Responses: The Future of the Music Industry

I've noticed that a lot of blogs have been pondering and hypothesizing the future of the music industry lately- probably because of all the recent legal issues and changes the music industry has been through. As Benjamin Disraeli said, "Change is inevitable," and like all other things that may change, the music industry has to adapt to survive as well. Some have found the digital revolution to be beneficial; mostly consumers and performers like Tila Tequila utilized online marketing strategies (check out her ad to the right) before even being signed to a label, and now the girl has a music career, a clothing line, a reality show on VH1, as well as a couple million friends on myspace. On the other hand, the digital age has hurt some people- namely huge record companies, huge artists, and the people behind their music.

Personally, I think that the consumer is getting the best of both worlds while the industry is adapting, where music is readily available and the genres are plentiful. I stumbled upon a couple of posts that talk about the future, and I found my reactions to them to be a little different. One post, from Martin Weller, an Educational Technology professor at Open University in the UK said some things that I just couldn’t agree with about the future of music and content. The other post, over at NYTimes Freakonomics blog by the authors of the bestseller (cover art to the right) by the same name, resonated with me on many points, especially about the record industry model and why today’s consumer is hard to reach. I left comments at both sites, see below:

In response to this article at The Ed Techie, I left this comment:

“As a person who has studied and continues to study the music industry, I find it difficult to hypothesize the future of music itself in regards to content like you have. Music is an ever-changing form of expression, and I know you speak of it as a product (which it is) there are a few things I disagreed with:

You said that "Economics will be the main driving factor in the liberation of content and has focused on individuals or small groups creating content."

In relation to the record label model that is still dominant today and will probably continue to be dominant for at least the next 5 years, economics is the main driving factor behind the restriction of content. The huge record labels give people what they want to hear, or at least what they think they want to hear- even if it's horribly produced teen pop from the 90's. No matter how many different artists these labels sign, what makes the most money will get the most attention.

"Increasingly bands are establishing an online presence, allowing free downloads of their music to build a following, touring, and recording an album, and only then seeking a label."

This is only true for a handful of bands at the moment. Where do you find a band with the money to use professional recording equipment? Most artists still need the financial backing that a record label can provide. A lot of the online super-bands were signed to very small labels, and then signed to bigger names after their small successes.”

I also left a comment on this Freakonomics post:

Like the person above, I wanted to bring up the fact that record labels and artists do not get that much from those 99 cents you paid for their song on iTunes- but other than that, I found myself nodding in agreement throughout my perusal of this post.

"Instant gratification has removed some of the the demand. Music feels like it has become more disposable and cheap, with less staying power....
The Christmas Eve-type excitement and anticipation that used to accompany entertainment seems to have disappeared."

The idea of instant gratification resonates with me, as I wondered why I didn't treasure my new music as much as I treasure my old music library. It's because music has lost the ability to create anticipation. I find it true to say that because things can be previewed or pirated before they are released, they are somewhat less amazing when they are finally released.

"I don’t pretend to know what the industry will look like in ten years, but the funny thing about all of this is that music itself is healthier than ever. The Internet, combined with low-cost (or even no-cost) digital tools, has led to an explosion of creativity, with millions of amateurs making music for every conceivable genre, sub-genre, and microgenre, and then sharing their creations online."

Again, I agree. I read a post on another blog where the author said that the economics of the music industry is ruining the quality of what music is made. I think that is untrue, music is flourishing. It can be likened the the rise in literacy after Gutenberg's printing press- give them books they will learn to read, give them the tools to make music, and they will make music!

"Much of the reduction in sales is the direct result of industry cost-cutting. The major record labels have cut large numbers of staff and severed ties with many artists. Such moves are not necessarily bad business choices, but they suggest that less attention should be given to revenues and more to profits."

Profits are already given a lot of attention. Take the rise of hip-hop. Hip-hop music generates so many hits, the radio is constantly playing the latest and most popular songs of the gigantic genre- why? Because hip-hop is considerably easier and cheaper to make. You don't need to pay a band to make the music, all you need is a computer and a catchy hook. If it becomes a hit, you have much more profit. If it doesn't catch on, nothing to worry about, it cost nearly nothing to make."

DRM Backfires: Why Digital Rights Management Doesn't/Didn't Work

What the Rubik's cube did for the 80's, the iPod and its iTunes software have done it for this generation. The iconic advertisements like the one to the left have helped sell more than 100 million of the oh-so-distinctive iPods. Earlier this year, the people at Apple Inc. celebrated the success of iTunes, Apple’s online music store where almost 70% of online music downloads are sold. Over the past year, iTunes has accumulated sales of more than 3 billion songs, charging $0.99 a single- a single encoded with DRM. DRM, or Digital Rights Management, is a set of limitations built into a digital file. Now, credit has to be given to the music lovers who are perfectly fine with paying $0.99 to legally own a copy of a music file, but others (the majority, it seems) seek ways to save money or circumvent the restrictions of DRM encoded files. Though its intentions were to curb piracy and protect the copyrights of the people behind the music, many companies are moving away from the practice of adding DRMs in their present form to downloadable files because, frankly, everyone is just frustrated. Some even credit DRMs with the rampant use of peer-to-peer file sharing, bittorrent and- though it may sound extreme- piracy. Digital Rights Management on music is now backfiring because of its restrictive nature, the availability of DRM-free music, and piracy.

First, it must be said that when one legally buys a song in any form (on CD, mp3, aac, even on cassettes), they own a copy of that song. To illustrate this, a comment from this article at Red Hat Magazine’s blog does it well:

“When we buy a book….We pay for the pages, the covers, the bindings of that book and the privilege of reading the words of the author. We do not own the words of that author…. but we can sure let others read that same book without legal consequences for breaking a law.

Now…DRM says that when we buy a book, we are the only one allowed to read that book. If our wife wants to read it, she must buy her own copy… If we try to copy that book for posterity or protection from harm, the ink has been made not copyable...”

-Roger

In the present version of iTunes, most songs are encoded with DRM limitations- which means that consumers are not allowed to burn the songs onto a CD more than 7 times, not allowed to change the format of that song to make it compatible with other programs or devices, and they are not allowed to put that song on more than 5 authorized and compatible computers. Buying music that can't be used anywhere but a certain program on a certain device? That equals a monopoly in the digital music world. As Cory, one blogger from boingboing.net put it, "DRM is protection from competition." DRMs prevent the people who buy music from online stores like iTunes from taking full advantage of their music.

Online music consumers also have to deal with music from other outlets. Other online music the fact that it is very easy to get DRM free stores, such as eMusic and Wal-Mart Downloads, sell music that is DRM free. Why should you buy a song with DRM limitations if you can get it, legally, just as easily? It has to be pointed out that while digital downloads are gaining popularity, most albums are still sold on CD. When one buys a CD (and they are DRM-free, thanks to consumer backlash) they are given the freedom to play that CD on any CD player they may come across, take the songs from that CD and play it on their computer, put those songs onto their non-iPod portable media player, and even make unlimited copies of that CD- provided that they do not distribute those copies or make a profit off of them. If the music industry wanted DRMs to be effective, restrictions should have been set on all aspects of music distribution.

Even Steve Jobs, (pictured to the left) CEO of Apple Inc., says that DRMs are hurting the music industry more than helping it. Piracy has become even worse than before, and Jobs finds that the restrictive environment of music forces people to turn to “alternative” methods. According to him, research shows that out of 1000 songs on an iPod, only 22 are legally copied files. DRMs have failed to stop piracy, and that is possibly the biggest reason why the system just doesn’t work. In an open letter by Jobs, “Thoughts on Music,” he requested the four major record companies to think about opening their libraries to DRM-free downloading on iTunes. And if Steve Jobs, the main man behind iTunes and Apple, says that “DRMs haven’t worked, and may never work, to halt music piracy,” then maybe someone should believe him. iTunes has just launched a DRM-free library where the music will cost $0.30 extra, but be compatible with other libraries and devices. The end of DRM may be soon.