Friday, October 10, 2008

Musical Notes by Bob Duskis: The Value of Free Part 1



While the rest of America watches in slack jawed horror as Wall Street tumbles into previously unheard of depths, we in the record business have been going through our own financial apocalypse for some time now. Without going into a long and drawn out history lesson, somewhere along the line, a basic shift has occurred in the way people value (or don't) music. While music plays a larger part than ever in our day to day existence, the fact that it has become so easy to get for free has somehow translated for many consumers to the fact that it SHOULD be free.

I will never forget one Christmas a few years ago, teaching my niece how to download from the i-tunes store (she had just received her first i-pod for the holidays) and her 16 year old cousin commenting that "paying for music was for suckers and chumps". This was a kid who was heavily into the alternative punk scene coming out of his native Northwest area. When I asked him how the bands he loved were supposed to survive without people paying for their music, he told me that he would happily pay to see them live and buy a Tee-shirt but why would he buy music when it was so easy to get it free. Besides, everyone knows that record companies rip off artists anyway so why shouldn't people rip THEM off. I have spoken on this issue at many colleges and high schools and I can tell you that this is an attitude that is widely held by younger music fans who have absolutely no idea of any distinction between the historically heinous practices of many major labels and the vastly different world of independent music.

Those of us who work on the independent side of the music business know that with very few exceptions, no one is getting rich in this game. Most of us have made conscious decisions somewhere in our careers to forego higher paying, major label jobs in order to focus on music that we love, rather than music that could sell in huge quantities. I have a large network of friends and acquaintances at other indie labels and I am here to tell you that for the most part, these are fans just like yourselves who are still passionate about music and have made many sacrifices to work in this world. I'm not trying to paint us all as glorious martyrs. We have gladly chosen a path that was never going to make us wealthy BUT we never signed on as charity workers. The idea that my contemporaries and I shouldn't be able to make a living in the music business because technology has made it easy to download and burn music for free is simply ridiculous. I believe it was Doug Morris (chairman of the Universal Music Group) who when asked how the RIAA could condone suing their own consumers for illegal downloading, asked the rhetorical question, "What do you think the makers of Coca Cola would do if someone invented a device that you could easily install at home, enabling you to get free Coke from your own sink?"- you can damn well expect that they would do whatever they had to in order to stop it and no one would blame them for a second. Think for a moment about whatever business you are in. If some new technology allowed your customers to steal from you with impunity how would you feel?

Most importantly here, what about the artists? I'm not condoning downloading free music from major label artists by any means but people need to understand that performers like Eminem, U2, Lil' Wayne etc. will always be able to make a fabulous living off of their touring and merchandise. I read somewhere that Britney Spears made more money from the Tee- shirt sales on her last big tour (this was before her spectacular "fall from grace") than she did from her record sales. There are some indie artists who have carved out lucrative touring careers but when you look at our niche of music, it is very rare. In fact, most of our artists still have a tour "short fall" that we make up for as the label with pre-approved tour support dollars. The point I'm making here is that for the level of artist that we (and most indie labels) work with, every dollar counts towards them being able to make a living at this game. Should one of my artists have to take a day job because people feel that 99 cents is too much to pay for a song?

Now I know that most of you understand this in principle and I would like to think that most of our consumers are actually BUYING our music but frankly the numbers over the last few years tell a disturbing story. Traditional retail stores like Tower Records are going the way of the dinosaurs and while digital sales are on the rise, they are not growing at a rate that makes up for the decline in physical sales. Time and time again I meet people who think nothing of paying $7 for a beer or $4 for a bottle of water at a club but balk loudly at plunking down $14 for a CD or $9.99 for an album download. It simply blows my mind how the general public's perception of the actual value of music has changed over the years. It is traditional wisdom that you can't put a price tag on the emotional impact that a great song or a great CD can bring to your life but maybe we need to start doing just that.

This is obviously a huge issue here and I will be tackling different facets of it in further installments on this topic- but let me leave you with this thought. There IS an economic system that helps ensure that independent artists can survive and make their art. If you love music that exists outside of the parameters of mainstream rock, pop and hip hop and if you want to continue to have a choice in what you can listen to, then you NEED to support the artists and the labels that make that music. If real music fans like yourselves who actually take the time and have the interest in reading a blog like this don't actually PAY for eclectic music, then this music is going to start to go away. Labels and retailers are already dropping like flies and now with the economy in free-fall the challenges are going to get bigger than ever.

I welcome your thoughts and comments on this issue.

6 comments:

Valizan said...

But maybe that is exactly what consumers of today need... a kick in the pants by way of NOT having music easily available to them.

I stopped listening to the sludge on the radio a long time ago because it is just awful. But if people lose access to a great chunk of music, they'll soon come to appreciate what it was they had.

Awful dream? Yeh.

Perhaps there needs to be a middle ground for uninformed consumers who are behaving selfishly and the big "greedy" record companies. Maybe the independents are that ground.

Global Noize said...

It IS true that people often don't appreciate what they have until it is gone. However, how many artists and labels are going to have to suffer in order for this to happen is the question.

allrelative said...

Bob,

I just wrote an article about this for Keith Holzman's newsletter. I'd love you to see it. It is now up on Keith's site at the following link:
http://www.holzmansolutions.com/articles/90-Oct08.html


Please contact me if you want to follow-up.

Thanks!!

Global Noize said...

It's a great piece- thanks for providing me with the link.

How do you feel about us reprinting it (or at least excerpts from it) on our blog?

Bob

oz said...

"Because we're pioneers, advertisers want to be with us."

As a listener/consumer/dj who still buys vinyl/mp3s/cds , and also trades hardrives, downloads from blogs and other sites; I must way in that I think it is a lot to ask people to spend $9.99 for a cd when they can get it for free. Technology has changed the game and everyone does need to find a way to make a living in the game but it will have to come through multiple revenue streams and inventive thinking, not from plastic discs and paying for downloads. No one knows what the answer is, and I am just like everyone else trying to figure out what the equation will be. There was an article in Wired last summer called Free! Why $0.00 Is the Future of Business
link to it here
there is also a link to the story of How can a cd be free? reprinted below

Last July, Prince debuted his new album, Planet Earth, by stuffing a copy — retail value $19 — into 2.8 million issues of the Sunday edition of London's Daily Mail. (The paper often includes a CD, but this was the first time it featured all-new material from a star.) How can a platinum artist give away a new release? And how can a newspaper distribute it free of charge?

A) Prince spurred ticket sales. Strictly speaking, the artist lost money on the deal. He charged the Daily Mail a licensing fee of 36 cents a disc rather than his customary $2. But he more than made up the difference in ticket sales. The Purple One sold out 21 shows at London's 02 Arena in August, bringing him record concert revenue for the region. B) The Daily Mail boosted its brand. The freebie bumped up the newspaper's circulation 20 percent that day. That brought in extra revenue, but not enough to cover expenses. Still, Daily Mail execs consider the giveaway a success. Managing editor Stephen Miron says the gimmick worked editorially and financially: "Because we're pioneers, advertisers want to be with us."

Photo Blogger said...

I absolutely understand that independent artists are getting the shaft in the current music environment, and I agree that it isn't fair. I have been actively purchasing music via digital download since 2001 and was one of the first subscribers to eMusic.com, and today I have a large monthly account with them and download as many as 25 albums a month. I like their model, and they sell independent music exclusively that has always been DRM free.

It's hard to get riled up about this though; as someone who worked music retail during the death of vinyl and the rise of the personal computer, I know that the writing has been on the wall for over a decade regarding digital downloads, and both major and indie labels ignored this rising medium at their peril. They are now reaping the whirlwind. I'm not trying to say, too bad for you indies--not at all--but there were countless opportunities for the music industry to embrace cheaper, friendlier distribution models for years and they are still behind the curve in this arena.

I personaly don't think it's about the free, it's about the convenience, but the dialogue became about free, at least in the US, when major labels got greedy with CD prices and blamed it on security packaging. The prices were high and suddenly there was a much higher entry barrier for getting into new music. It used to be that if you couldn't afford the album for 15 bucks, you could at least afford the tape, maybe on sale for 6 or 7 dollars. Now tapes were disappearing and new CDs were averaging 16 or 17 bucks, not 15. Sale prices might take them down to $12 if you were lucky, but that was for major label music. Indie labels, bought in lower quantities, were rarely on sale. So now you are talking about one cd for the price of what used to be two or maybe even three tapes. But on the pc your mom bought, you might be able to download the cd for free, and no one was paying attention . . . and the labels ignored this, ignored pirating in other countries, until the problem was epidemic. Now the genie is way, way, way out of the bottle.

My feeling now is, indies need to focus on new marketing and distribution models. Get right to the consumer. There are no record stores, so physical CDs should be add-on, luxury products. Indies should focus on downloads, with free intro and / or sale tracks, distribution on sites like emusic and other great indie sites (there are a ton of great European sites) and sell straight to the consumer. Indies have more opportunities to get out more products directly to the consumer, faster than the majors, and offer collector packages in small quantities.