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Study Suggests Music Industry Embrace Piracy 293

Posted by ScuttleMonkey
from the give-the-people-what-they-want dept.
unassimilatible writes to tell us that according to the Financial Times, the music industry should embrace illegal file-sharing websites. A recent study of the recent Radiohead album release found that huge numbers of illegal downloads actually helped the band's popularity and, by extension, concert ticket sales. "Radiohead's release of In Rainbows on a pay-what-you-want basis last October generated enormous traffic to the band's own website and intense speculation about how much fans had paid. He urged record companies to study the outcome and accept that file-sharing sites were here to stay. 'It's time to stop swimming against the tide of what people want,' he said." Update 19:46 GMT by SM: Several readers (including the original author) have written in to mention that it isn't stressed enough that this study was engaged by the music industry itself, making the findings that much more interesting. Take that as you will.
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Study Suggests Music Industry Embrace Piracy

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  • What "study"? (Score:5, Insightful)

    by XorNand (517466) * on Monday August 04, 2008 @03:06PM (#24470893)
    Not saying that there might be some merit here, but this was hardly a scientific study. Someone simply looked at the number of downloads of a single album, by a single band and said "downloads == good." Sure, you can make statistics say whatever you want them to say, but this isn't even trying.

    Secondly, it's no longer "pirating" if it's condoned by the copyright holder, eh? So, we're now expecting labels to just let everyone freely copy music? The problem here is that labels own the copyright and make their money from album sales. Merchandising and concert revenue, on the other hand, typically go into the bands' pockets. So of course there are bands out there that would love to use albums as a loss leader for their concerts. This kinda screws the labels though since the only reason so many people attend the concerts or buy the t-shirts is due to a heavy promotional investment by the labels.

    I can't actually believe that I'm spending a few minutes of my life to defend major record labels, but we do need a bit of intellectual honesty and middle ground in this discussion.
    • Re:What "study"? (Score:5, Insightful)

      by I2egulus (1322013) on Monday August 04, 2008 @03:13PM (#24470999)
      Before I start, I agree with parent post. Record labels that invest time in promoting an album have a right to some of the money too, though not nearly as much as they take currently.

      The question though, is whether said labels are necessary to the industry anymore. Can a band sustain itself without a record label, while still releasing music in an album format digitally? I'm not one to pretend to be knowledgeable on the issue but I figure I can at least pose the question.

      • Re:What "study"? (Score:5, Insightful)

        by TheLostSamurai (1051736) on Monday August 04, 2008 @03:26PM (#24471241)

        The question though, is whether said labels are necessary to the industry anymore. Can a band sustain itself without a record label, while still releasing music in an album format digitally?

        Let me answer your question with another question; Which band? If you're talking about Radiohead, then yes. However, if you're talking about your buddy Joe's local garage band, no. In the end it all comes down to the individual bands ability to market themselves and actually get their music heard.

        • Re:What "study"? (Score:5, Interesting)

          by vhogemann (797994) <victor&hogemann,com> on Monday August 04, 2008 @03:59PM (#24471799) Homepage

          I have to disagree...

          Here at Brazil there are dozens of local bands that I never heard about, but are able to market themselves and earn money. These bands basically perform at regional shows, sell their albuns themselves and basically are ignored by the mainstream music industry. The music is basically "pirated" by the artists themselves, because it's sold on a such informal way directly by the band or by street vendors that copy and resell the albums as much as they want to.

          Eventually some of this bands get attention from the general public and become know nationwide... And some even internationally, see the Calypso band for an example... not my kind of music, but they managed to make some shows on Europe and USA! And this without the help of any major label.

          See, if a kitschy band from the brazilian countryside (hey, by countrysite I mean near the f*sk amazon forrest!) can reach international success all by themselves... Well, I think Record Labels are no longer necessary!

          • Re:What "study"? (Score:5, Insightful)

            by badasscat (563442) <basscadet75&yahoo,com> on Monday August 04, 2008 @04:52PM (#24472553)

            Here at Brazil there are dozens of local bands that I never heard about, but are able to market themselves and earn money. These bands basically perform at regional shows, sell their albuns themselves and basically are ignored by the mainstream music industry. The music is basically "pirated" by the artists themselves, because it's sold on a such informal way directly by the band or by street vendors that copy and resell the albums as much as they want to.

            Yes, and this is the way it's been done in the United States and England and Japan and everywhere else for decades too. Nothing new there...

            Eventually some of this bands get attention from the general public and become know nationwide...

            And here you've left out about a million steps, most of which involve a record label or at least some form of professional PR. (I'll get to your specific example in a minute.)

            How do you suppose a band that's playing around locally and selling tapes or whatever to local people becomes "eventually" known nationwide? Every local area has dozens or hundreds of bands all trying to do the same thing, so why would somebody pay attention to a local band from 500 miles away?

            The answer is they get mentioned in newspapers, they get played on radio stations, they make it into video games, etc. etc. Hopefully at some point before that they get a more professional recording made, which costs a lot of money that most local bands don't have.

            None of this happens without a record label.

            As for this:

            And some even internationally, see the Calypso band for an example...

            I've never heard of them. A quick Google search turns up nothing either. Searching for Calypso brings up results for calypso music, some technology company calling itself Calypso, a Calypso catamaran... but no band. Searching for "Calypso band" is similarly barren - lots of results for calypso bands, but no band specific named Calypso in the first few dozen results. So they can't really be all that popular internationally - not many people are mentioning them online or linking to pages that do.

            Now, if they'd had a record label, maybe a different story. Record labels have SEO specialists that would ensure they'd be high up in search results. They'd have a nice SEO-friendly official web site with a blog or two. They'd be setting up tours. They'd get them on appropriate radio stations and TV shows. An associated PR agency would be sending out press releases and samplers to various publications.

            Like the parent, I can't believe I'm here defending record labels, but the fact is they do serve a purpose. That doesn't mean I support everything they do or that I think their current form is right for the way music is distributed today - their business model is still very 1950's, and they need to get smaller and streamline. They also need to acknowledge that the internet is not going away. A lot of bands might not need a "full service" record label, but then they shouldn't expect as much help either (be it financial or practical).

            • Re: (Score:3, Interesting)

              by Knara (9377)

              Like the parent, I can't believe I'm here defending record labels, but the fact is they do serve a purpose. That doesn't mean I support everything they do or that I think their current form is right for the way music is distributed today - their business model is still very 1950's, and they need to get smaller and streamline. They also need to acknowledge that the internet is not going away. A lot of bands might not need a "full service" record label, but then they shouldn't expect as much help either (be it financial or practical).

              I'm in the same boat. The big labels DO have a purpose. When you're working with a major label, it's like having a big corporation standing behind your software project. Sure, you could probably make some dough by putting up a nice website, making things available on sourceforge, selling via Amazon or something. But if ConHugeSoft Inc. decides that they're interested in distributing your software using their resources, you're gonna make a LOT more money (provided you watch your ass).

              Now that I think ab

            • Re:What "study"? (Score:5, Informative)

              by mattsucks (541950) on Monday August 04, 2008 @05:20PM (#24472963) Homepage

              And here you've left out about a million steps, most of which involve a record label or at least some form of professional PR. (I'll get to your specific example in a minute.)

              How do you suppose a band that's playing around locally and selling tapes or whatever to local people becomes "eventually" known nationwide? Every local area has dozens or hundreds of bands all trying to do the same thing, so why would somebody pay attention to a local band from 500 miles away?

              The answer is they get mentioned in newspapers, they get played on radio stations, they make it into video games, etc. etc. Hopefully at some point before that they get a more professional recording made, which costs a lot of money that most local bands don't have.

              None of this happens without a record label.

              I have been in one band from my local area that got into the papers and magazines, onto commercial radio, into video game soundtracks, recorded at the same high-end studios that the record labels use around these parts (north TX, USA), done radio interviews on the top local stations and college stations around the state, sold CDs and downloads locally, regionally, nationally, and on the other side of the world (NZ, to be precise). At the time, the bands showed up adequately ranked at in various search engines, as do my current efforts, with minimal effort for SEO on our part. My current groups all have achieved varying degrees of the above as well. And I know of at least a dozen more bands from this area that have done the same ...

              ... and all that happened without any record label of any kind.

              Yes we all busted our asses to get those things done, went into debt, dug ourselves out, and by-and-large nobody I know is rich and famous yet. But we've all played stuff we wanted to play, never had to give away any of our rights to a soulless corporation (oxymoron?), and had a difficult, frustrating, and at the same time fabulous time doing so.

              And the best part is, I can keep doing this til I'm 90 .. without a record label.

              A record label is only one way to make some of these things happen. Sometimes a record label can provide you a shortening of the path you would otherwise have to take. But its not the ONLY way.

              • Re: (Score:3, Informative)

                by kaiidth (104315)

                give away any of our rights to a soulless corporation (oxymoron?), and had a difficult, frustrating, and at the same time fabulous time doing so.

                Small point of definition - an oxymoron is a combination of opposites, like 'Microsoft Works' and 'Military Intelligence'. A 'soulless corporation', on the other hand, is a combination of pretty similar terms. An oxymoron in which 'soulless' was better used might be 'soulless immortal', or if you are given to foul puns, 'soulless flip-flops'. What you have in 'soulless corporation' is in fact a tautology, an unnecessary repetition of meaning.

                Sorry. I'm not usually an, um, definition nazi. And I'm on my thir

            • Re: (Score:3, Informative)

              by vhogemann (797994)

              Ok, quick short answers (because it's late and I have to go home)

              1) They got famous country wide because they made shows on festivals during hollydays, and there's a lot of internal tourism here at Brazil. So people from São Paulo and Rio got to know them... and eventually they were invited to perform on a national TV show.

              2) No major records or professional PR involved. Their albums are sold directly at their shows, or massively pirated on the streets. A album costs about U$2,00... and that's the reas

              • Re:What "study"? (Score:4, Insightful)

                by Dun Malg (230075) on Monday August 04, 2008 @08:35PM (#24474963) Homepage

                I guess Google searches are more or less influenced by the country you're at. Google.com.br returns lots of results for "Banda Calypso"... Banda is portuguese for band.

                Heh. Looks like the GP poster isn't as bright as he fancied himself:

                "I've never heard of them. A quick Google search turns up nothing either. Searching for Calypso brings up results for calypso music.... but no band. Searching for "Calypso band" is similarly barren

                Always there are subtle pitfalls when you try to look sharp... like remembering that other countries speak languages other than English, and that when searching for a Brazilian band, perhaps one ought to use the Portuguese word for "band"... and maybe even searching google.com.br...... or perhaps even coming to the conclusion that "calypso", being a a word already heavily associated worldwide with an entire genre of music, might not return a hit on the first few dozen pages for a small, locally famous band in Brazil...

            • Re: (Score:3, Informative)

              by dave420 (699308)
              You just have to play for the public, and you'll get your audience. The idea of being a musician isn't to sell albums, but to sell tickets - to play live for your audience. The albums are supposed to be a way to entice people to the live shows. Musicians make most of their money from live performances. Some record labels are better than others, don't get me wrong. Many have embraced DRM-free digital downloads, but they do realise that while they might do a good job, all record labels know they aren't n
        • Re:What "study"? (Score:5, Interesting)

          by hairyfeet (841228) <bassbeast1968.gmail@com> on Monday August 04, 2008 @03:59PM (#24471815) Journal

          Actually they probably could,they would just have to go back to the "old" way of doing things. My mom talks about the way bands worked when she was a kid,and how you would get one "semi-famous" act,along with up to a dozen smaller acts. The smaller acts would all have self pressed 45 records for sale to the audience after the show,and the concerts were such a good deal price wise that it left the kids with plenty of money to snatch up those 45s the bands were selling.

          I think going back to a more "carnival" atmosphere,with the bands having little booths to sell cds,t-shirts,keyrings,etc would work,and they would end up with a lot more money than selling themselves to a record company. I know that when i went on a southern tour with the college band I was playing with we were getting between $400-800 a night easy,just from selling our wares to the audience. And there were plenty of other ways to promote yourself. We would put up "Win one of the bands guitars!" flyers around before a show and take a cheap Kramer that we bought online and play it for the last 3 or 4 songs. After which we would sign it and have a raffle and everyone who bought any of our merchandise got a ticket for each item bought. Sales went up a good 40% and the fans loved it.

          So yes,I think it can work for the little guys too,they just can't sit on the butts and expect the money fairy to drop a sack on their lap. They have to be willing to hustle and put in the effort,but the rewards are well worth it. But as always this is my 02c,YMMV

        • Re:What "study"? (Score:4, Informative)

          by NickFortune (613926) on Monday August 04, 2008 @04:04PM (#24471899) Homepage Journal

          Can a band sustain itself without a record label, while still releasing music in an album format digitally?

          Which band? If you're talking about Radiohead, then yes. However, if you're talking about your buddy Joe's local garage band, no

          On the other hand, it's worth pointing out that Buddy Joe and his Local Garage Band probably can't make enough to sustain themselves with the help of a record label, either.

          The reason a lot of garage bands can't support themselves is that a lot of them aren't very good. This isn't to say they lack talent, or can't get good by working at it. On the other hand, if they get good enough to have got an advance from a label, there's a fair chance they'll be able to gather a following on the Internet too.

          Really though, that's not anything either of us will be able to say with any certainty for some years to come. This seems to be an emerging trend - how far it develops remains to be seen.

        • by ruin20 (1242396)
          The new label for joe's garage band is pitchfork or equivalent for the genre. For him, disk printing is a commodity service.

          The way the record industry built artists in the past is dying because they no longer control the media outlets. However the media outlets still control weather or not you're a huge it. Believe me, if the appropriate news source says you rock, you'll see sales.

          My opinion is that this is good for the consumer, because increasingly I'm finding more accuracy in the reporting and revie

      • Re:What "study"? (Score:5, Insightful)

        by zappepcs (820751) on Monday August 04, 2008 @03:29PM (#24471311) Journal

        Short answer? Yes. The recording industry as distribution giants are no longer needed. That is not to say that there is no place left for their business, just none left for them to run it the way that they have been. Bands still need help with getting concert venues and promotion. I'll wager that before the large RIAA members figure it out there will be others jumping inline to provide such as is needed by bands who distribute electronically.
        The old methods of finding out about new music are slowly failing. Commercial radio is floundering, magazines are not covering all the music available, so the market (roughly speaking) is wide open for competition to large record labels. I listen extensively to Internet radio. I live in a large metropolitan area and there is NOTHING on regular radio that I can suffer through for 6 songs an hour. I say this because if I have gotten to this point, you can bet I'm not alone and as a result the RIAA members are losing out until they start supporting the "New Way" of doing business. It is now completely legitimate and plausible to do without their services IMO.

        The real problem for RIAA members is that they don't seem to realize how long ago this boat left the pier while they were partying at the boathouse. Now they have to play catch-up to the likes of iTunes, Napster etc. They have given their business away by being afraid to innovate and change with the times and technology.

        Bands mostly sustain themselves on concert generated revenue, not record sales. The smaller the band, the more this is true. The internet sales model is giving some small bands more money than they could have thought possible without a record deal. Direct sales == money. Radiohead, NIN, and others are showing that it's not just a big money pit to throw away your profits in. It DOES work. Some reports say that revenues for a band from CD sales is negligible, so in these terms the Radiohead deal is a big deal. They got all the revenue from music sales. Despite mistakes or blunders, Radiohead and NIN are showing others how to do business in The New Way.

        As technology takes it further, the avalanche of music available to users will overwhelm them, and they will look for the New MTV to help them limit their choices and search for the next pop idol. That is where Internet websites will slowly begin taking share from RIAA members. The new nexus of distribution is being the person who knows what is available and can help you find music you like.

        So, in both short and long answer... yes!

        • Re: (Score:3, Interesting)

          by Red Flayer (890720)

          Short answer? Yes. The recording industry as distribution giants are no longer needed. That is not to say that there is no place left for their business, just none left for them to run it the way that they have been. Bands still need help with getting concert venues and promotion.

          This is it, exactly.

          Distribution has changed, but marketing and promotion needs are still there. While it is possible for an artist to succeed with marketing on their own, no small acts have access to the marketing channels that

          • by steelfood (895457)

            The problem is that they don't really do anything that the individual bands cannot do. Their effectiveness comes from size. Who would a major marketing agency or retail outlet pay more attention to, a band of 4 kids with a few albums and marginal CD sales (a small account), or a huge media company (a huge account)? The labels are effectively doing the job of a union. Unfortunately, you don't really need a label anymore for those things, you just need a union.

      • by Migraineman (632203) on Monday August 04, 2008 @03:34PM (#24471399)
        The music industry (and the movie industry) has a business model where they control the conduit between the "talent" and the "customer." They make their money by controlling that conduit ... we have a number of laws [wikipedia.org] that outline the dirty tricks [wikipedia.org] used by these folks to control the distribution conduit, right up to the control interface on your wallet. The Canadian blank-media tax basically siphons cash out of your wallet regardless of your music/entertainment purchases, and gives the lion's share of the funds to ... wait for it ... the distribution cartels. They have a plan for distributions to artists, but that's after they've taken their cut.

        Any proposal that lessens their ability to control the market will be opposed quite vigorously. They already know they're obsolete. What makes you think they're going to give up voluntarily?
    • Re:What "study"? (Score:5, Insightful)

      by RonnyJ (651856) on Monday August 04, 2008 @03:18PM (#24471079)

      It's not even a good example of an album to study. Radiohead had enormous success with it, but they were hugely helped by two things:

      1) They were already a very well-established band.
      2) They had a huge amount of publicity given to them because the method of distribution was 'revolutionary' (and they got that publicity largely because of 1) above).

    • Re:What "study"? (Score:4, Insightful)

      by aztektum (170569) on Monday August 04, 2008 @03:25PM (#24471227)

      Who needs labels anymore anyway? If someone is interested enough in truly making music, they should find a way to do it and make money off it.

      It isn't like labels are really promoting anything worthwhile anyway. They're more like a marketing machine. Miley Cyrus or Cute Cookie Cutter Female Singer #324,234,465 hardly qualify as "artists".

      What's needed is iTunes that let's anyone on and you screw all to the record companies by finding a way to record your music w/o them. Home recording is hella cheap compared to a couple decades ago and there are ways of gettin' real studio time. Until you're good enough to warrant it though, flip burgers and pinch pennies. No different than any college kid eating a case of ramen a week.

      • Re: (Score:3, Interesting)

        by mxs (42717)

        Who needs labels anymore anyway? If someone is interested enough in truly making music, they should find a way to do it and make money off it.

        Like picking a label that is not evil. Many artists do not enjoy the day-to-day work of finding distribution channels, doing promotion, calling magazines, radio stations, TV stations, etc. Labels CAN provide a valuable service. Nowhere near as valuable as they are making themselves out to be today (with some notable exceptions -- magnatune.com seems to be a decent label, for instance.)

        It isn't like labels are really promoting anything worthwhile anyway. They're more like a marketing machine. Miley Cyrus or Cute Cookie Cutter Female Singer #324,234,465 hardly qualify as "artists".

        And some truly good artists ALSO are represented by these so-called machines. Stands to argue that those artists produce som

        • Re: (Score:3, Insightful)

          by mattsucks (541950)

          Home recording is hella cheap compared to a couple decades ago

          And still, as a rule, hella crappy too. It's great for a jam session, it sucks if you want to do any well-engineered album.

          Don't underestimate the importance of good recording techniques in addition to having access to high-quality equipment.

          There is more to making a well-engineered album than having good equipment, as well. You can sit the world's best musician down in a million dollar studio, and if he/she doesn't know how to record, produce,

      • Ah, but then you run into legal issues.

        Said service would need a big legal department to make sure that Garage Band X wasn't infringing on Mega-Label's band Y, by borrowing lyrics or sampling music. Otherwise the service might be the target of lawsuits.

        Besides copyright issues, then you'd have to get some people to listen to said music and make sure that they are tagged appropriately. Mature content songs would need to be flagged as such, otherwise you get parents suing the company because "The Cute Fuzzy

    • The problem here is that labels own the copyright and make their money from album sales. Merchandising and concert revenue, on the other hand, typically go into the bands' pockets. So of course there are bands out there that would love to use albums as a loss leader for their concerts.

      Okay, but I think the most important implication of this post is that perhaps there is absolutely no need for there to be record labels anymore.

      Recording studios aren't even a hundredth as expensive as they used to be.
    • "This Machine Kills Fascists" was inscribed on Woody Guthrie's guitar.

      So, we're now expecting labels to just let everyone freely copy music? The problem here is that labels own the copyright and make their money from album sales

      It works for the indies. Note that Radiohead sold a lot of records. The industry should (if they weren't so dishonest and afraid of their competetion) embrace P2P and tout the CD's sueriority to lossily compressed files, and add "value added" value to the records like concert tickets

    • by CFTM (513264)

      Although, isn't there a sense in which in this era of file sharing and easy digital production that the label is slowly losing it's place in the chain? For the longest time, the labels were necessary in order for distribution but that's hardly the case anymore. I'm not saying that labels are going the way of the dodo, merely that it is now possible to have music distributed without going through the major labels. Does anyone know if Apple allows indie music producers to put their work up on iTunes? If

    • by ruin20 (1242396)
      I've been working with punk and indie music for quite some time now and I'm finding more and more that despite what is said as labels spending all this investment in "Promoting" artists, in a digital age with lots of easy information dissemination technologies available, promoting isn't as important.

      Pitchfork and the other music mags make they're money selling adds, and music is a content. I'm not going to even pretend they're fair, as I've seen reviews cut to shreds by some companies because the artist's

    • Maybe the solution is for record labels to freely distribute and promote the music, and in turn they get a share of the revenue from performances and commercial licensing?

  • by Jane Q. Public (1010737) on Monday August 04, 2008 @03:07PM (#24470911)
    ... though it might be good if they are constantly reminded that they are hurting themselves by going against consumers rather than with them.
  • BRB (Score:5, Funny)

    by pwnies (1034518) * <j@jjcm.org> on Monday August 04, 2008 @03:09PM (#24470943) Homepage Journal
    Gotta go support the music industry and make comcast hate my guts.
  • The "Industry"? Surely not. Maybe the musicians and the artists themselves, yes, but certainly not the "Industry", which thives on artificial rarity...

    • by sm62704 (957197)

      The "Industry"? Surely not. Maybe the musicians and the artists themselves, yes, but certainly not the "Industry", which thives on artificial rarity.

      Was that typo "thrives" or "thieves"? It works either way.

    • > ... which thives on artificial rarity...

      Please clarify: Did you mean "thrives" or "thieves."
      It's not entirely clear to me which you meant.

  • Why would I want to give away my product when...I make money from what is otherwise given away; but do not make money from what is gained?
    Record companies don't make money from the concert sales. They make money from the sale of CDs.
    This comes back to the same ignorant licensing argument on Slashdot between GPL, BSD, and non-opersource licenses.

    God forbid people make money to live on.

    • Re: (Score:3, Insightful)

      by Knara (9377)

      The article is making the (increasingly realistic) argument, albeit in a round-about fashion, that the recording industry needs to adapt or die. They've got just about zero chance of regaining the revenue streams they had pre-napster, and so its time to think outside the box. Not a newsflash by any stretch of the imagination.

      It's a choice between figuring out how to continue to make money (redesigning your business model) or making none (continually declining revenues for major labels until they can't af

    • by Etrias (1121031) on Monday August 04, 2008 @03:19PM (#24471093)
      Y'know though, the labels and record companies are really just middlemen and the artists make their money from concert tours and very little from actual CD sales.

      So why are we paying for the middleman?
      • Especially when it is so easy and cheap to produce and distribute one's own 'CD' these days. The artists don't need the labels, and should sell CDs at cost (say, $5?), or give them away as promotional material while making their money performing. That's how all the local bands I go to see do it.

      • by Nerdposeur (910128) on Monday August 04, 2008 @03:33PM (#24471375) Journal

        As an idealistic independent musician, I dream of staying indie, making free music for the fans and having the fans support me out of the goodness of their hearts. And maybe it can happen.

        On the other hand, I just recorded an album (not released yet), and I value the producer/engineer's work tremendously. I would also be ecstatic to have someone take over many of my business/marketing tasks for me. It would be worth it to me to pay those people - not 90% of my income, but definitely some.

        Assuming fans will continue to be willing to support the music they love, I can see the industry moving from "labels employ artists" to "artists employ a business staff." Those people would cease to be middlemen, but they wouldn't cease to be needed.

        • by CRCulver (715279)
          This hasn't really worked too well in the book publishing world. You can write a book and employ a staff, but no mainstream bookstores are going to touch something self-published. Amazon will take it, but it's hardly going to sell unless it's got promotion, which is prohibitively expensive. At least in Europe state arts subsidies support the creation of music even when artists may not have funding themselves in spite of their best effort. I wonder what model will ultimately prevail in the US.
        • by Knara (9377)

          Yeah, the main problem isn't with using a producer (a good producer can be the difference between an assy sounding album and a brilliant sounding one), but rather that the "top" producers are just ridiculously expensive. Same with some of the management.

          In order to be a supergroup, though, there has to be a huge infrastructure supporting you. That's pretty much where the major labels come in. What I think will eventually pan out is that there will be many more "everyday" musicians pulling in decent inco

      • by CRCulver (715279)
        Because the middleman offers promotion. Signal-to-noise ratio is very high on open fora.
      • by mochan_s (536939)

        The record companies first market the band, give them money to make their CD with top producers and expensive studios and pay for the music videos. Also, in many cases, payola to have their singles on the radio and articles on magazines.

        This is nationwide stuff and no band do it by themselves.

        Ticket sales come after being famous and everyone knowing who they are. Most people cannot name a few good local bands whereas they can name Radiohead, Weezer etc.

        • by Etrias (1121031)
          I would like to point out this article [wired.com] from David Byrne which I found highly instructive on different record contract structures. It's an older article, but still very good from someone who has been there, on both sides of the equation.

          While some bands may chose the megastar option (at risk of loss of other things), a great many other musicians would likely do well on a number of different levels.
    • by sm62704 (957197)

      Because no artist or publisher ever starved from having his works pirated, but many have starved because of obscurity.

      If I don't hear your record I'm not very damned likely to buy it, now am I? But if Joe says "hey that new band Grosweil* really ROCKS", well, I'm not very likely to go out and buy it either.

      But I might be likely to download it and give it a listen, and well, if it does indeed rock I'll be buying the CD.

      *AFAIK there is no such band

    • Re: (Score:3, Interesting)

      by dave420 (699308)
      Because the album is NOT the product. The live performances are the product. Albums are advertising. Record labels are not needed any more - they don't need to produce any physical media any more. That can be done in any fab place that will stamp CDs. Record labels turned the album into a product simply so they can make money off of the artists. Their business model is not sustainable, as it is going to bring about their own end.
  • RIAA should learn... (Score:4, Interesting)

    by mseidl (828824) on Monday August 04, 2008 @03:12PM (#24470981) Homepage
    Not very many people know this, but the RIAA almost went bankrupt in the 30s with Radio, because they didn't have any licensing fees or "royalties" associated with it. And people stopped buying records because they could listen to it on the radio.

    The RIAA should embrace technology. Because that is where the world is headed. Any idiot can see this. So instead of fighting, go with the flow, because you cannot change people. No matter how much you sue, how much fucking money you waste trying to convince people they are stealing if they think of the song in their head.

    I hereby kick the RIAA in the nuts.
  • As numerous others have pointed out in past threads, concert ticket sales benefit the concert promoters and (to a lesser extent) the bands, but really don't do much to bolster RIAA-member company profits, which are much more closely tied to labeled CD and MP3 sales -- precisely what illegal downloads are purported to compete with.

    Conclusion -- Save your time, no need to bother with such nitwittage "analysis".

    Cheers,

  • The supposed "benefits" are for increased concert ticket sales. I have to presume that there are spill-over effects for merchandise like t-shirts and posters. Historically, this revenue has gone to the BAND - not the music companies. As I understand it, the music companies have typically kept revenues from album sales as their primary compensation. An argument can be made then that piracy is bad for music companies whose business model is based on the ability to sell recordings and control distribution
  • Why? Because most of the performance proceedings indeed go to the band. Some (large) bands are quoted saying that they make living only on concerts since their multi-milion-platinum-albums are bringing in nothing after record labels cut.

    • Re: (Score:3, Insightful)

      by east coast (590680)
      I know the knee-jerk reaction thing is a bit heavy around here but to proclaim that the RIAA hates concert sales because artists make money from them is a bit far fetched.

      And as for bands who pump out multi-platinum albums who don't make a dime? I'd really like to see the books in that case. If it's true than there is so swamp land I want to offer these people. If you really have a serious fan base and you're not smart enough to go in and say "I sell records, I want a cut or you won't get any more recordin
      • Re: (Score:3, Interesting)

        by cdrguru (88047)

        Don't forget the "Hollywood accounting" principals that say if you don't show any profit, you don't get taxed. That check for $500,000 the band got was for "unreimbursed expenses" and such. No, there isn't any profit here, none at all. Check Mr. IRS Man, and you will see all our books are clean. No profit.

        Are there bands that make lots for their manager, agent and record company without ever getting a dime themselves? Sure, they spent their entire advance (and then some) and finished with less than ste

  • by conner_bw (120497) on Monday August 04, 2008 @03:21PM (#24471127) Homepage Journal

    Is it a coincidence thatI just released an album I made in 2005 a few weeks ago, for free? [trotch.com].

    There's a fine line between being a huge band like Radiohead who receive tons of press in the mainstream media, and a person you never heard of doing weird music you probably don't want piled up in the closet money down the toilet.

    The music industry is changing that I can agree with. It's very difficult to make money doing music without a live show.

    For electronic music hobbyists like myself, a live show is kind of stupid. When I DJ my own tracks it's not a live performance, it's a cheap excuse for showing up and playing music I made on the computer on a computer. I got so fed up with it that the last show I played was a projection of myself DJ'ing, projected onto myself standing there, drinking.

    If open source programmers had to tour to make money, programming live on stage while people danced around cheering, it would collapse. Being an electronic musician, in a lot of cases, is just that. It's programming music in a sequencer with the intention to release as a file. The whole touring live show is superfluous and exhausting, and it's not related to the process of music composition.

    I'm not against how the industry is changing, but Radiohead as the benchmark for the future? No, I don't think so.

    • I may be unusual, but I often pay or offer to pay money to amateur musicians (like yourself?) that create music that I like. I suspect that there are a lot of other people that would do this if the transaction could be streamlined. This would require several things:

      • Some way for me to efficiently find music that I like.
      • Some way for me to estimate reasonable compensation for that music. (Reasonable compensation for Madonna would be $0.01, for example, because she has millions of fans and she doesn't need a
  • by sm62704 (957197) on Monday August 04, 2008 @03:26PM (#24471245) Journal

    It helps their artists (and them as well), but it also helps artists who are not uinder contract with its members.

    The RIAA has radio and empty-v to advertise its wares, as well as internet radio and P2P. Their competetion (the independants) only has internet radio and P2P. Killing internet radio and P2P is a blow against the indies, and since the RIAA has radio and empty-v, they can do without the internet. Their competetion can't.

    What they are doing is blatantly illegal, but the government is their pawn. We, the People, are defenseless.

  • While one could contend that "music industry", in this case, means "musicians", the traditional use of the phrase is in reference to the big labels behind the musicians. And they will never embrace piracy even if it does mean their artists become more popular and sell out stadiums on a regular basis - labels make little from concerts. There's a reason why many bands tour constantly - that's their major cash cow. Now, for _musicians_, piracy is a good thing - if people are listening to your music, they are m
  • While the reasons given for supporting piracy such as better concert ticket sales are true and Radiohead did benefit from that pay-what-you-want system, the Record Industry do not benefit from such a system and thus woul try their best to stop p2p and illegal sharing.

    The only way P2P could succeed, with artists getting their fair share through tours and sponsorship is if the Music Industry was bypassed.

  • by toriver (11308) on Monday August 04, 2008 @03:34PM (#24471401)

    The industry needs to realize that a person not buying their products is not their customer, whether it is a subsistence farmer on the African countryside or a frequent visitor to the Piratebay and that ilk. So they need to start focusing on the real customers to actually make money.

    The difference is that the visitor to Piratebay is MORE likely to actually turn into a customer. So why chase him away through litigation? The fantasy that they are losing money (i.e. has money taken away) is a fallacy, there is just potential income that is less than if they had bought the album. So you want them to do just that.

    Turning into a fricking monster is not the solution.

  • Yet another highly misleading summary.

    "found that huge numbers of illegal downloads actually helped the band's popularity and, by extension, concert ticket sales."

    Not quite. What the study said was that, regardless of the fact that Radiohead allowed legal downloads for "little or nothing", they got far more illegal downloads than legal ones. Not one word about "concert ticket sales".

    It's not at all clear to me that the fact that illegal downloads exceed legal ones even when legal ones cost little or nothing is an example of good news. There's some widespread assumption in the /. community that getting lots of "popularity" fr

  • What percentage of concert ticket sales does the record company get? It's obvious that musicians should embrace file-sharing, but the people fighting against it are (for the most part) record companies, not musicians. For a record company, alternative distribution channels really do threaten their control of the industry. And to some of these dinosaurs, control is more important than economic realities...
  • No. The record companies need to embrace fair use and stop referring to people sharing their personal property as "piracy".

  • Benefit the bands more then the artists. That is where a lot of bands make their money.

    Not that its a bad thing of course, they do the work, they deserve the cash.

  • by illegalcortex (1007791) on Monday August 04, 2008 @04:13PM (#24472011)

    ...would be:

    Rights holders would create copies of their movies/music/etc. using a standard program that "imprints" it with a demo indicator. For video, this would mean a message appearing at the start, end and in the middle of the screen every 20 minutes or so saying this was an unlicensed copy and to license it, go to this website. For music, it would take the form of an audio announcement along the same lines at the beginning, middle, and end of the song.

    When you go to that website, you can download an app for your particular platform. The app would be fairly simple, so there's really no excuse for not supporting Windows, Mac, Linux, and maybe even BSD. This app is like iTunes Music Store in that it lets you whip out a credit card and pay money for the music/movie. It then downloads from the server the diff that would take those announcement bits out and replace them with the normal audio/video. It also tack on to the beginning and end of any video the purchaser's name, with a short (less than 5 second) screen saying that the following movie was the licensed property of (purchaser's name). For audio files, it would probably be best just to have that put in the tags. Hopefully some place it would be obvious on playback/browsing.

    And that's it. No more DRM. No phoning home, no device lock in for the stuff you already purchased. Just a simple screen to prevent casual copying (who wants to give other people stuff with their name and maybe city/state on it). The knowledgeable crowd will know how to fix that, but there's no point in trying to stop them, anyway. They'll always figure out a way around and you can save yourself millions of dollars in creating elaborate DRM schemes and lost sales because people don't like elaborate DRM schemes.

    You charge VERY low rates for these files. We're talking 10 cents - 50 cents a song and around $1-$2 a movie. You make up for the price in volume, especially on the movies because now you can really give the movie rental places a run for their money. You not only stop trying to squash bittorrent, you embrace it. You get your imprinted copies on every decent tracker and you help seed them. You make it as easy to download your imprinted copy as it is to get a pirate one.

    If you've got the money for development/bandwidth, you can also create your own iTunes-like store where they can directly download from you. But you keep putting it on the torrent sites, too, because this is all about making paying for content as close to as easy as not paying for it and only slightly more expensive. If you're a smaller player, you team up and do package deals. This would narrow down the number of sites that have activation apps that you'd have to download. I figure each of the big music labels would want to do their own (BMG, Universal, etc.) and then you'd get indie collectives.

    The payment method could also be abstracted so that you never give your financial information directly to the companies but only get sent through other payment systems like paypal, Amazon, etc. Heck, maybe even the activation apps could come from these "trusted" third parties. The content owners could keep them in line (keep them from trying to take a big piece of the pie) due to the competition between payment systems.

    The companies could keep a record of the media you own, so that you could get a new copy activated if your old one got deleted. This would be low traffic on their site if they want because you can get the imprinted media from a torrent.

    Note: If doing the diff thing is too difficult (because of the way various codecs work), you can also just create a file where you take out 10% of the information required to play it, basically in a worm-like fashion throughout the file. Enough to swiss cheese it. And you include a standard bit at the beginning of the file that tells you how to "activate" it. Basically like the above but without the free preview.

    So, any thoughts? Crazy enough to work? Content sellers just keep trying to build a

  • Not so simple... (Score:3, Interesting)

    by GiMP (10923) on Monday August 04, 2008 @04:13PM (#24472027)

    The problems with the Radiohead album have been multifold. First, there was a lot of publicity regarding "free" distribution. At release, the Radiohead website was generally considered cumbersome and difficult to use, and was suffering from outages.

    The problems downloading the album from the Radiohead site drove many to download the files from peer to peer networks, with the media-driven misconception that this album was "free". Unfortunately, the extent to which the album was "free" was greatly over-exaggerated by the media, as it was not free for redistribution. This is a fact that likely eluded the average consumer not intimately familiar with copyright law.

    Above all, a user will take the path of least resistance, legal or not. For some users, they find resistance in prices they cannot afford, but that is not the only reason for piracy. Other reasons include empty store shelves, DRM (digital rights management), and uncooperative websites (as with 'In Rainbows'). All of these barriers to legal ownership result in piracy.

    Almost unfortunately, record companies have already realized this. Yet, they have decided to implement these ideas backwards. They are attempting to reduce the relative barriers to legal ownership by increasing the barriers to illegal ownership. This has been done via the legal system, with their infamous lawsuits.

    I agree with the general idea of that record companies must adapt and embrace free downloads through peer-to-peer networks, as NiN has done with their release of Ghosts. NiN has released their Ghosts album free for download and redistribution under Creative Commons.

  • by sneakyimp (1161443) on Monday August 04, 2008 @05:39PM (#24473237)
    Generally speaking, record labels never get a cent of concert revenues and bands rarely make money from record sales.

    The concert revenues go almost entirely to the band and their team (manager, lawyer, roadies, etc.). They also typically keep money made from non-musical merchandise like t-shirts, hats, posters, stickers, etc. The band can profit greatly from wide exposure (like you might get from being popular on P2P).

    The record label, on the other hand, usually doesn't get any merchandise revenue or revenue from touring at all. They have to make all of their money from sales of recordings. What happens in practice is that the label will give the band an "advance" so the band can make a recording. This advance might be $200,000 for an entry-level band and the band must use the money to create a suitable recording and buy food, clothing and shelter until it's time to make the next album--and the contract dictates a minimum time frame for this, typically 6 months or a year. The record label is usually entitled to 85% or more of revenues from the sale of record and under no obligation to release the album or spend any money promoting it. Before the band makes another dime off record sales, this entire amount (and any additional expenses the label might incur in getting the record to market) must be recouped from record sales. It almost never is because the label will bill things like air conditioning, coffee, dinners with friends, parties, etc. and because the record label has to pay to have the album pressed and distributed which can be quite expensive. My old record label was making something like $2 off every $10 record sold in a store because the store wanted a cut, the distributor (V2 records) took a huge cut and had to pay their sales team to place it in stores, etc. I think we were entitled to something like 25 cents per $10 record sold according to the terms of our contract. Try paying off $200,000 at that rate.

    Given that most bands don't ever see a dime from sales of music recordings, I would imagine that P2P seems like a great option for them. Conversely, record labels are going to hate it because it means giving their product away for free or for optional compensation. It is possible to build a business on optional compensation but I wouldn't want to do it.

    I see this helping bands in the long term because it means free distribution of records. I also see it hurting bands because record labels are whithering away - where is that $200,000 advance going to come from? You might see a lot of cheap-to-produce music (like house, rap, or punk) coming out of this situation, but you won't see records like Dark Side of the Moon (which took like 2 years to make) or Pet Sounds coming out of this situation. What you will see is an increasingly splintered industry with gazillions of bands and incredible variety. You'll also see the prefabricated, talentless stars like Miley Cyrus making boatloads in this scheme.

    The situation is not totally gloomy because you don't need anywhere near $200,000 to record a good record today. You can get protools or logic for cheap. You can also whore yourself out to some rich patron for the big bucks to do a truly awesome recording if you don't mind a lifetime of indentured servitude which is basically the old way of doing things.
  • by buddyglass (925859) on Monday August 04, 2008 @06:19PM (#24473729)

    If every artist followed the Radiohead model, or alternately released their songs for free at a reduced bitrate, then Radiohead wouldn't be unique. For one, they would no longer enjoy a price advantage over similar artists when competing for music consumers' dollars. But they would also suffer in a "public relations" sense. Radiohead's gesture generated a significant amount of goodwill toward the band. Among their fans, sure, but also among non-fans who just happen to want music to be free. Many of these non-fans or marginal fans may have downloaded the Radiohead album simply to reward Radiohead for taking a chance on the new distribution model.

    I'm curious whether the apparent success Radiohead enjoyed is not so much due to the distribution model itself, but the fact that they're one of the few big acts to use that model.

    It should also be noted that among the pantheon of artists out there, Radiohead's fan base is likely more 1) wired, 2) wealthy and 3) interested in the "politics" of music distribution than the fan base of, say, 50 cent or Carrie Underwood. If true, this would further boost the effectiveness of Radiohead's experiment beyond what an arbitrary artist could expect.

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