn’t bother me because the “new boss” doesn’t really tell me what kind of songs to write or who should mix my record. But on the other hand I’m a little disturbed at how dependent I am on these tech behemoths to pursue my craft. In fact it is nigh impossible for me to pursue my craft without enriching Apple, Amazon, Facebook and Google. Further the new boss through it’s surrogates like Electronic Frontier Foundation seems to be waging a cynical PR campaign that equates the unauthorized use of other people’s property (artist’s songs) with freedom. A sort of Cyber –Bolshevik campaign of mass collectivization for the good of the state…er .. I mean Internet. I say cynical because when it comes to their intellectual property, software patents for instance, these same companies fight tooth and nail.

Meet the new boss, he wants to collectivize your songs!

The other problem? I’ve been expecting for years now to see aggregate revenue flowing to artist increase. Disintermediation promised us this. It hasn’t happened. Everywhere I look artists seem to be working more for less money. And every time I come across aggregate data that is positive it turns out to have a black cloud inside. Example: Touring revenues up since 1999. Because more bands are touring, staying on the road longer and playing for fewer people. Surely you all can see Malthusian trajectory?

SLIDE 1

I realize that some of you may not know much about me or even who I am. I like to think that I am uniquely qualified as an artist, entrepreneur and geek. I was trained as a mathematician. My first job after I graduated involved being the systems operator for an MPM OS system and I wrote a lot of DBASE IV scripts. I had a fascination with the old RPG punch card programming language. I am deeply involved in the digital amateur radio world. You can sometimes find me operating PSK31 on 20 meters. I spent some time in Chicago near the CME. I worked as a “Quant” doing some semi high frequency trading. While there I became involved with a company called www.thepoint.com which evolved into www.groupon.com.

I can out geek most of you.

++++++++++++++++++++++++++++++++++++

My company is faster than your company.

Musicians are constantly derided by the Digerati. It’s usually after someone like myself suggest that if other people are profiting from distributing an artist’s work (Kim Dotcom, Mediafire, Megavideo, Mp3tunes,) they should share some of their proceeds with the artists. At this point the Digerati then proceed to call us “dinosaurs”, “know nothings” or worse. Suddenly your Facebook page is filled with angry comments from their followers that seem to all be unsuccessful Canadian hip hop artists who proclaim:

“We are gonna turn you into Lars Ulrich and bitch your band sucks anyway”.

(At the risk of getting the Canadian non-lethal equivalent of a “cap in my ass” I have to say: I am so scared!)

The most virulent of these folks are almost always unsuccessful musicians. It fascinates me. I can only surmise that part of their anger seems tied to the hatred of the record companies that rejected them. Successful even marginally successful musicians are often viewed as some kind of traitors. A special kind of hatred is reserved for these apostates. The file sharing/ cyber locker industry has figured this out and purposely stokes stokes them with a faux populism. I would say it’s juvenile but it’s really more medieval. That’s why I call them Freehadists. People like me are actually looking out for these young musician’s rights. I am trying to keep the new boss from screwing them. They dont’ realize they are doing the work of The Man. But I digress.

Despite the tech lobby’s portrayal of musician as luddites or doddering old hippie, musicians, especially independent musicians are often the early adopters of technology. We are always a couple years ahead of the “straight” business world when it comes to technology. As an example we perfected “social marketing” before it even had a name. We were outsourcing and insourcing services for our highly flexible virtual companies when Windows 3.0 was state of the art.

When it comes to the web, we not only understand the consumer side of the Internet we understand the producer/supplier side as well. And like any producer or supplier we want to be compensated. The reason the Digerati are so fixated on “what the consumer wants” is simply because most of them have only experienced the web as consumers.

“The consumer wants music to be free” they shout as they pound their tiny fists on their Skovby tables.

The consumer also wants cars to be free. And beer. Especially beer. But any market involves a buyer and a seller. A consumer and a producer. If GM can’t afford to give away their product for free it ain’t gonna happen. No matter what the consumer wants. (See my note on “digeridiots”)

Often overlooked by Digerati, is the glaringly obvious fact that musicians and bands have long been a part of the new economy. We’ve been a web-enabled business since 1992. We’ve been a web-based business since Napster. Virtually every interaction that an artist and a fan have is web based. Even live concerts are web-enabled. The artist and the fan communicate about the upcoming concert through Twitter, Facebook events or traditional email. Recording has long been web enabled. We might all get together in the same spot to record basic tracks, but oftentimes overdubs and even mixing happens remotely, exchanging files and notes via the web.

So please forgive us if we roll our eyes at the Digerati who tell us we need to “embrace the web”, “work the new digital ecosystem” or come up with a “new model”. It’s a little like your great aunt seeing you at thanksgiving dinner and telling you something like:

“You should make some T-shirts for your band and sell them on tour”.

You politely smile and try not to roll your eyes.

Actually that’s the number one “new model” that the Digerati suggest. Sell T-shirts at your shows to make money! This despite the fact it’s not new. Bands have been selling t-shirts at live shows since the early 1970s. Recording albums to sell a few t-shirts is a terrible way to make money. Thanks for the advice but no thanks. Plus t-shirts are just as bootlegable as music.

“Information wants to be free. Information also wants to be expensive”-Stewart Brand

Everyone knows there a second half to his quote? Right? Cause I usually only see the first sentence bandied about in technology circles.

Sound recordings are information. Sound recordings are not cheap to make. The technology is not the expensive part of making songs and sound recordings. It hasn’t been since the late 1980s. Many in the tech community blindly assume that recording budgets have gone down because the technology is less expensive and provides greater productivity. With absolutely no facts to back up their argument I often hear:

“Well artists are making less money but recording costs are lower, so the artists are doing okay”.

In other words technology has lowered your revenues in the form of unlicensed file-sharing on an industrial scale but that’s okay because Digidesign (the makers of Pro-Tools™) has given back some cost savings. As if Kim Dotcom and Digidesign share the same bank account. These people believe in technology like it is a religion. The lord Technology Industry taketh, and The Lord Technology Industry giveth back.

The data I have from recording studios says something different. Recording budgets are lower because artists spend dramatically less time recording. They just don’t have the money.

Recording budgets didn’t start shrinking until after the advent of file-sharing. 2002 ish. While most of the improvements in technology and gains in productivity occurred in the early 1990s. By 1996 the home studio/pro studio production chain was firmly in place. Pro studios used for “tracking” and “mixing.” Home or project studios used for overdubs and editing. If lower recording budgets were caused by improvements in technology they should have started shrinking 10 years earlier.

Sound recordings are very labor intensive. If you want to make good ones you are relying on highly skilled labor. The cost of sound recordings is largely dependent on labor costs. Technological advances have little effect on recording cost.

This is the main problem with the technologists contention recordings should be free. They seem to think that the only people who work on recordings are the touring performers themselves. Artists still have to pay for that highly skilled labor.

Is the mix engineer gonna follow us around on tour hawking HIS T-shirts to the audience?

SLIDE 3

Nevertheless, I’m what you might call a “Freemiumnista”. I was a Freemiumnista before there was an Internet. I get that not all interactions between fans and artists should be monetized. I get that you can give away something and make more money in the long run. Virtually every live show we’ve ever played is available free on archive.org. Even before the internet we’ve encouraged and organized tape trees and later CD burn trees for distributing our live shows And we spend a lot of time trying to get people to buy our studio albums as well.

Unlike a lot of the Digerati I have walked the walk. I still do.

I’ve embraced many of the things that those on the tech side of the music business want musicians to embrace. But what many of you forget is that IT IS MY CHOICE whether I choose to give away my songs or sell them. IT IS MY CHOICE how and where to distribute my songs. IT IS MY CHOICE to decide which websites get to exploit my songs. Like it or not, the right to control one’s intellectual property (like songs) is a constitutional right. It is also part of every international human rights agreement. Technology company funded blogs that think there should be no song copyrights are actually advocating violating my constitutional and human rights!

Many in the digital music industry rightfully condemn the past exploitation of artists by record labels. But at the same time they seem to be doing the same thing. Trying to bully artists into giving up their rights so that companies like MegaUpload or YouTube can make money is the same thing.

With exploitative record contracts The Old Boss tried to take your songs a dozen at a time and pay you pennies. The New Boss wants to take ALL of your songs, past present and future and pay you nothing.

I’ll make technologists a deal, I’ll give up my song copyrights if you give up your software patents. Software patents are even less unique than your typical song. So this should be easy right?

Talk the Talk. Walk the Walk.

http://www.huffingtonpost.com/2011/08/15/google-motorola-mobility_n_927670.html

http://www.huffingtonpost.com/2012/03/12/yahoo-sues-facebook-patent_n_1340032.html

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Read Part 2.

Read Part 3