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A Music Business Revolution
by Christopher Knab - Fourfront
Media & Music - July
2002
Back to Music
Business 101
The evolution of the music business over the last hundred years or so has
been filled with innovation, exploitation, and opportunities for everyone who had an investment in music. Songwriters,
musicians, recording studios, producers, record labels, radio broadcasters, distributors, and retailers, as well
as live performance venues and music publicists, have all struggled to find a way to get the public’s attention
for their products and services. Today however, they are all being challenged by a recording industry in turmoil.
If you are just starting out in this business and or have just recently begun to feel tremors from the music business
earthquake, this article was written for you. Keeping up on the changes going on with music today is a daunting
task, but an essential one if you are serious about making a living with your music. I hope you take this information
for what I intend it to be…an alarm to wake you from any naïve slumber you may be in.
Some Background
The first faint rumble hit around 1982 when a digital storage device for music was introduced to the public, the
CD. Little did anyone know that a revolution was underway that, within twenty years, would shake the recording
industry to its very roots.
Over the next two decades digital information, anything that can be reduced to bits and bytes (1’s and 0’s), was
a marvelous new medium. Not just music, but words (text), photographs, film, and video images became part of this
revolution. Today we find ourselves in a multimedia world where the manipulation of digital content is taken for
granted, but has caused chaos for music creators and business people trying to make a living from their music investments.
In the pre-Internet days, the only way to copy music was to tape a copy of an analog recording. The introduction
of the cassette recorder in the early ’70s caused some concern for the recording industry as the sale of blank
tapes escalated. When the recording industry finally became aware of a threat to record sales because of the cassette
revolution, the record labels successfully lobbied for a tax on blank tapes to appease their fears of being left
out of the income stream for blank tapes. (By the way, to this day recording artists get no share of that income.)
Fears of lost revenue from record sales proved to be unfounded as home taping and trading of favorite music proliferated,
and consumers participated en masse in making tapes of their favorite albums and songs for themselves, their friends,
and family. This, of course, was a good thing. The recording industry had an army of unpaid record promoters working
for them…spreading the gospel of cool music around the world. This analog style of music trading helped the industry
grow substantially throughout the ’80s. The other factor that made music sales increase in the ’80s and into the
’90s was the fact that the labels consciously stopped pressing vinyl versions of most catalog and new record releases.
Consumers were forced to buy new releases or replace their old vinyl favorites on CDs (and buy CD players to play
them on).
When the popularity of home video recorders continued to grow throughout the late ’70s and into the ’80s another
light bulb went off within the entertainment industry. Would the taping of television shows and movies be the end
of the movie industry? Or, would the blank video tape and sales/rental fees from video releases be a boon to the
industry, and ultimately create a new stream of revenue for the copyright holders of films and other video content?
The famous Betamax lawsuit laid to rest, for awhile, any attempts by the entertainment industry to stop consumers
from enjoying the benefits of a rapidly growing technology revolution. Copies of audio or video content encourage
the sampling of a broad spectrum of musical and cinematic creations, which in turn whet the appetite of entertainment
consumers to own their favorite songs, video programs or movies…whether it happens in an analog form or a digital
form. Most consumers of entertainment products prefer to own “the real thing,” the official record or video release,
which requires a monetary transaction. The dramatic adaptation of DVDs today again proves this point clearly. People,
in droves, are re-buying DVDs of their favorite films and other videos.
The changes brought about by cassette and videotape recording and the introduction of the CD were signs that things
were changing, but it would take the personal computer and easy access to the Internet and the World Wide Web to
really set the ground trembling.
The major jolt arrived in the fall of 1998 when Shawn Fanning introduced his compressed audio file trading software
software, Napster, to the world. A new era of digital music trading of MP3 files was born, and all hell broke loose.
Within weeks, two camps were set up. The “Napster Bad” crowd was made up of frightened old fart musicians, record
label executives, and numerous other clueless industry business folks who saw a digital nightmare future and nothing
else. The “Napster Good” crowd was made up of a strange mix of well intentioned free-speech advocates, passionate
music fans, and mad music pirates who would give this new generation of music trading an international profile.
Making Sense of all the Chaos
If you are confused with all the mud-thrown rhetoric from both sides regarding the ethics, morals, and financial
repercussions of all things digital, sit down, take a few deep breaths…and get ready to fight for your right to
copy.
As the summer of 2002 warms up, so does the fight for digital copying. The record labels, television networks,
and movie studios are not going to change their attitude toward file trading. They will continue to defend their
multi-billion dollar vault of music, video, and cinematic fare. They haven’t learned anything from history. They
can only repeat their tired old mantra that “Copyrights are being violated.” Not, “Cool, all this file trading
will groom another generation of entertainment consumers.” They believe that the population at large will be happy
with illegal, inferior quality, digital replications of songs, videos, and movies. They just don’t get it, and
I think I know why.
Thanks to computers, advancements in software, and the Internet, surveys come out almost every day showing how
many millions of files are being traded daily, and billions monthly. But back in the ’70s, when the analog taping
phenomenon was underway, there really was no accurate way to track how prolific this form of “trading” was. Making
audio and videotapes was a huge phenomenon. Just how huge, we don’t know because there were no tracking systems
for analog dubbing. However, it was going on, and to this day many people are still using this old fashioned file
trading system to sample new music, etc.
Some people will say that the inferior analog quality of these audio and video copies was the reason the industry
didn’t get so bent out of shape, and that a digital mp3 file is a whole ’nother story. No it isn’t. Admit it folks,
the fidelity coming from an mp3 downloaded song, for example, is far inferior to the high fidelity of a genuine
CD recording.
And another thing. When it comes to downloading music and movies from the Internet, the consumer still has to take
the time and trouble of storing large files on a hard drive or burning a CDR, and then you go back to the same
situation we had with dubbed videos. You don’t get the official release packaging, and I’m telling you….THAT is
the critical point to remember. Late adopters, the mass public, could care less about bootlegged, or home copies
of any entertainment product…they want the real thing. They always have and they always will!
So, what to do?
Well, it’s going to be a rough ride for quite a while. Look for lots of lawsuits, technological restraints (like
encrypted CD and DVD releases), legislative pressures, and a massive public relations campaign aimed at branding
file traders and disc burners as spawn of the Devil.
Eventually however, things will calm down. The aging CEO’s and other frightened executives currently in charge
at the labels, networks, and movie studios will grow old, and die off, and we can hope…we can HOPE that their successors
will be men and women who have learned that punishing the consumer in any way, or fighting technology instead of
adapting to it, are the wrong way to go.
Let’s salute those to come. Let’s applaud any actions that encourage digital trading and burning, and actions that
invite those who enjoy entertainment products to participate in promotional offers, discounts, and interactive
solutions that award those whose curiosity can always be turned into an honestly earned buck.
As for the creators of art and entertainment… what of them? They must adapt too. They must take more responsibility
for managing their careers, align with businesses who are willing to restructure traditional royalty payment systems,
and look toward an era when technology companies and consumer electronic devise manufacturers share a percentage
of their revenue with the artists.
If a peace cannot be made between all players in the entertainment game, then the future is one that sees international
consumer terrorists becoming as common as their political contemporaries, and no one wins in that scenario.
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Christopher Knab is an independent music business consultant based in Seattle, Washington. He
is available for private consultations on promoting and marketing independent music, and can be reached by email at: chris@chrisknab.net
Chris Knab's new book, 'Music Is Your Business'
is available NOW from the Music Biz Academy bookstore.
Visit the FourFront Media and
Music website for more information on the business of music from
Christopher Knab. |
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