Matthew David of Brunel University takes an erudite look at Peer to Peer and the Music Industry - the history of the distribution monopoly and the legal, technical, cultural and economic options going forward - both for artists and the recording industry.
From March 2010
Piratpartiet & The Pirate Party - Working for copyright reform
Showing posts with label music. Show all posts
Showing posts with label music. Show all posts
Tuesday, 7 September 2010
Sunday, 9 May 2010
Big boost in online income for UK Music
(resurrected from my drafts folder...)
PRS for Music - the UK Performing Rights Society has reported on their income for 2009. It's timely as UK MPs prepare to vote on Digital Britain's future to see what dire warnings it gives about the state of music today... what with all that piracy and all....
So what do we find?
Napster was a decade ago... Did it have to take this long?
Piratpartiet & The Pirate Party - Make your voice heard.
PRS for Music - the UK Performing Rights Society has reported on their income for 2009. It's timely as UK MPs prepare to vote on Digital Britain's future to see what dire warnings it gives about the state of music today... what with all that piracy and all....
So what do we find?
- income from digital music downloads is up by over 70%
- income from performances is up by 2,5%
- income from overseas is up 19%
- income from recorded media is down 8,7%
- the rise in income from downloads exceeds the drop in CD sales for the first time.
Napster was a decade ago... Did it have to take this long?
Piratpartiet & The Pirate Party - Make your voice heard.
Saturday, 20 March 2010
Seeing what you want to see. The ICC Digital Economy report.
Thirty two billion euros and six hundred thousand jobs by 2015. Those are the losses due to piracy projected by the ICC report "Building a Digital Economy". Scary stuff...
The report is interesting reading but not totally convincing. If it were a climate report it's the type of publication that would have climate sceptics baying for blood. I'll give some comment here and if you want more analysis read on at Technollamna, Tumbled Logic, and Open.... Overall the authors I think have done a good job of setting out what they have done, and importantly what they have assumed - and in that sense it's a valuable input to the debate that bears study.
My first and biggest problem with the report is that it sets out to evaluate the damage done by piracy - and as such finds the result it is looking for. It isn't a holistic view of the economy and doesn't consider balancing factors - like increased bandwidth usage from non-commercial sharing stimulating the telecoms sector.
The basic premise of the report is that the creative industries and supporting sectors are a major part of the economy and are at serious risk from piracy. They then present figures that show that piracy as they evaluate it amounts to around a 2% of creative industry value. Noticeable but not at a level that supports the premise that piracy is killing creativity. Moreover, they include in their assessments non core industry sectors like paper production (and production of physical recording media) which are much more at risk from the rise of the digital economy than they are from piracy.
They then evaluate piracy losses based on two scenarios - one based on forecast growth of file sharing traffic (+18% p.a) - and the other based on overall growth of consumer IP traffic (+24% p.a). This second scenario, professionally speaking, I consider pure fantasy as consumer IP traffic is likely to be driven by legitimate online and IP-TV rather than an explosive growth in piracy.
Both scenarios miss an important element in a holistic view - which is the consumer's ability to pay. Predictions of traffic growth are based on significant reductions in cost per bit. There is no assumption that consumers are prepared to pay 18-24% per year more for bandwidth - and there clearly is no rationale to think that the value of pirated content conversion to legitimate sales would rise at those rates either.
Put another way - the study assumes a constant percentage of pirated content is lost revenues. Households don't have limitless pockets though, so realistically if content piracy increases the hypothetical conversion is likely to fall. Without some validation of what consumer spending trends are for entertainment content the numbers given are just wishful thinking.
In fact, Tumbled Logic suggests why current trends on Torrent downloading could mean conversion of downloads to sales could be as low as 0,5% - which would cut the estimates in this study by a huge 95%. Assumptions are crucial in reaching a trustworthy result.....
Next we hear how piracy is having huge impacts on the music industry and that reductions in physícal disc sales have collapsed and that piracy must be to blame. This is supposition not supported by the evidence... There is clear evidence that revenues from live performances have substantially increased and that the total music industry revenues including these are stable - and further evidence that shows that there is a switch in buying behaviour from music and other passive media to games - a sector that shows significant growth. Less piracy may have inhibited that shift to live performance and games, but where's the evidence that less piracy would grow the overall available market?
Again, unless a study can substantiate a growth in consumer spending on media over and above existing levels (with for instance cinema attendances at record levels) how can you project huge losses? Here in lies the rub.... as a consumer if I spend more on music, or TV or video, then I spend less on something else. So just where is the economy going to be hit if consumers are buying all their content instead of taking a share online?
Lastly, in this whistlestop critique, is the figures for lost jobs quoted... the hypothesis is that if we increase sales on video 'X' we have more money to employ more people and to create more content. But is that a realistic view? Media companies want to maximise their profits, not maximise their output - and at the end of the day consumers have a finite budget and a finite amount of time to consume content. Is it a given that higher sales will generate employment? Better sales per production could even have the opposite effect... we don't need to create as many films/songs to generate our sales (and profit) targets - so why dilute the market by creating more content?
Seek.. and you shall find. But don't believe everything you read!
Piratpartiet &; The Pirate Party - Make your voice heard.
The report is interesting reading but not totally convincing. If it were a climate report it's the type of publication that would have climate sceptics baying for blood. I'll give some comment here and if you want more analysis read on at Technollamna, Tumbled Logic, and Open.... Overall the authors I think have done a good job of setting out what they have done, and importantly what they have assumed - and in that sense it's a valuable input to the debate that bears study.
My first and biggest problem with the report is that it sets out to evaluate the damage done by piracy - and as such finds the result it is looking for. It isn't a holistic view of the economy and doesn't consider balancing factors - like increased bandwidth usage from non-commercial sharing stimulating the telecoms sector.
The basic premise of the report is that the creative industries and supporting sectors are a major part of the economy and are at serious risk from piracy. They then present figures that show that piracy as they evaluate it amounts to around a 2% of creative industry value. Noticeable but not at a level that supports the premise that piracy is killing creativity. Moreover, they include in their assessments non core industry sectors like paper production (and production of physical recording media) which are much more at risk from the rise of the digital economy than they are from piracy.
They then evaluate piracy losses based on two scenarios - one based on forecast growth of file sharing traffic (+18% p.a) - and the other based on overall growth of consumer IP traffic (+24% p.a). This second scenario, professionally speaking, I consider pure fantasy as consumer IP traffic is likely to be driven by legitimate online and IP-TV rather than an explosive growth in piracy.
Both scenarios miss an important element in a holistic view - which is the consumer's ability to pay. Predictions of traffic growth are based on significant reductions in cost per bit. There is no assumption that consumers are prepared to pay 18-24% per year more for bandwidth - and there clearly is no rationale to think that the value of pirated content conversion to legitimate sales would rise at those rates either.
Put another way - the study assumes a constant percentage of pirated content is lost revenues. Households don't have limitless pockets though, so realistically if content piracy increases the hypothetical conversion is likely to fall. Without some validation of what consumer spending trends are for entertainment content the numbers given are just wishful thinking.
In fact, Tumbled Logic suggests why current trends on Torrent downloading could mean conversion of downloads to sales could be as low as 0,5% - which would cut the estimates in this study by a huge 95%. Assumptions are crucial in reaching a trustworthy result.....
Next we hear how piracy is having huge impacts on the music industry and that reductions in physícal disc sales have collapsed and that piracy must be to blame. This is supposition not supported by the evidence... There is clear evidence that revenues from live performances have substantially increased and that the total music industry revenues including these are stable - and further evidence that shows that there is a switch in buying behaviour from music and other passive media to games - a sector that shows significant growth. Less piracy may have inhibited that shift to live performance and games, but where's the evidence that less piracy would grow the overall available market?
Again, unless a study can substantiate a growth in consumer spending on media over and above existing levels (with for instance cinema attendances at record levels) how can you project huge losses? Here in lies the rub.... as a consumer if I spend more on music, or TV or video, then I spend less on something else. So just where is the economy going to be hit if consumers are buying all their content instead of taking a share online?
Lastly, in this whistlestop critique, is the figures for lost jobs quoted... the hypothesis is that if we increase sales on video 'X' we have more money to employ more people and to create more content. But is that a realistic view? Media companies want to maximise their profits, not maximise their output - and at the end of the day consumers have a finite budget and a finite amount of time to consume content. Is it a given that higher sales will generate employment? Better sales per production could even have the opposite effect... we don't need to create as many films/songs to generate our sales (and profit) targets - so why dilute the market by creating more content?
Seek.. and you shall find. But don't believe everything you read!
Piratpartiet &; The Pirate Party - Make your voice heard.
Wednesday, 9 December 2009
Streaming.... the answer to an industry's prayer?
According to industry figures digital music sales are rising.. the result they say of increased legislation and the introduction of new services like Spotify that meet users needs .. And to be honest it is not a bad thing if commercial music services do appear that provide what consumers want. About time you might say.
That streaming can be the death of pirating is the subject of an article by Mercedes Bunz in the Guardian - pointing to the possibilities that streaming services can bring. But streaming comes at a price - and in any case is not the panacea it seems. Cory Doctorow has an excellent piece on why streaming might make the industry happy, but ultimately won't make copying go away. Basically, from a technical stand point, saving a streaming film or music track is a very small step.... (think radio and tape recorder)
The risk is that this sparks another technology war between the user community and the copyright lobby - with ultimately the only way to enforce copyright being through gross intrusions on your privacy.
More though - streaming is a bad solution when it comes to practical use of the Internet - particularly streaming when on the move. It places very high load as everyone wants to stream at the same time.. Stored tracks on your MP3 player are much more effective.
That last issue is one I've been thinking about for some time. Peer to peer trafiic - downloads - happen in the background. It doesn't matter if they take a bit longer - and you don't need the traffic to get there in real time. It can be low priority in the operator's network - and operators can and do throttle p2p traffic to keep their networks running.
Streaming traffic is live, and time sensitive, and needs to be high priority in the network to get an acceptable service. Not only that but downloading is a 'do once use many' activity, whereas streaming takes bandwidth every time you want to play something - even if you've heard it before. So total traffic will rise - and traffic mixes will shift to make handlling peak loads much more difficult. Streaming is bad news for telecom operators - it is likely lead to them needing to build out capacity to cope with streaming traffic - or disasterous impact on network quality.
Which means that, on top of the bill for monitoring user traffic and policing peer2peer use operators are likely to be stuck with significant costs for network upgrades as streaming music, and particularly video, becomes more popular. They (and we the subscribers) take the cost for the media industry's gain.
Is that how it's going to be in the Digital Economy?
(When I get the time I'll try and make a guesstimate of just how much that extra investment might be.... but it's not going to be small...)
Piratpartiet and The Pirate Party - Working for copyright reform.
That streaming can be the death of pirating is the subject of an article by Mercedes Bunz in the Guardian - pointing to the possibilities that streaming services can bring. But streaming comes at a price - and in any case is not the panacea it seems. Cory Doctorow has an excellent piece on why streaming might make the industry happy, but ultimately won't make copying go away. Basically, from a technical stand point, saving a streaming film or music track is a very small step.... (think radio and tape recorder)
The risk is that this sparks another technology war between the user community and the copyright lobby - with ultimately the only way to enforce copyright being through gross intrusions on your privacy.
More though - streaming is a bad solution when it comes to practical use of the Internet - particularly streaming when on the move. It places very high load as everyone wants to stream at the same time.. Stored tracks on your MP3 player are much more effective.
That last issue is one I've been thinking about for some time. Peer to peer trafiic - downloads - happen in the background. It doesn't matter if they take a bit longer - and you don't need the traffic to get there in real time. It can be low priority in the operator's network - and operators can and do throttle p2p traffic to keep their networks running.
Streaming traffic is live, and time sensitive, and needs to be high priority in the network to get an acceptable service. Not only that but downloading is a 'do once use many' activity, whereas streaming takes bandwidth every time you want to play something - even if you've heard it before. So total traffic will rise - and traffic mixes will shift to make handlling peak loads much more difficult. Streaming is bad news for telecom operators - it is likely lead to them needing to build out capacity to cope with streaming traffic - or disasterous impact on network quality.
Which means that, on top of the bill for monitoring user traffic and policing peer2peer use operators are likely to be stuck with significant costs for network upgrades as streaming music, and particularly video, becomes more popular. They (and we the subscribers) take the cost for the media industry's gain.
Is that how it's going to be in the Digital Economy?
(When I get the time I'll try and make a guesstimate of just how much that extra investment might be.... but it's not going to be small...)
Piratpartiet and The Pirate Party - Working for copyright reform.
Sunday, 15 November 2009
Musicians and the Mona Lisa effect
The availability of music as digital files has made recorded songs a commodity. Reproduction costs are low and there is a huge and ever expanding choice of artists and titles to choose from. Market economics say that prices should fall - and consumers clearly expect that to be the case. It's not unsurprising then to hear that revenues from selling music are falling...
As a consumer I see it as what I call the Mona Lisa effect. Leonardo's masterpiece has world renown - everyone knows what it looks like. The original is worth a fortune - (more probably several fortunes) - but a printed copy in a newspaper, or a jpeg image on the web, is practically worthless. Seeing the copy in the consumer's mind is not the same as seeing the original.
And that's the way it's going in the music industry. Listening to the record is not the same as seeing the original. Musicians are artists - performance artists - and it is in performance that the public value what the artist does. With that in mind it is interesting to read the figures on the Times Labs Blog showing that artists revenues are increasing thanks to live performances - while record label incomes are falling. They have a telling graph that highlights this well - also copied and with comment on Boing Boing, and Christian Engström's blog. The raw data is available here.
Artists income from recordings has fallen 27% over four years - but during the same period artist's income from live performance has gone up 70%, giving artists a net gain of 45% over four years. Not many industries can point to the same good news in the midst of a recession.......
As the Mona Lisa shows - the value lies in the original... remember that next time you see that enigmatic smile ;-)
Piratpartiet and The Pirate Party - Working for copyright reform.
As a consumer I see it as what I call the Mona Lisa effect. Leonardo's masterpiece has world renown - everyone knows what it looks like. The original is worth a fortune - (more probably several fortunes) - but a printed copy in a newspaper, or a jpeg image on the web, is practically worthless. Seeing the copy in the consumer's mind is not the same as seeing the original.
And that's the way it's going in the music industry. Listening to the record is not the same as seeing the original. Musicians are artists - performance artists - and it is in performance that the public value what the artist does. With that in mind it is interesting to read the figures on the Times Labs Blog showing that artists revenues are increasing thanks to live performances - while record label incomes are falling. They have a telling graph that highlights this well - also copied and with comment on Boing Boing, and Christian Engström's blog. The raw data is available here.
Artists income from recordings has fallen 27% over four years - but during the same period artist's income from live performance has gone up 70%, giving artists a net gain of 45% over four years. Not many industries can point to the same good news in the midst of a recession.......
As the Mona Lisa shows - the value lies in the original... remember that next time you see that enigmatic smile ;-)
Piratpartiet and The Pirate Party - Working for copyright reform.
Thursday, 5 November 2009
UK Culture Minister - filesharers to be guilty until proven innocent.
MP Tom Watson has an interview with UK Culture Minister Ben Bradshaw on government plans for cutting off illicit filesharers. Right at the start he answers the question:
" Given ... the proposals to temporarily cut people off as a result of accusations of illicit file sharing by some sections of the music industry, do you think that those people deserve to prove their innocence in a court of law."
To which the answer was " Absolutely, Yes". He then goes on to explain how court orders will be taken out on the basis of accusations - and only then will accused copyright infringers be given the opportunity to prove their innocence.
I was gobsmacked.... How is this an acceptable and fair judicial process? - the burden of evidence (not accusation) ought to lie in proving guilt - not in proving innocence. What sort of tin-pot country are you running over there?
It does of course get around the problem seen in countries like Denmark where prosecutors have more or less given up because providing evidence that stands up in court has proved almost impossible to get.
This neatly sidsteps that issue and instead puts the defendant in the tricky position of proving they weren't the one making downloads....
Reading on in the interview we hear that he doesn't know how much the new systerm will cost to implement, and he doesn't know how much artists can expect to gain as a result. He does however know that the music industy is losng £200m a year from piracy - because they told him.
Then in a wonderful piece of double talk he goes on to tell us that illicit filesharing is potentially devastating for the creative industries - industries that are growing much faster than the rest of the economy. Strange that - if they have such strong growth given the current levels of file sharing, doesn't that kind of say there is no problem???
Some days I wonder what planet these people are on.....
(There's no date on the blog post so I don't know when it was posted - it is reported on P2PNet as being from Novemeber)
Piratpartiet and The Pirate Party - Working for copyright reform.
" Given ... the proposals to temporarily cut people off as a result of accusations of illicit file sharing by some sections of the music industry, do you think that those people deserve to prove their innocence in a court of law."
To which the answer was " Absolutely, Yes". He then goes on to explain how court orders will be taken out on the basis of accusations - and only then will accused copyright infringers be given the opportunity to prove their innocence.
I was gobsmacked.... How is this an acceptable and fair judicial process? - the burden of evidence (not accusation) ought to lie in proving guilt - not in proving innocence. What sort of tin-pot country are you running over there?
It does of course get around the problem seen in countries like Denmark where prosecutors have more or less given up because providing evidence that stands up in court has proved almost impossible to get.
This neatly sidsteps that issue and instead puts the defendant in the tricky position of proving they weren't the one making downloads....
Reading on in the interview we hear that he doesn't know how much the new systerm will cost to implement, and he doesn't know how much artists can expect to gain as a result. He does however know that the music industy is losng £200m a year from piracy - because they told him.
Then in a wonderful piece of double talk he goes on to tell us that illicit filesharing is potentially devastating for the creative industries - industries that are growing much faster than the rest of the economy. Strange that - if they have such strong growth given the current levels of file sharing, doesn't that kind of say there is no problem???
Some days I wonder what planet these people are on.....
(There's no date on the blog post so I don't know when it was posted - it is reported on P2PNet as being from Novemeber)
Piratpartiet and The Pirate Party - Working for copyright reform.
Wednesday, 21 October 2009
An Open Letter to the Music Industry
Rick Falkvinge, leader of the Swedish Pirate Party, Piratpartiet, has issued an open letter to the music industry - following a speech he made at a music industry event in Manchester. While reports of the event are interesting for the reaction the speech generated, Rick's letter is a 'must read' for anyone interested in digital rights and the future of copyright. Right on the button....
Piratpartiet & The Pirate Party - Working for copyright reform.
Piratpartiet & The Pirate Party - Working for copyright reform.
Monday, 5 October 2009
Sampling, Mash-ups.. and copyright
Making music ain't what it used to be....
"The ones who are mad to live" have a closer look at how sampling and re-mixing has changed how music is created - and challenges the relevance of tradional copyright. It includes some interesting embedded video and this succint quote by Johnathan Zittrain, professor of internet law at Harvard Law School.
"..copyright law was written with a particular form of industry in mind. The flourishing of information technology gives amateurs and homerecording artists powerful tools to build and share interesting, transformative, and socially valuable art drawn from pieces of popular cultures. There’s no place to plug such an important cultural sea change into the current legal regime."
Piratpartiet & The Pirate Party - Working for copyright reform
"The ones who are mad to live" have a closer look at how sampling and re-mixing has changed how music is created - and challenges the relevance of tradional copyright. It includes some interesting embedded video and this succint quote by Johnathan Zittrain, professor of internet law at Harvard Law School.
"..copyright law was written with a particular form of industry in mind. The flourishing of information technology gives amateurs and homerecording artists powerful tools to build and share interesting, transformative, and socially valuable art drawn from pieces of popular cultures. There’s no place to plug such an important cultural sea change into the current legal regime."
Piratpartiet & The Pirate Party - Working for copyright reform
Tuesday, 29 September 2009
Lily Allen: Different views, different voices
Lily Allen has been vocal in pointing the finger at piracy and file sharing for times being tough for new artists... And she's had criticism for being a hypocrite in copying material to her blog without being clear that it's not her work.
...and now she has grabbed front page headlines by deciding to close her blog - citing too many abusive comments as a pricipal reason. I think it's a pity.
Shouting down the other side in the debate isn't winning the argument. Moreover, the role of non-commercial file sharing in the economics of the media industry is a matter of politics and economics. Unfounded personal attacks and name calling do nothing to take the debate forward and only serve to alienate.
Artists and songwriters have legitmate concerns over where the music industry is going. A channel to make their voice heard is a valuable contribution to the debate - and one that deserved to be met by reason, not rabble.
...and now she has grabbed front page headlines by deciding to close her blog - citing too many abusive comments as a pricipal reason. I think it's a pity.
Shouting down the other side in the debate isn't winning the argument. Moreover, the role of non-commercial file sharing in the economics of the media industry is a matter of politics and economics. Unfounded personal attacks and name calling do nothing to take the debate forward and only serve to alienate.
Artists and songwriters have legitmate concerns over where the music industry is going. A channel to make their voice heard is a valuable contribution to the debate - and one that deserved to be met by reason, not rabble.
Wednesday, 23 September 2009
Right symptom, wrong diagnosis: Lily Allen on music piracy
Lily Allen has made the headlines talking about the impact of filesharing on the music industry - but while she recognises the symptoms she really is pointing to the wrong diagnosis...
(The original post has dropped off her blog.. but it's widely quoted - like here at the Times...)
In her blog in an article targetting the Featured Artist Coalition opposition to stricter measures against filesharers she complains that new musicians are finding times hard...
Quoting...
"The coalition also says that file sharing is good because it “means a new generation of fans for us”. This is great if you are a big artist at the back end of your career with albums to flog to a new audience, but emerging artists don’t have this luxury."
..and further on
"They (music executives)have been complacent about new technology and spent all the money on their own fat salaries, not industry development. As they start really to lose out from piracy, they’re not slashing their salaries, they’re cutting what they invest in A&R (artists & repertoire). A&R people won’t have the funds to take risks, which again makes British music Cowell puppets."
New artists struggling, artists with back catalogs doing nicely thank you, and record companies unwilling to take risks are precisely what you expect - not from piracy - but from the structural change that online digital music has made to the business. New artists compete not just with their contemporaries but with every artist ever released. Back catalog sales suck sales from new artists, and record companies get better returns selling old tracks than developing new talent.
Lost sales to piracy are hypothetical... (no one really thinks a teenager would cough up another $800 for all the downloaded tracks on their mp3 player do they? ) Competition from millions of back catalog tracks is real and the key element that puts new music at risk. (Why total music sales are dropping is a different question for another post)
Two things are needed...
(The original post has dropped off her blog.. but it's widely quoted - like here at the Times...)
In her blog in an article targetting the Featured Artist Coalition opposition to stricter measures against filesharers she complains that new musicians are finding times hard...
Quoting...
"The coalition also says that file sharing is good because it “means a new generation of fans for us”. This is great if you are a big artist at the back end of your career with albums to flog to a new audience, but emerging artists don’t have this luxury."
..and further on
"They (music executives)have been complacent about new technology and spent all the money on their own fat salaries, not industry development. As they start really to lose out from piracy, they’re not slashing their salaries, they’re cutting what they invest in A&R (artists & repertoire). A&R people won’t have the funds to take risks, which again makes British music Cowell puppets."
New artists struggling, artists with back catalogs doing nicely thank you, and record companies unwilling to take risks are precisely what you expect - not from piracy - but from the structural change that online digital music has made to the business. New artists compete not just with their contemporaries but with every artist ever released. Back catalog sales suck sales from new artists, and record companies get better returns selling old tracks than developing new talent.
Lost sales to piracy are hypothetical... (no one really thinks a teenager would cough up another $800 for all the downloaded tracks on their mp3 player do they? ) Competition from millions of back catalog tracks is real and the key element that puts new music at risk. (Why total music sales are dropping is a different question for another post)
Two things are needed...
- Musicians. Stop expecting record companies to discover you and market you. The internet gives you direct access to the public...
- Cut copyright terms. Hard. The only thing that will persuade the industry to invest more in new talent is to take away the crutch of a fat back catalog and focus them on finding new music and artists to promote. Copyright is supposed to promote creativity not stifle it....
Saturday, 5 September 2009
Why it doesn't pay to be a musician.
Back before the summer... well, my holiday at least... I watched the debate on Internet Filesharing on Al Jazeera between Christian Engström (Piratpartiets MEP) and Richard Gibbs, an American composer supporting artists rights.
Watching the debate about the impact of filesharing on the music industry I was struck that really the whole subject is missing the point. Filesharing isn't why it's hard for artists to make a living...
I was reminded of it again tonight reading the comments on the Guardian article linked in my last piece. Someone there opined that we will look back on the last 50 years as the golden age for popular music. And the thing is, they could be right.....
There are some fundamental facts about recorded music that mean that it will be increasingly hard to make a living out of recordings.... which boil down to that old favourite, supply and demand.
There are today millions of recorded tunes. Each year there are tens of thousands of new ones. The costs of creating a recording are dropping. The rate of new recordings are increasing. Recordings don't go away.
What does this mean? Supply is BIG.... and growing. The number of artists competing for income grows and grows - and even if an artist retires their recordings are still there competing for the customer's attention. Consumers on the other hand don't have endless pockets - there's only so much they are going to spend on recorded music.
And you want to release a record and make it big? That's really not a healthy market to be trying to take your share of..... not least since oversupply will inevitably lead to lower prices.
Now... if you sell cars you get rid of last years' model when you start selling your new one. As we see though that doesn't really happen in the music business. Not any more at least. Record labels have had a grip on distribution and production and previously have been able to restrict the artists reaching the market by not making new pressings of their back catalogs. This makes a natural restriction on the range of artists in the market at any time. But that has all changed. Digital techniques mean back catalogs are now just as accessible and marketable as the latest artists.
Ten years ago an artist's recordings competed with all the other music that was in current release. Today you have to compete with every record that has ever been released. Doesn't that sound like things are much tougher than they used to be? For the artists...
How do things look over at the record company?
Well.... if we look at all that music you can reckon that `BIG slice of consumer spending is going to go on old recordings... simply because there are so many of them. So, if you are sitting on a big back catalog this is great news... a bigger catalog translates to a bigger market share and more revenues. No new recording costs and very little investment needed in promotion and marketing.. Is it a surprise that they have lobbied so hard for copyright extensions?
Making back catalogs available does though have consequences even if you run a recording company. If releasing older tracks takes a bigger share of the market - which seems intuitive, but I've not yet tried checking in the figures - then new recordings are fighting for a smaller share of the pie. Returns for record companies are lower and risks are higher - and that too is not good news for artists looking to hook a contract (if you need to these days?).
So.... don't give up the day job.
Watching the debate about the impact of filesharing on the music industry I was struck that really the whole subject is missing the point. Filesharing isn't why it's hard for artists to make a living...
I was reminded of it again tonight reading the comments on the Guardian article linked in my last piece. Someone there opined that we will look back on the last 50 years as the golden age for popular music. And the thing is, they could be right.....
There are some fundamental facts about recorded music that mean that it will be increasingly hard to make a living out of recordings.... which boil down to that old favourite, supply and demand.
There are today millions of recorded tunes. Each year there are tens of thousands of new ones. The costs of creating a recording are dropping. The rate of new recordings are increasing. Recordings don't go away.
What does this mean? Supply is BIG.... and growing. The number of artists competing for income grows and grows - and even if an artist retires their recordings are still there competing for the customer's attention. Consumers on the other hand don't have endless pockets - there's only so much they are going to spend on recorded music.
And you want to release a record and make it big? That's really not a healthy market to be trying to take your share of..... not least since oversupply will inevitably lead to lower prices.
Now... if you sell cars you get rid of last years' model when you start selling your new one. As we see though that doesn't really happen in the music business. Not any more at least. Record labels have had a grip on distribution and production and previously have been able to restrict the artists reaching the market by not making new pressings of their back catalogs. This makes a natural restriction on the range of artists in the market at any time. But that has all changed. Digital techniques mean back catalogs are now just as accessible and marketable as the latest artists.
Ten years ago an artist's recordings competed with all the other music that was in current release. Today you have to compete with every record that has ever been released. Doesn't that sound like things are much tougher than they used to be? For the artists...
How do things look over at the record company?
Well.... if we look at all that music you can reckon that `BIG slice of consumer spending is going to go on old recordings... simply because there are so many of them. So, if you are sitting on a big back catalog this is great news... a bigger catalog translates to a bigger market share and more revenues. No new recording costs and very little investment needed in promotion and marketing.. Is it a surprise that they have lobbied so hard for copyright extensions?
Making back catalogs available does though have consequences even if you run a recording company. If releasing older tracks takes a bigger share of the market - which seems intuitive, but I've not yet tried checking in the figures - then new recordings are fighting for a smaller share of the pie. Returns for record companies are lower and risks are higher - and that too is not good news for artists looking to hook a contract (if you need to these days?).
So.... don't give up the day job.
Friday, 4 September 2009
The light dawns. Artists speak out.
There's a really interesting piece in the Guardian today that's picked up by both HAX and Michael Geist. It covers vocal opposition by artists groups in the UK to recent government proposals to retable 'three strikes' and internet bans for persistent filesharers.
The article is interesting on a number of levels...
Firstly it's welcome to see artists coming down on the side of their public and opposing the demonising of non-commercial sharing - and the equally welcome conclusion that sterner legislation is not the answer.
Secondly, it highlights the changing balance of power between artists and distributors (the record companies) which it attributes to the falling value of recorded music - You could see it another way too... with reproduction and distribution on the Internet being so cheap (free...?) the value of a distributor disappears - not just the value of the product.
Thirdly, it highlights evidence that tour revenues are up significantly - showing that there is healthy interest in seeing live music and real sources of income for bands in doing what musicians do - make music.
The recording industry meanwhile are cast in their traditional role.... in full support of the government proposals... while trying to lock in their artists to '360 degree' deals to take their slice of artists income from tours and other promotions. No one likes losing control.....
Last but not least of course, its great to see the insights of the mainstream press beginning to see the music industry in the same light as The Pirate Party and Piratpartiet. The internet makes it all but free to distribute all forms of 'digital' culture. Businesses need to adapt to that new reality. You can't put the genie back in the bottle - and legislating to protect outmoded ways of doing business is not the answer - not least when it means private policing and infringing peoples rights to privacy in the process.
The article is interesting on a number of levels...
Firstly it's welcome to see artists coming down on the side of their public and opposing the demonising of non-commercial sharing - and the equally welcome conclusion that sterner legislation is not the answer.
Secondly, it highlights the changing balance of power between artists and distributors (the record companies) which it attributes to the falling value of recorded music - You could see it another way too... with reproduction and distribution on the Internet being so cheap (free...?) the value of a distributor disappears - not just the value of the product.
Thirdly, it highlights evidence that tour revenues are up significantly - showing that there is healthy interest in seeing live music and real sources of income for bands in doing what musicians do - make music.
The recording industry meanwhile are cast in their traditional role.... in full support of the government proposals... while trying to lock in their artists to '360 degree' deals to take their slice of artists income from tours and other promotions. No one likes losing control.....
Last but not least of course, its great to see the insights of the mainstream press beginning to see the music industry in the same light as The Pirate Party and Piratpartiet. The internet makes it all but free to distribute all forms of 'digital' culture. Businesses need to adapt to that new reality. You can't put the genie back in the bottle - and legislating to protect outmoded ways of doing business is not the answer - not least when it means private policing and infringing peoples rights to privacy in the process.
Who wins by restricting choice?
I was thinking..... A dangerous habit, but it happens from time to time. ...Thinking about online music, and 'personalised radio' in particular. That's sites that stream music to you based on the sort of music you like . It was prompted by a piece at the Digital Audio Insider on revenues from Lastfm - an interesting artists eye view of getting paid for putting music online.
Now on sites like Lastfm royalties get paid for each streamed play... Which means that if I like an artist it's in their interests that I can choose to play just that artist, and in the songwriters interests that I can play just that song. But what happens in practice is that what I get is a different artist playing a different song.. And the revenue I might have generated for an artist I like goes instead to someone I never really asked to listen to.
So who wins by not letting me choose?
Answers on a postcard please
Now on sites like Lastfm royalties get paid for each streamed play... Which means that if I like an artist it's in their interests that I can choose to play just that artist, and in the songwriters interests that I can play just that song. But what happens in practice is that what I get is a different artist playing a different song.. And the revenue I might have generated for an artist I like goes instead to someone I never really asked to listen to.
So who wins by not letting me choose?
Answers on a postcard please
Thursday, 23 July 2009
More beer....
Actually, thinking about it...
The decline of the pub trade is probably a result of the rising sales of digital media. Everyone is at home watching cable TV, pay to view films, listening to music and playing games. Therein lies the rub... you can't buy films and music AND spend it on beer.
The decline of the pub trade is probably a result of the rising sales of digital media. Everyone is at home watching cable TV, pay to view films, listening to music and playing games. Therein lies the rub... you can't buy films and music AND spend it on beer.
Wednesday, 22 July 2009
Pubs in decline. Music is small beer...
The British Beer & Pub Association published this week a report on the decline of British pubs. An average of 52 pubs closed every week in 2008 with an estimated 24 000 jobs lost.... By historical standards it's a very high level and a true cause for concern to see this British institution in such decline.
The BBPA are quick to point the finger at increased regulation and taxation as the cause for the decline - althought without actually researching why people are not going to the pub it is a bit bold to come to a conclusion. Other reports - you can find it in the Times, Financial Times and The Telegraph for instance - raise other factors into the equation.
City pubs are faring much better than country pubs, and pubs focussing on food are doing better than those that are out and out drinkers pubs. One report suggested that tied* pubs are particularly hard hit, suggesting that it is monopolistic practices in the brewing trade that are at least as much to blame as government tax policy, and the high level of rents are a long standing issue of concern for landlords.
But.. go back to the beginning and read again... 24 000 jobs lost in the pub industry. Real jobs. People that worked last year that don't have the same job this year. Now compare that with the estimated cost to the economy of free downloads in the UK. A postulated four thousand jobs lost in 2004.
So... the crisis at your local is hurting the economy six times more than any potential loss of sales to file sharing. Remember that the next time someone down the pub starts rattling on about the costs of piracy.
Music is small beer... go have another pint!
*A tied pub is independantly run, but under obligation to buy beer from a particular supplier - often above the market rate.
The Pirate Party & Piratpartiet are working for copyright reform. Can't you add cheap beer to the manifesto guys?
The BBPA are quick to point the finger at increased regulation and taxation as the cause for the decline - althought without actually researching why people are not going to the pub it is a bit bold to come to a conclusion. Other reports - you can find it in the Times, Financial Times and The Telegraph for instance - raise other factors into the equation.
City pubs are faring much better than country pubs, and pubs focussing on food are doing better than those that are out and out drinkers pubs. One report suggested that tied* pubs are particularly hard hit, suggesting that it is monopolistic practices in the brewing trade that are at least as much to blame as government tax policy, and the high level of rents are a long standing issue of concern for landlords.
But.. go back to the beginning and read again... 24 000 jobs lost in the pub industry. Real jobs. People that worked last year that don't have the same job this year. Now compare that with the estimated cost to the economy of free downloads in the UK. A postulated four thousand jobs lost in 2004.
So... the crisis at your local is hurting the economy six times more than any potential loss of sales to file sharing. Remember that the next time someone down the pub starts rattling on about the costs of piracy.
Music is small beer... go have another pint!
*A tied pub is independantly run, but under obligation to buy beer from a particular supplier - often above the market rate.
The Pirate Party & Piratpartiet are working for copyright reform. Can't you add cheap beer to the manifesto guys?
Monday, 20 July 2009
What price MP3? The hidden cost of streaming music.
MP3 is widely associated with web distribution of music, and the movement to free music from the constraints of physical delivery. Free music is often considered synonymous with MP3. But MP3 is not free.. There are patents on MP3 so if you want to sell hardware or software to code or decode MP3 you need to pay a fee.. and if you want to run a commercial streaming music service based on MP3 you also need to pay a fee.
Looking just at the latter case… a quick look at the MP3licensing site shows that if you gross more than $100 000 dollars a year you need to pay a 2% licensing fee. Now MP3 is really nifty stuff so you might think two percent is not that unreasonable… but let’s think about my streaming business. Let’s say after all my costs are in I might be aiming for a profit of ten percent on turnover… That means that a two percent license cost eats a fifth of my profit. Or put another way… four days a week I work for my shareholders, and one day a week I work to pay off the MP3 license fees.
So… Free music anyone?
“Ogg Vorbis is a completely open, patent-free, professional audio encoding and streaming technology with all the benefits of Open Source.”
So why isn’t everyone using .OGG?
And don't forget.... The Pirate Party & Piratpartiet are working for patent reform
(NB: I haven’t checked out the norm for profit levels for streaming music businesses.. treat this as an example, and if you have real numbers let me know)
Looking just at the latter case… a quick look at the MP3licensing site shows that if you gross more than $100 000 dollars a year you need to pay a 2% licensing fee. Now MP3 is really nifty stuff so you might think two percent is not that unreasonable… but let’s think about my streaming business. Let’s say after all my costs are in I might be aiming for a profit of ten percent on turnover… That means that a two percent license cost eats a fifth of my profit. Or put another way… four days a week I work for my shareholders, and one day a week I work to pay off the MP3 license fees.
So… Free music anyone?
“Ogg Vorbis is a completely open, patent-free, professional audio encoding and streaming technology with all the benefits of Open Source.”
So why isn’t everyone using .OGG?
And don't forget.... The Pirate Party & Piratpartiet are working for patent reform
(NB: I haven’t checked out the norm for profit levels for streaming music businesses.. treat this as an example, and if you have real numbers let me know)
Monday, 13 July 2009
Tell it how it is - bankers on the web
The Guardian reports today under the title 'Twitter is not for teens' on a report by Morgan Stanley on internet usage by teens. What makes it diferent is the report is witten by a 15 year old 'intern' at the bank.
The report:
The report:
- dismisses Twitter
- says online advertising is pointless
- teenagers are using more and more media, but are not willing to pay for it
- most teenagers have signed up for Twitter, but aren't going to use it -'they realise that no-one is viewing their profile so their tweets are pointless'.
- no teenager reads newspapers regularly
- and they are put off by intrusive advertising so they prefer listening to advert-free music on websites such as Last.fm ..
- advertising is seen as extremely annoying and pointless.
- most teens have never bought a CD
And so it goes on.
I guess at the bottom this is anecdotal evidence from a small sub-sector of the teen generation - but it is clear that how young people see the online world is not how most politicians and industry leaders would like to have the world. It is perhaps a sign of the times that investment bankers are now telling their clients that things ain't like they used to be....
But really this shouldn't be a suprise.. this is exactly what the Piratpartiet has been saying for some time.
Links: The Pirate Party, Piratpartiet
Tuesday, 7 July 2009
Featured Artist Manifesto
Searching round for something else I found a news article I'd missed on the launch of the Featured Artist Coalition - a trade and lobby group set up to lobby for artists rights within the music industry. The groups premise is that featured artists - the main name on the cover - are what sell music, but that artists in fact get a bad deal from the music companies and that no-one is representing artists interests as the industry moves into the digital age. (You might wonder what the musician's union has been doing for the last fifty years?)
While viewpoints can differ on what are sensible limits for copyright I find a lot to sympathise with in their manifesto:
- artists rights should be licensed not assigned - meaning artists keep rights to their work
- licensing should be fixed term and lapse back to the artist
- artists should get paid on the same terms as songwriters (who get paid whenever their work is played in a cinema showing for instance)
- copyright owners should be obliged to 'use it or lose it' preventing work being lost to the public (with consequent loss of earnings for the artist)
Last but not least they also support a key plank of Piratpartiet's policy on copyright - that it should not be a criminal act to share music for non commercial use. They specifically distance themselves from the music industry making villains of their customers.
As a lobby organisation they will have two things working in their favour... first that they are fronted by a number of well known pop celebrities including Billy Bragg, Jools Holland, David Gray, and the amazing Annie Lennox (The clip is there in sympathy for all those used and abused artists.. ;-)
The second is that membership is a mere 5% of an artists UK performing rights income - which should give them a healthy warchest to lobby from. (That was 5% tax deductable so the tax payer will be paying for a chunk of their lobbying activities... which goes a bit against the grain).
Footnote: They estimate an average artist would pay a few hundred pounds a year - equivalent to about £8000 gross income. Most artists dont make enough to live on then......
Working 9 to 5: pay up or face the music
"Nine to five
What a way to make a livin'
Barely gettin' by
It's all takin' and no givin'
They just use you mind
And they never give you credit...."
....as made famous by Dolly Parton
It's no news that STIM, the Swedish performing rights society, wants payments from companies using music in their business or playing music in the workplace. Now though they have gone one further and started requiring licensing from companies that 'give their employee the possibility to play music'. ... which includes those providing them with a PC capable of playing tunes... which is pretty much any computer you can buy.
At up to 40 000 kronor per company (around £3300) that's a fat price to pay for something you dont even know get's used. Not only that of course but if you are playing music at your desk you're most probably not playing out loud i.e. making a public performance, and you have probably already paid for the music at least once - either buying the disc or download - or by the radio station paying to STIM.
Reading between the lines this looks like another case of outdated rules. Not so very long ago if the company gave you the ability to play music that usually meant a radio that was going to be played to the room. These days a music player comes free on every computer - a tool for the trade. It used to make sense that a company providing a means to make music meant it to be used in public... but that isnt true any more, and STIM wanting a tax on computers is just plain stupid - except of course they already have a tax on media and hard drives :-(
It is though another good example that you never pay for music.. but they are quite happy to get paid for letting you play music you already own.
Could this be why Piratpartiet and The Pirate Party are working for reform of copyright?
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