Consumption and the Creator’s (lack of) Power

Editor’s Note: This is part two of this week’s series on the music industry. Don’t miss the first post, written by Matt Miller, here. Come back on Friday to read a dialogue between Miller and the author of today’s post, Stephen Carradini.

There are many questions surrounding the post-Napster music industry, but one has been answered definitively: control of the payment structure has shifted from gatekeepers in the music industry to consumers. With an almost infinite amount of music available for free at the touch of a keyboard, the consumer now decides when and how much to pay. Musicians can’t definitively state what their work is worth anymore; they can only hope to prop up the horrible business model of making optional payments as easy as possible for the consumer.

The music-purchasing process before file-sharing was standard capitalism. Music businessmen set prices for CDs to make a profit. Consumers did not have enough money to buy all the music that they wanted or the power to change prices, so they had to choose which albums to buy. Napster and its kind flipped the script: Consumers acquired what they wanted for free, and music businessmen had little power to change the price.

Cut forward ten years, and the aftereffects have been ugly. Pirate Bay is wreaking havoc on a second industry. Major labels have crashed. Bands give their music away in hopes of attracting people to shows. But the weirdest development, in my opinion, is streaming subscription services like Spotify, which legalize and encourage a mentality where money is decoupled from the experience of music.

Sufjan Stevens at the Uptown Theater in Kansas...

Sufjan Stevens at the Uptown Theater in Kansas City on October 17, 2010 (Photo credit: Wikipedia)

When a consumer subscribes to Spotify, he or she pays to use the platform—not to buy music. Paying the artist for his or her work is secondary to keeping the platform alive. That’s the first problem. The second problem is that after discovering a great new band, the consumer does not actually buy anything. He or she simply streams the albums, for which bands get paid $0.0037 per stream, or maybe $0.006 per stream. If I listen to all five of the Sufjan Stevens albums I own on Spotify, Sufjan will make approximately $0.67 ($.006 per stream x 111 tracks). This comes into odds with the price Sufjan has set on his own music at Bandcamp.com: $8 for an album. To pay him via Spotify what he charges for a download of Age of Adz, I’d have to listen to the whole 11-track album a little more than 121 times (1334 streams).

This is where the consumer has to come to terms with a difficult question: Do other people’s opinions matter? Sufjan Stevens believes his albums are worth $8. If a consumer disregards this cost via streaming, piracy, or otherwise, the consumer is saying that Sufjan’s opinion of his own work does not matter, and that he is irrelevant to the pricing of his own work. The consumer indicates that his or her opinion on music is the only one worth considering, and no one (not even the artist) can say what music is worth. The consumer is saying to the artist, “I will pay you what you are worth, but I decide that. I am doing you a service by paying you—even if it’s not what you wanted to be paid.”

That, of course, sounds a little crazy. 

Consider a restaurant where people decided what they were going to pay after they ate their food.  If most people take four bites and leave without paying, the restaurant would almost certainly fail. If a consumer doesn’t like the prices in a restaurant, he doesn’t have to buy the spaghetti. But he still has to make a decision based on that price.

In the old economy, the consumers had a check on the power of the creator: if no one bought the product, the creator could mark down the price to try to entice consumers. But in this new economy, the creator has no check against consumer power: the artist can’t do anything to make people pay for music. Since consumers have driven the price down, artists who charge fair prices from the get-go can’t compete with those who put their music on Spotify or give it away for free. Technology may increase availability, but it can’t help us escape the fundamental fact that the consumer needs to pay somehow, or the artist won’t have money to keep making future product.

Those who do choose to pay artists they find on Spotify can do so by buying on iTunes ($6.30 of $10.00 goes to the artist), buying direct from the artist at Bandcamp, or paying fair price at a pay-what-you-want site ($.99 per track or $10 an album). Alternately, I enjoy contributing to crowdfunding sites like Kickstarter, which some bands use to fund their recordings.

Artists can pull their songs from Spotify, but that doesn’t change the root problem: consumers decide the value of music, to the exclusion of the artist’s opinion and sustainable business practices. If consumers keep pricing things to their convenience, I fear a future where the consumer prices artists out of a career in music entirely. The solution is easy: pay fair price for all the music you listen to, whether you streamed it originally or not.

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  • Nicholas Higgins

    “Pirate Bay is wreaking havoc on a second industry. Major labels have crashed. Bands give their music away in hopes of attracting people to shows.”

    You’re going to have to quantify that vague generalization if you expect it to hold any weight – can you prove that Pirate Bay and any other torrent sites are directly responsible for the “decline” in the music industry? Can anyone? There are really too many variables to consider any one thing responsible for the music industry, good or bad.

    I’m of the opinion that more and more artists are choosing to use a digital distribution model and so the “old ways” of physical media are becoming a thing of the past. I can’t remember the last time I bought a CD for actual music, but I can easily remember the last couple albums I downloaded through the websites of independent artists. (And then was mailed a signed CD that I lost.) Did those major labels even consider a distribution model that was totally different from what they were used to? (A distribution model that they didn’t totally control? I highly doubt it!) Maybe this isn’t a case of “torrenting killed them”. Maybe this is a great example of failure to adapt.

    “Musicians can’t definitively state what their work is worth anymore”

    Your use of the word “anymore” in the previous quotation troubles me. To be honest, I don’t feel musicians could ever state what their music was worth before. When signing on with a label, do you think they could tell the distributors “I want this CD to be sold for $5/10/30″ and it would happen?

    • http://www.chriskrycho.com Chris Krycho

      To say that there are too many variables to reduce the phenomenon to any single factor is fair. To suggest that mass piracy isn’t impacting the music-makers isn’t any way is just silly, though: even recognizing that it’s impossible to quantify the impact (given the certainty of some people pirating music that they wouldn’t have bought in any case), it’s still certain that there is an impact. More important than the pure numerical impact—and I’m quite sure, from what I’ve observed of my own peers, that there is some—is the cultural impact that Stephen highlights. The relationship between consumers and producers of music used to be two-way, in the way or normal economic exchanges. Now? Not so much. That cultural change is both interesting and potentially unhelpful.

      An interesting question, then, is what a distinctly Christian response to the new approach is. Spotify may tickle our fancy just as much as the next person, but how do we use it in a way that honors God and serves our fellow men and women? Or do we choose simply not to use it? For my own part, I’ve taken the step of saying that any album I listen to at any length on Spotify I will purchase. The laborer deserves his wages—even when that laborer is an artist. Your solution may be different. But I’d like to hear a proposed solution that is shaped by a Scriptural concern for the good of the other in the digital economy.

      Technology, after all, brings consequences that should be examined carefully and not accepted unthinkingly. That we can use Spotify does not mean we should, or that we should use it as others do. That the Internet allows the diminishment of the artist does not mean that Christians shouldn’t push in the other direction, thoughtfully and carefully (rejecting along the way the abuses of the major labels just as thoroughly). Thoughts?

  • http://independentclauses.com Stephen Carradini

    Hello, Nicholas! Thanks for your comments. If I had a few more words, I would have summarized “Ripped” by Greg Kot, a book-length piece about “How the Wired Generation Revolutionized Music.” You are right that many pieces contributed to the decline of major labels, and “failure to adapt” was one thing that did kill them. What did they fail to adapt to? Napster. By falling all over themselves in the Napster wars (Grandmas sued! Eight-year-olds sued!) they lost out big time by turning themselves into villains instead of jumping on the forefront of new delivery methods. As a result of this lack of innovation, people ran with the control they already had in their hands, and that’s where my essay comes in. (Pirate Bay is, in my opinion, the torchbearer for illegal downloading since Napster went down.)

    You are correct that there has always been a tension between labels and bands when it comes to money. “So You Wanna Be a Rock & Roll Star: How I Machine-Gunned a Roomful Of Record Executives and Other True Tales from a Drummer’s Life” by Jacob Slichter of Semisonic comes to mind as a perfect example of this. Labels, in many cases, saw bands as machines for making money. However, indie labels from the ’80s until now were able to say, “this CD is worth 7 bucks.” I was there, buying $3 and $6 and $9 CDs from local and touring indie bands at shows. Now a growing number of bands don’t even try to sell CDs at shows; some will try to sell digital download cards, but many just assume people will get their music somehow, and hope they will pay the band for it. So yes, I should have qualified that the label/band relationship was always tense, but now even the indie prospects for setting your own price are grim. (Sufjan Stevens owns his own label.)

    • Nicholas Higgins

      Thanks to the both of you for your responses – you’ve given me quite a lot to think about. Love the discourse here.

      • http://independentclauses.com Stephen Carradini

        I’m a big fan of interaction, so thanks again!

  • Pingback: The shifting relationship between consumers and creators | Stephen Carradini()

  • http://www.remnantculture.com Joseph Sunde

    “Artists can pull their songs from Spotify, but that doesn’t change the root problem: consumers decide the value of music, to the exclusion of the artist’s opinion and sustainable business practices.”

    I’m not sure I follow. If artists can “pull their songs from Spotify,” why is this to “the exclusion of the artist’s opinion”? You’re also making an over-generalized comparison between “owning” an album (for $8 bucks) vs. “streaming” an album (for less). This is basic price/consumer targeting and market specialization. It happens in varying ways across every coffee shop and record store across the nation.

    I’m also not sure what the standard looks like by which any artist should be able to gain “power” over their consumers. What is an acceptable level of “fair” to you, outside of what the artists and consumers are already agreeing to? If the artist wants any more “power” in the exchange, he/she better find a way to convince consumers the product is worth more.

    And the opportunities are endless. We live in an age where recording equipment/technology is super cheap and start-up artists have numerous avenues for bypassing record labels altogether, in large part due to platforms like Spotify. It is very, very hard for me to swallow that artists are losing “power” due to these innovations. It’s the record labels that are dying. Artist/consumer exchange is closer than ever before.

    • http://stephencarradini.com/ Stephen Carradini

      I disagree that the difference between $8 (purchase) in an artist’s bank account and $0.0048 (one full stream of the album) in the artist’s bank account is an overgeneralization.

      I agree that artists need to convince consumers that the product is worth more. But my point is that I don’t think there’s a way to do that: there is no check on the consumer’s interpretation of what a musical album is worth. Some people may think that their favorite band’s albums are worth $20 each; some people may think their favorite bands’ albums are worth $10 each and that albums from the rest of the bands they listen to are worth free. And there’s nothing an artist can do to help that process, because the Internet has allowed consumers to institute the audience’s subjective interpretation of artistic value as determiner of costs paid, where it used to be a price-of-entry barrier. That is a fundamental shift that divests the artist of power over setting his own wages (which many other fields get to do, either through starting a business, unionization, or freelancing).

    • Jase

      agree.

  • Eric E

    Earlier this summer there was an article in the WSJ about the differences between the music industry and the publishing industry. Digital music and digital books are both easily pirate-able, but the publishing industry seems to have taken the right steps to build a profitable business model. The author, Rob Reid, says that both industries initially saw a drop in sales but that the publishing industry has made that up while the music industry hasn’t. He claims that the music industry initially essentially forced consumers to either not use digital media or to acquire it illegally. The book industry didn’t force that choice on consumers. The “labels had granted piracy a half-decade monopoly on awesomeness, and consumers had grown technically adept at illegal downloads—and morally comfortable with them, in the absence of any legal alternative.” This is contrasted with digital books, which were basically licensed right away and people didn’t become “morally comfortable” with pirating them. So I think Miller was right that our moral compass needs to change on this issue, but the publishing industry shows that it didn’t have to be that way.

    General question out of curiosity: Does anybody know how artists are compensated for their music being played on the radio? How does it compare to Spotify?

    Regarding Sufjan Stevens, I’d point out that while he owns his own record label, he also streams all his music on his website for free. People seem more than willing to pay for good music. Additionally, I’ve never seen why “free” is seen as a problem – libraries have a plentiful supply of free books (and music!) that people can check out whenever they want. And more people probably have access to a library than to the internet (some people’s only access to the internet is the library). Yet book publishers and music labels don’t worry that the library is de-valuing their books and music. On the contrary, libraries are seen as a cultural good because they make these things available to more people for free.

    I’ll also point out that Stevens just announced a new 5-disc Christmas box set (Vol. 6-10) that you can pre-order for $15 dollars!

    • http://stephencarradini.com/ Stephen Carradini

      A. I am incredibly excited about Sufjan’s new Christmas Box Set.

      B. Libraries work on the principle that there are a set number of books that can be checked out at any one time, then they must be returned. They can not be held indefinitely, or copied perfectly (you can photocopy the whole book if you like, but a stack of 8 1/2 by 11 paper is not the same object as a book, and is perceived differently). Music, however, can be copied perfectly and stored forever. I know people who check out CDs from the library, rip them to their computers, and then return them. I feel really uncomfortable with that, because that’s breaking the fundamental rule that makes a library viable: there are a limited number of copies of this, so you can’t keep a thing for free. You’re borrowing, not keeping–and that’s what makes a library a social good instead of a copyright terror.

      C. I agree that E-books learned quickly, and that’s partially why they have fared well in the digital jump.

      D. I’m not an expert on how radio play works, but I know that this article meshes with what I’ve been told and learned from small experience: http://entertainment.howstuffworks.com/music-royalties7.htm

      • http://www.chriskrycho.com Chris Krycho

        Short version on radio: radio play is much harder to achieve (obviously: Spotify is ubiquitous), but it’s much more lucrative if you actually get played.

    • http://giftsoutright.tumblr.com/ Matthew Miller

      Thanks for pointing out that WSJ article, Eric E. It’s very germane to this discussion, and I hadn’t seen it before.

  • http://metapundit.net/writing/ Simeon

    Some of this is just silly. How is spotify any different from traditional radio? No $$ change hands if fans listen to the radio and increasing listeners support the platform (a radio station) rather than the artist. Is it immoral to listen to the radio because that doesn’t support the artist? Of course artists *want* to be on the radio because increased exposure may lead to increased album and ticket sales.

    The digital economy (essentially free reproduction) makes reasoning about these issues more difficult – and the example of the restaurant moot. In particular it doesn’t harm an artist in any way if millions of consumers take a few free bites of the musical ‘spaghetti’ who otherwise would never have encountered it. In the case of spotify the artist even might make a little money and gain a little exposure – any harm depends on positing that people would have paid to buy an album but don’t because of digital streaming services.

    I think about all these things not just as a consumer but as a producer. I have been a software developer and currently am a programming languages instructor. The company I work for gives all our content away (videos of classes, courseware, labwork, etc) because we have found that for us the free model works – we get great exposure we couldn’t otherwise obtain by giving away our content and get profitable gigs because of it. It turns out that (some) students and companies value the actual face-to-face experience enough to pay well for it even when the digital equivalent is free.

    The same dynamic applies to music: fans want engagement, fans want to attend concerts, fans want physical media with real liner notes and extra goodies and will pay for all those things. The problem for bands is as it always has been: make good music and publicize it enough to cultivate an audience.

    I am sensitive to your overall point that somehow consumers need to pay for the music that they love or the music will go away. But you don’t help your case by cluttering it with false analogies or appeals to respecting the “opinion” of the artist as to the dollar value of the art.

    • http://stephencarradini.com/ Stephen Carradini

      The radio only allows you to hear a certain song intermittently. You can’t have the whole album, and you can’t call that song up when you want to hear it. Spotify turns advertising (which is what radio play is) into using (Spotify).

      My appeal to “respecting the ‘opinion’ of the artist” is the whole point here: is what Sufjan thinks his music is worth what it is actually worth? Or is what a person thinks Sufjan’s music is worth actually what the music is worth? Restaurants set their prices. Plumbers set their prices. Colleges set prices. People have to abide by those. Musicians and labels used to set prices.But in the digital economy, consumers don’t have to abide by the price set by the artist unless they feel some non-compulsory reason to do so. Bands that put their music on Spotify are making the best of a bad situation; in my opinion, the culture has already devalued their agency in setting the fair price for their work.

      You can draw a line with your software analogy to “give away your music free, get good shows,” which is what Derek Webb does. But I think that cheapens the idea that recorded music is valuable. I think it is worth the $16 I paid to Mumford and Sons via iTunes to purchase their record. (Also, what about artists who can’t or don’t want to tour? Those are valuable voices who deserve to be compensated.)

  • Thomas Rowland

    Thank you for the good conversation, between this essay and Mr. Miller’s (who is a good friend of mine).
    Unfortunately I find the a priori assumptions to be wrong: we’re viewing the musician as a producer, not as a performer. Art, in all of history, has always been easy to duplicate, impossible to control. Whether you pay a scribe to copy (by hand) a text, or a hack-artist to copy a portrait, or even using cassette tapes to record songs from the radio (mix tapes, anyone?), “piracy” is not new. In the Middle Ages this wasn’t a problem: anonymous texts abound, and until the introduction of copyright in the 19th century, anyone could write using an author’s “property” (a modern term) – hence the copycat Gulliver’s Travels books, for instance. Before the advent of recording, even music could be “pirated” – if I play fiddle and hear your song, I can learn it and play it for others – maybe even get paid to do so.

    The discussion of piracy, digital rights management, and fair use to artists needs to view artists as _performers_ – meaning we pay the artists for the performance, a one-time event, not a product we take home with us (thus CDs and t-shirts and merchandise become ancillary to an artist’s income). This has been the model for art and artists for centuries – I should point out that historically many authors and artists actually support themselves with other means (other jobs, patrons, or inherited wealth).

    I say this too as someone connected to the music industry: a close friend and teacher is both a full-time artist and manages an independent recording label.

    • http://stephencarradini.com/ Stephen Carradini

      I appreciate that view, and I would say that my idea stands in opposition to that view. As an author of texts and a writer of music (but not a public performer of either, inasmuch as writing can be performed), I am arguing for the value of the created object. But I definitely see that stance as an alternative to this discourse track.

      • http://giftsoutright.tumblr.com/ Matthew Miller

        I’ll interject this, in response to my friend Thomas: I myself could be OK with a notion of musicians as performers, if that approach became a viable path to a consistent living. I’m not sure that’s currently the case, or could be over a long career. Furthermore, since my initial piece was really angled towards creatives in all fields whose work is affected by the digital revolution–and I think Stephen’s piece could have application there too–we have to consider how this works for non-performative careers, like journalism and photography.

        Also, as to the history: I’m entertaining the possibility that we have just lived through a historically unprecedented time of (comparative) largesse for artists. Maybe we’re returning to a culture like most of those in the past, where pursuing art full-time is the province of the independently wealthy. But I would hate to see that become the case.

  • Luke W

    I commented on the previous post about music piracy and can’t help but jump in again. I’m a Nashville musician – I’m one of the people that “suffers” from piracy. I won’t repeat what I posted to the previous article, except to say that the concern over piracy is more the product of panicked music execs than artists and songwriters. The facts don’t bear it out.

    This post has two flaws premises. First about capitalism and music. The market decides what the price of a product will be. Supply and demand. The artist doesn’t have control, the label doesn’t have control, the consumer doesn’t have control. I wrote music today for money. I charged the client what the market will bear. If I overcharge, he will hire someone else. If he underpays, I won’t work for him. It doesn’t matter what I think the product is worth. We negotiate prices based on supply and demand. Art doesn’t sit in some special category. I’m a guy making a living at this. Capitalism is working just fine.

    2nd flawed premise: A song is worth 99 cents. This is based roughly on CD prices ($15 bucks for a dozen songs). This is an artificial price point based on the old distribution method. Consider water: back in the Old West, when access to water was controlled by land owners where the well or creek was located. People paid 25 cents for a hot bath at the hotel above the saloon. In 2012 dollars, that’s what, 5 or 10 bucks? A bath today costs you pennies. Why? Because we have an advanced distribution network of pipes and pumps that can deliver it immediately at higher quality. Music is moving the same direction. Music execs could charge $15 for a CD because you couldn’t get it anywhere else. But now the pipes are in place for instant, cheap distribution and the market will lower the price accordingly.

    I’m guessing in 10 years, you’ll pay your monthly music bill just like your water bill. You always pay something for the access, even if you don’t use much. When you use more, the bill goes up. But it will be pennies per song.

    We’ll look back on this transition as a great explosion of music, with unknown bands getting a piece of the pie that music execs would deny them. Spotify is a glimpse of the new way, a better way. Why does Sufjan Stevens keep his music there? Because it’s the future and he knows it.

    • sayla1228

      I don’t know. I don’ t see art, entrepenuter_ship and commerce ever be friends. At best, there will always be frienemies since American culture, church especially, never really values the arts.

      • James M.

        I don’t know, I think Handel had a spirit of entrepreneurship about him in the 18th century. He was able to take advantage of a growing market for his music from sources other than patrons or the church. We might take a quaint view of his music, but there was a bottom line to that just as there is to any enterprise.

        As to the greater point of the article, I would raise a question about what is meant by the “standard capitalism” practiced in the heyday of the recording industry. If you trace the growth of markets, one common thread is that producers find low cost alternatives to that which already exists. It had to happen in the music industry as in any other. While I agree that music distribution might still be difficult for those moving into the market, control over production decisions is more in their hands than ever. As to the quality of the product, one wonders how that will play out as music is in many ways that much more commoditized. But, just as you can find a special cup of joe in an out of the way place, there are sure to be some diamonds out there.

        BTW, if memory serves me correctly, Apple grossed $18 billion in the first year of iTunes’ existence. And this in the face of those who said that no one would legally purchase downloads. While I’m not sanguine about corrupted human nature, a lot of folks will play by the rules when they know what they are. Yes, the recording industry by and large goofed.

        • http://stephencarradini.com/ Stephen Carradini

          Yes, I would agree that the “standard capitalism” I was referencing is always subject to someone figuring out how to produce or acquire products more efficiently; but this isn’t a moment where a new product undercuts the old product by a little bit of price and carves out a space for itself. This is the bottom dropping out of a system: people going from paying $15 or more to paying nothing. (I’m not advocating for $15 CDs, although I did pay that to get Mumford and Sons’ new album.) This is a radical shift. And we need to reverse it or find a new system to get artists paid. I’m open to both.

          You’re right, though, that commodification increases homogenization. I wrote about that problem at a site called Mule Variations a few weeks ago.

        • James M.

          I should clarify; I love Handel. Simply attempting to make the point that while we take joy in the music without giving much thought to the factors in how it was created, we might lose sight of the fact that he had to provide for his material needs like anyone else.

          • http://stephencarradini.com/ Stephen Carradini

            Yes, I thoroughly agree! That’s why I wrote this article: I don’t like the idea that artists aren’t able to support their material needs if, in this brave new world of digital commerce, the artist doesn’t get paid.

      • http://stephencarradini.com/ Stephen Carradini

        I agree.

    • http://stephencarradini.com/ Stephen Carradini

      I agree that this is a market shift, and a drastic one. But I disagree that the markets control themselves; I think the consumers took hold of this market and they’re driving the price down drastically. Users made Napster, not the industry.

      • Luke W

        Identical arguments were made with each new distribution system. Composers declared that their work would become worthless once it was recorded to a phonograph. Instead of paying to attend the concert for a premium, they complained that people would just pay a fraction for a record, which they could then play over and over. And the musicians nor composers would receive no compensation for these limitless plays! Of course, we see that they were resisting against something that would both expand their audience and bring unheard of profits to composers. The price went down, but the new distribution reached many more people. Mechanical royalties were put in place and fortunes were made.

        Read the testimony of composers at the Congressional hearings about radio. They are nearly verbatim to what you heard from Metallica a few years back when they addressed a Congressional committee about digital piracy. The same handwringing about the worth of their art, how they’ll have no reason to write anymore music.

        Radio, once it was monetized appropriately through performing rights organizations (BMI, ASCAP, SESAC — that’s what they do), didn’t bring on the promised death of music either.

        Same story here. Once the kicking and screaming is over, more people will make more money than ever.

      • http://deleted Luke W

        Users made radio too. And the record companies fought it.

        • http://stephencarradini.com/ Stephen Carradini

          I hear your argument about technological innovation always supplanting but never replacing previous technologies, and I acknowledge that it is historically true. I would be thrilled if that were the case in this situation; however, no one has given me a good answer to how this one is going to shake out, money-wise.

          I’m ready to be part of the kicking and screaming until someone shows me how streaming music (which is where everything is going) can make more than .006 per stream, or invents a way that artists can get fairly paid for the money and work they put into making that recording. I write about, manage, work for and occasionally play in bands that would like to recoup costs on recording studio time/recording studio equipment. That’s the bare minimum, and streaming has made that harder than ever for them. I can’t argue your experience, but those experiences I have seen have not been raking in the cash off streaming.

          • Luke W

            Check out “The Future of Music” by Kusek and Leonhard, to Berklee guys. Came out around 2005, lays out the plan for everyone to make more money through digital streaming. Predicted things like Spotify. There are voices out there with historical perspective and understanding of these cyclical growing pains, but the industry screams louder because you’ve stopped buying plastic discs. They pay a lot of $ to stuff the discourse with rhetoric and fear-mongering.

      • http://giftsoutright.tumblr.com/ Matthew Miller

        Perhaps unsurprisingly, I agree with Stephen’s position that the markets do not simply control themselves. It’s not enough to simply invoke supply and demand, as Luke W. does at 3:32. Recent economic events should have put paid to the crude doctrine that capitalism is a natural force which we can’t gainsay.

        • James M.

          Matthew, I recognize that a lot of ideas may be lurking in your post, and some potentially fair critiques at that. But, the fact that rational people make choices and influence the direction that markets take does not revoke the principle of supply and demand; in fact, S&D is simply a tool to help us understand how markets work. If an exchange is truly free, a price will be reached that gets each party what he wants. If you want to argue for an alternative to that, OK, but both history and the contemporary world is littered with the debris of the collective stifling of human initiative. (One can only imagine such a conversation as this in N. Korea). Sorry if this sways a bit too far off topic, but we are arguing from a “capitalist” platform here.

          • http://independentclauses.com Stephen Carradini

            I think that Matthew and I’s joint post on Friday will answer some of these questions of capitalism “vs.” moral advocacy. I don’t think they’re opposed, but I’d be jumping the gun if I gave our point away here.

  • http://www.facebook.com/mthawk Matthew Hawkins

    Glad to see this discussion among Christians. With piracy an ongoing issue even within the church, I affirm those willing to talk about it. However, there are some unspoken (and false) presuppositions implied about the pre-digital revolution music business in the original post I’d like to address. Pardon if it’s a repeat of what others have said, I’ve not read the comments. I’ll try to be brief here, but I’m happy to elaborate and polish if M.O. finds any value in it.
    Presupposition 1) That most artists made any substantial revenue off of album sales prior to the digital revolution. This was not the case. There are exceptions of course, but assuming, say, a $15 retail price of a CD in the late 90s, very little kicked back to the artist unless sales were extremely successful. About half that $15 was eaten up by shipping and brick/mortar retail overhead alone. What remained first went to the label to recoup their cash outlay for the production of the album, any advances paid to the artist (so they can eat) and marketing of the album. Only when the label recouped all those costs, did the artist ever get paid off album sales and even then, for most artists, it was a fraction (1% -ish) of the chunk going to the label. (Mature artists w/ successful track records would be able to negotiate a greater slice, of course.)
    Presupposition 2) (Related to the first) That musicians did not primarily make revenue of performance and merchandise. There is a reason successful musicians and bands come out of retirement and tour again… that’s predominantly where artists make their money, not off royalties of album sales. And there is a reason The Rolling Stones licensed their lip & tongue logo and why Charlie Daniels had an 18-wheeler merchandise truck… ’cause artists made little money off album sales.
    Presupposition 3) Let’s be extremely cautious when we try to declare a ‘fair price’ for anything. Mr. Carradini credits of the consumer driving down costs. That’s economic gobbledegook. Technological advancement and the simple principles of supply and demand have driven down costs. (We are speaking of a “digital music revolution”, after all, not a “music consumer revolution.”) I don’t discount the waves of displacement felt through the industry. But labels that failed should have realized sooner they were in the
    music business, not the plastic-disc business. Costs have fallen through the ground b/c it’s far cheaper to produce and deliver music than it was. Because those costs have fallen for the musicians and the industry, there (I suspect) are far more musicians competing in the market place. More supply (of recorded music) = less demand (and lower cost) for any single musician.
    I’m sympathetic to musicians (independent and signed) navigating the new world. I think we as consumers should pay for the music we enjoy and not rip it off. Anecdotally, I know I’ve purchased more music (and that of more independent artists) post-revolution then I ever did prior to it.
    Apologies if this is rambling, but I think it’s important for this issue that we back up a moment and define some terminology and the realities of ‘the good ole days’ about what we’re actually comparing the current market to.
    Respectfully,
    Matt
    BBA, Music Business • Belmont U., 2000

    • http://www.facebook.com/mthawk Matthew Hawkins

      (Pardon the large chunk of italics! I evidently left out a closed carrot after the word ‘licensed.’)

      • http://independentclauses.com Stephen Carradini

        Thank you for your long and detailed response! I agree with your first two points; as I noted in an earlier comment about Jacob Slichter’s “So You Wanna Be a Rock & Roll Star,” the excesses of the industry are well-noted. However, I do not think that it’s a good idea to say “things were never good!” and then not seek to compensate artists at a level which they can sustain their personal and professional lives–especially in the digital music era, which lacks many of the sustaining elements that labels provided that kept bands working professionally. Even if they weren’t making much money, they were able to tour and record. If we don’t compensate bands now, there are few structures that will foot the bill, and these bands just won’t be able to record or tour at the large levels that we used to enjoy.

        I disagree that this is not a “music consumer revolution”; I think that is exactly what it is. I structured my article around that concept. The good ol’ days may not have been that great, but I don’t want to use that as an excuse to make these days unfeasible for artists to tour and put out high-quality music.

  • http://independentclauses.com Stephen Carradini

    Oh, weird. If I reply to your post, it stays italicized. I didn’t intend for that to happen.

    • http://www.facebook.com/mthawk Matthew Hawkins

      RE: Italics. Yeah that’s my bad. If you have access to edit my post, you certainly have my permission to correct it. Just delete the open italics HTML prior to the word ‘licensed’ in my post.

  • http://independentclauses.com Stephen Carradini

    @Luke W, I own and have read The Future of Music, and I love their music as water metaphor, but the numbers don’t add up. More correctly: there aren’t numbers in that book.

    They definitely predicted the problem, and the middle ground before the music as water utopia: network advertising (with internet porn as an example, which should be distressing on multiple levels), corporate sponsorship, placement in media and singles sales. All of that came true to some extent. They also predicted a digital utility license run by “AOL, MSN, Yahoo, MTV (Viacom), Sony, cable television networks and others like them” would work, but that hasn’t happened yet in a coherent way.

    The problem is that there’s nothing between where we are now and music as water in their book: i.e. the numbers.

  • http://stephencarradini.com/ Stephen Carradini

    @Luke W, I do agree that there’s a shift going on, and that we need new ways to pay for music. I’m open to those: I am not married to the CD format, or to big record labels. But at this moment, I dislike the streaming model a great deal — but only because it doesn’t pay artists but fractions of a penny. If it paid up so that a living wage was possible for more than the Mumfordy extremes of popularity, I’d be completely on board.

  • http://www.jaimiekrycho.com Jaimie Krycho

    I enjoyed the article and the discourse (all of it I could get through in one sitting, that is). Thanks for the thoughtful article – I’ve heard bits and pieces of this argument before, but not all at once and so cogently.