Time For A Change

Yes, I know, this has been a while in coming.  A few in the indie world knew this was coming, and I’ve written and rewritten it a dozen times.  Quite honestly, there is so much to be said on this subject that I briefly considered writing an entire book on the subject.  Instead, I’ll subject you to dribs and drabs over the next few months.  The root of the issue presented here is that the entire music industry needs to change.

The deeper I plunge into the world of independent music, the more I am astounded by the antiquated and absurd rules in place, touted as there to ‘protect’ the artists, when in fact they hinder the artists’ ability to successfully market their music.  The rules exist at many layers, but there are a few that deserve special mention.

The Publishing Rights Organizations.    Here in the United States, these would be ASCAP, BMI and Soundstream ,most notably.  Their stated purpose is to protect the rights of composers and musicians by requiring licensing for public performance or purchase.  On the surface, a very noble endeavor, but as you dig in deeper, you see that the terms of that licensing benefits neither the artist or the consumer.

To give a little history, ASCAP holds the record for the longest running antitrust consent decree in US history.  Dating back to the 1940’s, it sets in place guidelines that no longer pertain to the business as it is designed today.  Over that 70 years, royalties have fallen far behind the pace of inflation, having only been adjusted twice in the span of that time.  It is no wonder that artists receive nothing close to meaningful compensation for the broadcast of their music.

In addition, the PRO’s have put in place ridiculous rules that hinder those trying to showcase music.  BNI requires a station’s website to close when playing music over the internet.  I find it hard to understand how this affects the performance of music.  Is it their position that you cannot multitask while listening to music?  Internet stations are limited in the amount of time they may use and the quantity of music they may play over a period of time.  Internet stations may not take requests and play them immediately, according to the terms of the licensing in place with the PRO’s.  All of this, by the way, is not in place for terrestrial AM and FM stations.  Collusion?  Possibly.  Creation of an environment that creates competitive advantages for some?  More than likely.

And I have yet to talk about the disadvantage of the artist in these scenarios.  In previous articles, I’ve discussed the economics of having your music on services such as Spotify.  For most emerging musicians, the financial results are abysmal.  More on that later.  The proliferation of ‘free’ music has lined the pockets of advertisers and content providers, but done nothing to compensate artists appropriately.  And the PRO’s sit back silent on the subject, while collecting their fees.  Where is the advocacy for the artists they claim to protect?

In short, the PRO’s need to come into line with the 21st century.  Just because technology allows for the free streaming of music does not make it right (use the movie industry as an example).  We have conditioned the American consumer to believe that access to music at no charge to them is an unalienable right.

The Music Streaming Services.  Here is where I really start losing my mind.  Services like Spotify and iTunes are creating another uncompetitive market, and doing so by throwing around the power of their scale.  Paying pennies on the dollar for downloaded music to the artist, they have created a pricing structure that is financially unfeasible for the artist, and unlikely to be duplicated by new players to the game.

Spotify and iTunes add nothing to the creative or entertainment process, as most radio does.  They are simply huge repositories of music, many times played for free by their customers.  Those they do charge typically pay $10 a month for unlimited music.  Do I need to remind anyone that $10 would not have covered the cost of a single album thirty years ago? And yet, because technology allows it, we have an environment where my cost per album can be a penny or two, depending on my listening habits.  I have access to an exhaustive library of music.  Artists are forced to list their music on these streamers because ‘everyone else does it.’  And for most, it is charity work.

Regardless of an artist’s wish to put their music out for free, iTunes still charges 99 cents for that download.  Let’s examine this for a minute.  The artist is willing to give away the music at no charge, but Apple still feels the need to exact a 100% profit from the consumer, at the same price as it would be if they were paying the artist.  However, ‘paying’ might be a little too strong, as the artist is lucky to get more than a couple of cents from that iTunes download.  The scale of economics is clearly not slanted to compensate the artist for their work, and totally structured for the benefit of the corporate machine.

Fortunately for those of us looking for great new music, the true musicians do not make money the primary concern, and continue to provide us with a vast wealth of incredible music.  However, their willingness to look the other way does not make it right.  The machine needs to change, or more accurately, the current machine needs to be dismantled and replaced with one that benefits both the artist and consumer.  One that allows for the ‘discovery’ of new music, and does so in an environment where the talented artist is able to flourish.  Unfortunately, that day may never come, unless we force the change.  More on that next time.