Ethan Kaplan writes a beautiful tribute to the value of music, and how we as a society must come to terms with how we will value it as the business model around recorded music continues to disintegrate.
I call BS on the whole post.
His central questions are “How do you value art?” and “How do you ensure that the value of art can translate into the notion of making a living on art?”
So far, so good. A discussion about music industry troubles, framed from the point of view of the artist. But then, a red flag: “What role does a government body play in the propagation of the meme of art creation? Support? Education? Distribution?”
I tried to keep an open mind throughout the rest of the post. Even though he’s the VP Technology at Warner Bros. Records. And even though the parent company to Warner Bros. Records is currently pitching the horrendous idea of a music tax to replace lost music label revenues.
But all Kaplan has done is take the arguments that his boss made a couple of weeks ago and repackaged them in touchy-feely “what about the children artist?” language. He’s proposing the removal of market forces in the music industry, since those forces no longer work in favor of the company he works for.
“The concept of art is fundamental to our identity as humans,” he says, and “the worst to the best music is art without any regard to its inherent quality.” This is a setup for a big group hug among musicians; a sort of revolutionary cry for brotherhood against…well, against everyone else. He adds that we must find a way to “remove the fear-politics and the pro-ignorance in the US society” which, presumably, is the direct cause of a decline in revenue at Warner Bros. Records. I mean, the decline of valuing the artist as a human being.
Lets not frame the debate around “monetary models around digital music” he suggests. Instead, let’s “step back to the root and evaluate as a society the place of Art within it.”
How do we do that? Government support of musicians.
Within Europe, it is actually pretty easy (relatively) to make a living as an artist, depending on the country. I have friends in certain countries who are Artists by trade, supported through government programs. Canada supports art through liberal granting. In those areas, the value of the artifact of art is less of a concern than the value of the process of creating. And the same does and should apply to music as a form of art…It’s my opinion that before we start down the path of “how do you value digital artifacts” and “how do you value music,” we also need to evaluate how we as a society value art. How do we as a government, a democratic society support artists to the point where the value of experience is enough to support the act of creation?
Strip away all the flowery language and what you have is a music industry executive calling for the “pro-ignorance” US society to value music as art no matter whether it’s the “worst” or the “best.” He talks about how great European artists have it with government subsidies. And he’s doing it weeks after his boss called for a music tax.
Like I said, I call BS.
I pretty much agree. Kaplan tends to frame issues in system approaches — removing the human morality and choice. He seems to have a low opinion of people’s ability to work through change and find solutions. And wants to impose broad solutions.
Dude, Mike…Canada does it.
Don’t you know how awesome Canada is?
I’m going to move there any minute.
agree. btw Michael, do you ever take vacations?
Hooray horrible self-serving ideas!
A big point that is missed in his article is that people treat art and especially music as a commodity because his industry made it that way. Music is no longer a special thing because of the record companies. I use to be able to travel across country and hear each region’s version of their top twenty. Now when I travel every top 40 station plays the same thing.
All rap has to be gangsta rap, all pop has to be in the mold of britney spears. They made it into a formula and now they are asking the government to turn it back into a special endeavor. An endeavor of love. Too late, don’t come crying now about it being an art form.
There is an easy way for artists to make more money giving their music away, instead of selling it, without advertising. It just hasn’t launched yet.
I’d just like to point out that “value” isn’t necessarily a touchy-feely thing. Pricing models come out of micro-economics, which centers around individuals and what they value. Money vs Time, A vs B, and so on.
We’re very much at an inflection point right now in this industry. The old pricing model doesn’t work, and our predecessor’s attempts to MAKE it work were disastrous. DRM has now gone the way of dongles, but we’re pretty sure we’re not the only ones who want to find a way to get music artists paid.
If people really can’t make a living making music, they won’t. Artists like Radiohead and NIN can pull their “look ma, no label!” stunts and get away with it because they’ve had years of promotion from labels to raise their fanbases to the point where that works. For the smaller guys, it’s still an ugly market out there.
But, we’re digital now. Long run, price = marginal cost, cost of digital files = zero.. we get it, but where does it leave us? We have to find a new pricing model for this that isn’t “one file = $x”.
But pricing models come from value. So, I think we’re starting at the right place. And it’s ok, we know we have a long way to go from there.
Disclaimer: My office is next to Ethan’s.
Hear Hear!!
There are many digital music models in place right now that would work if the record labels would stop licensing based on units and go to a % of revenue model. Even then, P2P has to be stopped. It’s fucking illegal. People invested thousands of hours and millions of dollars to make the music distributable. ISPs should be forced to filter copyrighted material. If a musician wishes to distribute without copyright, more power to him, but those who invested expecting copyright deserve the protection of the law.
@3. The real Michael is always on vacation. The posts you read from him are written by his army of clones.
Also, to DJBigDaddy,
I believe that comes more from the ClearChannel problem than from Labels have no incentive to see just a few artists succeed while others languish.
I’m with #3, SD. I agree AND take a break!
If artists need subsidies let them become panhandlers — some panhandlers have mastered “performance art” plus provide the service of making other people feel better about themselves. But why not extend it to every blogger who whines about not making any money off their blogs. What is art? I’d support a “B-List Blog Tax” before this junk.
As for you taking a break, if you want 2 tix for tomorrow’s Giants/Cards games let me know and I’ll ticket relay them to you. I’m not sure how healthy beer/brats are, but there are so many iPhones now the ballpark wifi is practically useless so you’d at least get away from the machine for a few hours.
Don’t think of it as a gift, but a tax I’m willing to pay for for art I actually appreciate!
Crystal – YES!!!! But I value oxygen, too. Way more than music. And I’ve never paid for it. If you want to talk economic theory, lets.
I really think we need to value bloggers more as a society. So many of them are unable to make a living while creating their art. This free model with streaming content plus an advertising wrapper just isn’t working.
“The concept of blogging is fundamental to our identity as humans.”
“The worst to the best blogging is art without any regard to its inherent quality.”
If we just charged everyone in the U.S. $5/month to support bloggers, we could amass a $20 billion a year war chest to distribute to these artists in need.
“Even then, P2P has to be stopped. It’s fucking illegal. ”
Waah waah fucking waah. It costs next to nothing to make music. Record companies are useless and have ass-raped consumers for so long; it’s such sweet revenge to see them getting obliterated by P2P.
There’s nothing touchy-feely about stealing from people to bankroll your choices in life. Thieving scum.
There are many-many things where market failure will lead to under-production.
Art is not one of those.
(and how do we decide which artists to pay more than others? wouldn’t everyone want to become an artist?)
I believe the whole Radiohead and NIN will be a great test for Creative Commons licensing. The remix contest for the “naked” track of Radiohead pushes the boundries much further than most large labels are ready to go. Unfortunately, for them, they may have already missed the boat, yet again.
“If we just charged everyone in the U.S. $5/month to support bloggers, we could amass a $20 billion a year war chest to distribute to these artists in need.”
If you fire Duncan Riley and start posting intelligent stuff, I just might support this.
Michael – I didn’t think I had to throw in the whole concept of scarcity.. but ok!
Oxygen… no scarcity, no differentiation (unless you’re talking about LA, and then it becomes quickly apparent why people will pay so much more to live west of the 405), and no containable distribution system.
But when was the last time you bought a bottle of water? I hear that’s available for free too. But we differentiate.
As for relating blogging to music… I don’t see much of a difference here.
Blogging: Want it for free? Go to my website, there are ads, but you get the content. And if I write a book, you have to pay for it. If you want to see me speak at a conference, you’ll need to pay for that too. But you’ll want to, because you dig my blog.
Music: Want it for free? Turn on the radio, there are ads, but you get the content. And if I have a concert, you’ll need to pay to come. If I put out an album, you’ll need to pay… oh wait – that’s our problem here.
If there were a music tax, shouldn’t it go directly to the musicians anyway? Cut out the record companies.
But Mike’s point in #12 was the key: The amount you value something and the prices are different. Music is valuable but the marginal value of each new bit of music is very small. (Oxygen is valuable; the marginal value of an oxygen atom is negligible.)
Streaming ad supported music maybe the way of the future, as opposed to a music tax! Fortunately, we are seeing this now with movies and TV shows ( Hulu ). Many early adopters no longer have cable TV and as time goes on more will follow.
In the end though all this free streaming will prompt our ISPs to change the way they bill us (bandwidth monthly plans pay for overage). Content industries should focus on this upcoming change to recoup their investments!
I use to work promotion and security for a bunch of artist in the industry for 6 years. Before that I went to school and studied business management instead of communications so I could one day open my own music label. My biggest dream was to get in the industry. Then I was actually exposed to the industry. Now I’m a programmer.
We should find a way for artist to get paid and file sharing is wrong but the record labels are the biggest bunch of crooks and they treat their artist and the subsidiary people who work alongside the artist to help promote them like shit.
I will give an example. Record companies give away music to three sets of DJ’s in Hip Hop. Professional Radio Dj’s, College Dj’s, and Mixtape DJ’s. Mixtapes are technically illegal and everyone knows this. But it’s also the main way people on the streets get exposed to new Hip Hop artist. There would be no 50 Cent without mixtapes and he admits it, thats why he still puts them out. Now the catch is that the labels go through a third party to distribute the music to the mixtape dj’s. But I know they know about it because A&R’s when they come to town will ask the local mixtape dj’s did they get their product. So they give away their music for free for promotion on the mixtapes but then they will send the RIAA to bust the people distributing the mixtapes!!! You gave it to them to distribute but now you want to bust them for distributing it? That is just plain dirty. I’m not even going to get into the pay scale for 90% of their artist. I would be here all day.
The record companies instead of finding solutions to problems they come in with the hammer and then are surprised that there is a negative reaction. unfortunately artist become involved in the cross fire with the customers vs the industry. When people download music they don’t feel like they are stealing from the artist, they feel like they are not given the industry their money. I am not defending that and its wrong. But the industry made the people their enemy. And they don’t treat the people inside the industry any better.
i heard a rumor that kaplan rolls with a pirated copy of MS Office.
i think he’s onto something though. the govt should give each record label $10 every year to keep on cranking out that valuable, society-enriching goodness. i mean think of all the positive effects of unleashing britney spears’s music onto society. it’s been uphill ever since! thanks guys!! i’d hate to see that go away. you really deserve a huge pat on the back, record labels..err i mean “art sponsorship corporations who do it for the art and not the profit.”
Crystal– #19 is much better than your other comments. It’s fine if we treat it like bottled water: If you want the music in plastic, you can choose to pay for it.
The tax idea is deeply wrong.
If there were a music tax, then there will be a movie tax, and a TV tax, and newspaper tax, and a blog tax, and who knows what other tax another industry might want to come up in the internet.
“its art, its art!” but what about the rest of the arts? do visual, performance, and other artistic areas require such intervention and special treatment? no, unless you count grants and other public funding taken out from common taxes, in which other areas of music outside of the marketed genres are funded. what makes music special enough to warrant such favored treatment?
methinks the industry has hit the inevitable crux: the finale of the pillage of music for the profit of the few.
I know I went a little off topic but the point is these people are bad business men and they want us to pay for it. My party allegiance would switch in a heartbeat if I had to pay an internet tax for music.
Thank you, Mike. As people point out, the marginal cost and the replacement cost is very low. That’s just the way music works.
The artists happen to be good at making something that is easily reproducible. Each copy is as good as the original. Either they need to move into another medium or come up with a product that isn’t so reproducible. Or….
I was reading about the new memory technology that is described as useful for holding 500,000 songs on an iPod-type device and it got me thinking…. Is there room for some higher fidelity version of music? Or maybe bundle in short videos. What can the music industry do to make the existing product obsolete? How can they get us to want to rebuy it?
As anyone who knows about the ravages of Socialism/Liberalism, the idea of a tax to support music is an awful idea.
This will not REPLACE anything. They will still have mega venue concerts. They will still sell CD’s. They will still sell music on the internet thru every avenue available. You are going to let them to continue to sell from all these other venues and guarantee them a revenue stream twice the value of the industry as it stands now? A industry that can continue to NOT listen to it’s consumers by not adjusting the price of a CD. I have said before adjust the price of the CD and they will recapture customers.
Michel, it would be simple: we could just tax everything and have the government allocate money to everyone based on the relative values of their industries. They could have a central planning committee that allocates resources and other party members could carry out the instructions. Then, they could make 5-year plans for the economy. Why has no one thought of this before Ethan Kaplan?
…
A spectre is haunting the Internets–the spectre of Kaplanism. All the powers of old Web have entered into a holly alliance to exorcise this spectre: Blogger and Google, Twitterer and MySpacer, the EFF radicals and the Facebook police-spies.
(BTW: Why does the US nowadays produce more great msuic than Europe with its subsidies? Why is the US the center of other art worlds as well? I highly recommend the economist Cowen’s book, _In Praise of Commercial Culture_)
@wyly, #8
I am in agreement with this, “There are many digital music models in place right now that would work if the record labels would stop licensing based on units and go to a % of revenue model. Even then, P2P has to be stopped. It’s fucking illegal.” The rest of your comment doesn’t work too well for me.
See I am kind of in the middle. I’d like to still see people make music and I’d like for there to be an incentive for them to do so. I think that a percentage of income works well, as long as it is a common system that everyone knows. For example, a flat 10% of the income that a site makes goes to the labels.
Using a percentage based system would allow for there to be free music for consumers supported by advertising on the sites. People get what they want – free music – and the labels don’t go under because they are still getting income. It would be a big drop in revenue at first, but I think that it would easily surpass their existing revenue over time.
I am against P2P too. Even without the whole music industry issue, P2P also lets people get any application you can think of, regardless of the price and do so for free (an issue by itself). And the really big issue, is that most of those applications have viruses and other malware in them making the internet more dangerous for everyone. They need to ban it, or at least scan every file on the network before it is distributed.
Music can be free and the artists and labels can still make money. Everyone just needs to understand that without the chicken, there is no egg. We can not have entirely free music, ever. We all need to shift our thoughts on this subject a little though before there can be a workable solution for the artists, consumers and labels.
van goh = britney’s latest song!!
what a joke!
I’ll often times run into music execs at parties and the thing that always strikes me is how ignorant they STILL are about the world of technology. I never understood why until now.
If this guy is what passes for a VP of Technology at Warner it’s no wonder they’re in so much trouble.
This post was essentially a bunch of $10 words being used to hide the fact that there was no actual thought behind them. Mr. Kaplan says “the concept of art is fundamental to our identity as humans” as if there’s anyone who disagrees with that statement. Where exactly is the group of people in favor of the abolishment of all art and music? I’ve never met them.
The truth is the value of art in society has nothing to do with the music industry’s woes. The music industry, in large part thanks to people like Mr. Kaplan, just can’t seem to create a compelling product at a reasonable price. There are tons of ways to make money on digital music and the fact that the record industry can’t seem to find them is simply a result of bad management.
The issue here is business strategy not the value of art and all the flowery speeches in the world aren’t going to change that.
In fact, the true irony here is that even in the “wonderful lands of Europe and Canada” don’t subsidize record labels because they know there’s still money to be made if the companies were just a little smarter. I really do hate to attack people but Mr. Kaplan is everything that is wrong with the music industry and keeping people like him on the payroll is exactly why the industry is in so much trouble today.
Michael speaks the obvious on this one. The music industry simply appears to be looking for a government sanctioned subsidy while they still have the millions to influence the government. What’s worse, is that I fear they’ll succeed, especially after watching last night Bill Moyers Journal episode on the Farm Bill that’s about to pass in congress (http://www.pbs....8/profile2.html). Watch that and you’ll understand.
@joel Why do you want to ban P2P. It’s easy enough to get caught with P2P so there’s no need to ban it. To stop people from stealing at a record store they hire security. If you find a person distributing a file you go after them just like in real life. Yes it is easier to distribute illegal files online but it’s also easier to get caught. For most people anyway. There are definitely ways around getting caught but most people don’t know enough about networks to stop from getting caught.
“So far, so good.”
You’re giving ‘em way too much leeway.
Back up at least one step.
Just because something is valuable doesn’t automatically mean anyone has to make a living doing it.
@#20 (Bob) said…
“If there were a music tax, shouldn’t it go directly to the musicians anyway? Cut out the record companies.”
Well yes, but the record companies do exist for a reason which is to administrate all the stuff that artists don’t want to deal with like payroll, concert booking, etc… So a music tax might get rid of the record labels but it would only serve to put the function they currently perform into the hands of the only people less qualified than they are, namely government employees.
“I have friends in europe that are able to make a living as an artist”… wow… I have heard this crap before and that is why I dropped out of art school… in fact, any group that professes it is of the majority but in fact is a minority is suspect, and when they start spouting populist garbage like that, I need to put my rain boots on ( because its easier to hose off the bullcrap, duh). If you have a problem with P2P, don’t participate, BUT DON’T YOU DARE TELL ME WHAT TO DO WITH MY PROPERTY.
Here is an idea:
The music industry should have a group like the IRS to “enforce” the laws. That would be better than anything George Orwell could have imagined. In fact, that sounds like a Philip K. Dick novel.
“Why does the US nowadays produce more great msuic than Europe with its subsidies?” so true
the value of art can’t be said directly, as all the other values too. With what are you comparing one piece of art with the other to get a relative value?
Crystal – what is wrong with the model of recorded music as marketing for live performance? What about the deal Jay-Z signed with Live Nation? What about social discovery of music via MySpace (hey, aren’t they starting their own label)? What about online advertising supported models like Pandora? How about not treating your customers as criminals because they realized your business model was broken before you did?
I’m afraid that with your actions, record labels have lost a lot of credibility in this discussion — at least with students like myself.
Here’s an idea:
Let the people download the music for free. This version would be non-commercial flavor of Creative Commons. Let us pay for a commerial license of that same song to put online in our media content (i.e. youtube video). We’ll even give a percentage of revenue from advertising to you. Let us buy the vocal, guitar, drum, bass, etc… tracks and remix the song…..we’ll even promote our remix and sell it….you’ll get a precentage of those royalties too.
Give the consumers some choices, not a lawsuit.
Yea.. bs.
I make my living from web development – so if someone tomorrow releases a ‘do it yourself’ kit that makes my services irrelevant I should propose to have government tax everyone and hand the $ to me since I can claim that my services as an artist have value to community at large? Yeah, right!
If we start to take this stance where does it end? Times (and technologies) change and industry must change with it. It is unfortunate that business models become outdated and unworkable during times of change but that’s ‘just how the world works’ – the music industry needs to wake up and smell the coffee – if they can’t change their model (without alienating/taxing their consumers) then thats their problem. Music as an art form will continue and flourish with or without the big labels and most likely in favour of the artist (at last)!
government subsidies are evil, period.
@taulpaul
Here’s an idea:
Why don’t you pay me a reasonable up front fee for that commercial license and I’ll let you keep all the advertising revenue. Deal?
Oh, that’s right. You don’t have any money but you want me to give you my creation for free with the hope that you’ll be able to sell enough advertising to make it worth my while.
I call BS.
I would like to nominate myself to head the Government Agency that will control how funds are distributed to artists. I would also like to chair the debate that will undoubtedly occur when there is a backlash against the millions in American Citizen taxpayer dollars that will be going to Britney Spears………..
Currently listening to Lather by Frank Zappa, a 4 record album (yes, 8 sides) that was delivered to Warner Brothers and which Warner Brothers refused to pay for…. Frank then played the entire album over the radio for free and encourage listeners to record it and play it often……
If the European or Canadian system of supporting art “for art’s sake” via a nation-wide grant system is so wonderful… then let’s do it.
But that’s a completely different system, with a completely different set of goals and objectives, and it’s NOT a nation-wide music tax collected and dropped straight into the music industries lap.
@rupaul
obviously the ad revenue model incentive is beyond you. I’m so glad the newspaper industry is making the music industry look like a bunch of dry old coots. Who woulda thought?
A Music Tax is not such a bad idea but it needs to be framed as part of a greater context. How much do you value travel, for instance. Well airline companies are in pretty bad shape these days. So a Music Tax should inscribe itself within a “support all that is defunct” program which would most likely include coal mining, steel working, the US auto industry, etc. The debate would of course move towards art vs. commodities and which is worth preserving more.
It is important to remember that so few people make a difference with each generation. So the ones who don’t should live a life of servitude for the benefits of those who do. There is only one Brittney Spears, but an endless supply of taxpayers who are emminently replacable.