April 12, 2008

Sorry, I’m Not Buying This New Touchy-Feely Approach To The Music Tax

Michael Arrington

132 comments »

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.

  • Sphere It

Trackbacks/Pings (Trackback URL)

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  7. adventureran warped » Contrary views make for excellent debate

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  1. Enric

    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.

  2. Dave Johnston

    Dude, Mike…Canada does it.

    Don’t you know how awesome Canada is?

    I’m going to move there any minute.

    :)

  3. sd

    agree. btw Michael, do you ever take vacations?

  4. James

    Hooray horrible self-serving ideas!

  5. DjBigDaddy

    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.

  6. Morgan Warstler

    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.

  7. Crystal Williams

    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.

  8. wyly

    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.

  9. cc

    @3. The real Michael is always on vacation. The posts you read from him are written by his army of clones.

  10. Crystal Williams

    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.

  11. Robert Seidman

    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! ;)

  12. Michael Arrington

    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.

  13. Michael Arrington

    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.

  14. Charlie Prince

    “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.

  15. Jackie Danicki

    There’s nothing touchy-feely about stealing from people to bankroll your choices in life. Thieving scum.

  16. Q dub

    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?)

  17. taulpaul

    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.

  18. Duncan Golightly

    “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.

  19. Crystal Williams

    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. :)

  20. Bob

    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.)

  21. Ryan

    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!

  22. DjBigDaddy

    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.

  23. gilltots

    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.”

  24. Bob

    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.

  25. Michel

    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.

  26. halvfet

    “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.

  27. DjBigDaddy

    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.

  28. Alz

    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.

  29. adam

    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.

  30. Bob

    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_)

  31. Joel Strellner

    @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.

  32. Jose Fajardo

    van goh = britney’s latest song!!

    what a joke!

  33. Tom

    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.

  34. Jim McCusker

    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.org/moyers/journal/04112008/profile2.html). Watch that and you’ll understand.

  35. DjBigDaddy

    @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.

  36. Mike Linksvayer

    “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.

  37. Tom

    @#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.

  38. steve billy

    “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.

  39. Coleman Foley

    “Why does the US nowadays produce more great msuic than Europe with its subsidies?” so true

  40. sikantis

    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?

  41. Jacob

    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.

  42. taulpaul

    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.

  43. 113.com

    Yea.. bs.

  44. chris

    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)!

  45. PAStheLoD

    government subsidies are evil, period.

  46. rupaul

    @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.

  47. Trace

    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……

  48. Michael Long

    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.

  49. taulpaul

    @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?

  50. philsco

    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.

  51. Brad

    What a pathetic attempt from a delusional and self-important industry. I guess they really must be out of ideas for how to save their industry. The problem with the music business is the business part. People have been making music for thousands of years and will continue to do so even without labels to buy them hookers and cocaine. If the system completely breaks down and the next MC Hammer or Britney Spears gets lost in the shuffle, I guess that will just be society’s loss.

  52. scratchiti

    I agree with the underlying idea that we as a society do need to find a way to value art. But I don’t see why we as a society need to value major labels.

  53. NIN

    Let’s see what Trent Reznor of NIN accomplishes with his great big experiment. It sounds like the Web 2.0 for the music industry! User generated remixes and what not. Open source music!

  54. Igor The Troll

    Ha, ha! Michael, the usual Troll bashing and flaming the weak and the innocent! Come on boys and girls stop crying foul…you know the game, competition rules! Everyone complaining about TechCrunch Mike said this and that, well he is a Troll, let him say what he wants and stop feeding the troll or the troll will eat you alive..:) Right Michael?

  55. AnonTroll

    Isn’t copyright in the constitution of the united states? Let’s just throw that piece of shit out.

  56. Michael Arrington

    “I agree with the underlying idea that we as a society do need to find a way to value art. But I don’t see why we as a society need to value major labels.”

    Best comment ever. - #52

  57. Brian Carter

    Can’t imagine what it would be like if US supported art like other countries do- I probably wouldn’t be in search marketing. ‘Course, could be worse- lots of things we have in US better than other places.

  58. Bruce Warila

    You heard this statement before… In a competitive market, where products can be easily COPIED, prices get pushed down to marginal cost; thus practically eliminating the ability to generate a profit; therefore the solution is to create products or features that can’t be simply REPLICATED.

    And then the music industry said… In a competitive market, where products can be easily COPIED, prices get pushed down to marginal cost; thus practically eliminating the ability to generate a profit; therefore the solution is to stop people from REPLICATING our products.

    But, someone put the wrong statement in the play book. It should have read… In a competitive market, where products can be easily SUBSTITUTED, prices get pushed down to marginal cost; thus practically eliminating the ability to generate a profit; therefore the solution is… (still working on the solution).

    Common sense says - rule out this option… In a competitive market, where products can be easily SUBSTITUTED, prices get pushed down to marginal cost; thus practically eliminating the ability to generate a profit; therefore the solution is to stop people (generally) from SUBSTITUTING our products.

    Substitution is a bigger problem than replication/sharing. At this point in time, given the adoption of MP3 players (including cell phones), broadband Internet, Internet everywhere, video game consoles and the pending media recommendation tsunami - substitution of one song instead of another is a far bigger challenge than replication.

  59. fernando

    Recording companies are gasping for air. So are their formulaic artists.

  60. Art

    I take anything that ethank says, types, or blogs as BS. He’s an overly obsessed R.E.M. fan that wouldn’t know what art was if it his him square in his spoiled Jewish face! He probably wrote this after listening to his new Accelerate CD for the 115th time!

  61. James B.

    Interestingly enough, in Canada, several high profile artists (Fiest, Broken Social Scene, Billy Talent, Avril Lavigne, Sloan) have disassociated themselves from the music labels and created their own coalition - Canadian Music Creators Coalition (http://www.musiccreators.ca/wp/).

    I really like the quote on their homepage:

    “We are a growing coalition of Canadian music creators who share the common goal of having our voices heard about the laws and policies that affect our livelihoods. We are the people who actually create Canadian music. Without us, there would be no music for copyright laws to protect.

    Until now, a group of multinational record labels has done most of the talking about what Canadian artists need out of copyright. Record companies and music publishers are not our enemies, but let’s be clear: lobbyists for major labels are looking out for their shareholders, and seldom speak for Canadian artists. Legislative proposals that would facilitate lawsuits against our fans or increase the labels’ control over the enjoyment of music are made not in our names, but on behalf of the labels’ foreign parent companies.”

  62. Pat

    Ha seriously. We have bigger issues in this country that need government support than musicians losing revenue to P2P sharing. I realize the plight of some musicians in this situation. I was smoking a doobie with a relatively small band (which posts its live shows on archive.org) and they suggested that if people really like a band, they should spend a couple hundred dollars on that band a year (on concert tickets, albums, tshirts, etc.).

    I fully agreed with the guy. Though baked, I realized that I don’t mind spending money on a band that I really like. There is just no way that I’m going to spend $15 on a Metallica album.

  63. Jimmy Dell

    The only government support of the music industry that I want is the government vigorously and ruthlessly enforcing copyright law. Taxation equals legalization and I’m not for that at all.

  64. Cyan

    We’re working with indy artists who have abandoned the old music distribution model. They use sites like MySpace and YouTube as a way of getting their music out to the public. Many of these artists create their work under a creative commons license which fosters immense loyalty with their fans, because they can turn around and create music videos and remixes with the songs. Some artists like to exert more control over their art and this model doesn’t work for them, but I’m finding that more and more bands are moving to this model.

    MC Chris is a great example of this.

    http://www.youtube.com/results.....arch_type=

    My favorite video ever: http://www.youtube.com/watch?v=QRhnw1gFuDA

    Now, he’s no Radiohead or NIN, but through his *own* promotion, he’s now part of the Warp tour and his fan base grows every day. He makes most of his income through merchandise and live performances. I believe you can’t even buy MC Chris gear without going to one of his concerts.

    In my opinion, the old model dying out is going to pave the way for a richer and more varied musical experience for all of us.

    I do know that getting the government involved and imposing taxes is just absurd. It is a slippery slope and it chips away at our freedom. Why should businesses receive government subsidies for making bad business decisions?

    There will be plenty of awesome new disruptive business models that will emerge and we should reward them with our business.

  65. DevlinD

    Do government subsidies and taxes really create any value?? If people are willing to place value on art they will pay for it. How do subsidies to artists and such really differ from government bailouts to failing industries and companies?

    Art may be crucial to culture, but does it really matter if the culture does not appreciate it enough to support it? Does a painting really matter if nobody sees it, or a poem if nobody hears it?

    I have no doubt that art has value, and certainly provides value for those that enjoy it. I just find it hard to believe that in a time when companies like Wikapedia can provde a top notch service based strictly off donations that an organized artist movement could not produce something of similar value and stop relying on government handouts as their main source of revenue.

  66. rupaul

    @taulpaul

    Sorry, but I’ve been involved in enough “revenue sharing” deals in my day to know that 90% of the people who want them can’t deliver with them.

    They look good on paper but then you find out that the partner can’t sell inventory, gets crap rates, etc. etc.

    So the easy solution is to find out who is serious by asking for some money up front. The people who are confident they can deliver never have a problem putting a reasonable amount of money on the table up front.

    Money talks, BS walks.

  67. darkuncle

    It’s interesting to see people arguing in all seriousness for mandated ISP-level content filtering. Those of you who have suggested (or demanded) this, by all means, elaborate on how this would work. Keep in mind that any suggestion that is defeated by encryption (protocol, transport or content-level), requires watermarking, or won’t work without the global cooperation of all ISPs is a non-starter. Bonus points for figuring out who’s going to pay for this (and why) - ISPs? ISPs are common carriers; by law and design they are NOT responsible for what passes over their pipes any more than Ma Bell is responsible if you use the telephone to call in a bomb threat to your school or office. The government? Why should public funds from taxpayers be requisitioned to prop up an archaic business model? What about the vast majority of taxpayers who don’t download music illegally? Oh, and if we’re going to do this for music, we’d better be prepared to prop up Hollywood as well, and newspapers, and bloggers, and …

    Suggestions that filtering (impossible to do effectively enough to be worth it; just ask netizens in China whether or not the Great Firewall is more like the Great Sieve) will solve the problem are technically ignorant and socially naieve. This is a social problem (and arguably, a business problem) - it requires a solution concomitant with the problem. Legislative (cure is worse than the disease; have you _seen_ what our legislators come up with? Can you say “loopholes”, “unintended side effects” and “chilling effects”? I knew you could) and technical solutions completely miss the issue; it’s an attempt to swat a fly with a wrecking ball.

  68. Tony C. Hall

    I posted my thoughts on Ethan Kaplan’s post and the TechCrunch reply here http://simplelifetech.com/news/?p=5

  69. darkuncle

    following up to myself with the URL I intended to include, and forgot:
    http://darkuncle.net/humor/you....._sucks.txt

    whether it’s p2p or spam that you’re intending to filter, the errors in reasoning tend to be the same.

  70. Jeff Stuckey

    Speaking as a professional fine artist I believe Kaplan is fundamentally missing the point and has either by intent or ignorance relegated himself to being nothing but a mouth piece for his bossed. Like so many who are themselves not creative artist he completely misunderstands the process of and intent behind the creative process and instead relegates its value and intent to be nothing but financial and the protection of IP. If labels were artist he might be right but since people are artist he sadly fails to understand that art simply exist, with money, without money and in spite of money. The artist exist to convey the experience to their patron. They will create be cause their existence demands they create. The product for sell is not the song, the painting or the performance. It is the person. His frustration, his bosses frustration that is, is that they cannot package the artist and sell them. The internet and the new media distribution that it has spawned allows the artist direct access to the patron without the need for the racketeering of middle men seeking to profit from the gifts of others. the tragedy he so elegantly bemoans is not the song of sorrow for the artist but the wails of agony from their exploiters.

    -Jeff Stuckey-

  71. Frosty

    I’m a bit late to the discussion, but anyway I just blogged up a counter-proposal: the Idea Tax.

    http://biztos.blogspot.com/200.....a-tax.html

    Disclaimer: I used to work in the music business, so I may be even more spiteful of their lack of creativity than the casual observer.

  72. EVILmonkey

    The only thing I know for sure is that I can get any song I want for FREE now but I choose to buy LP’s regularly because I make a lot of money. Teenagers and 20-somethings don’t make shit the last time I checked. .99 is lot a money for a song when your diet consists of ramen noodles or your income comes from mommy.

    Face it music label morons, your biz model has been completely disrupted and that’s not a bad thing. Maybe now I won’t have to pass over the no-talent hacks like Britney Spears and the fossils from the 60’s who believe they still have relevance on my way to the good stuff because it won’t be profitable to market and distribute garbage anymore.

    Besides, does anyone even listen to COMMERCIAL radio anymore?

  73. violinist

    I glanced through the list of Warner Bros. Record’s artists in Wikipedia: Cher, Eric Clapton, Don Henley, Faith Hill, then when I got to “M”, as in “Madonna”, I knew why Mr. Kaplan is being melancholy these day — Madonna is leaving the label in 2009 to join LiveNation, which specializes live performances.

    Ain’t Madonna one smart cookie? She and the rest of us got the clue, which Mr. Arrington has articulated in many posts before — live performances are where the real dough is.

    Madonna is turning 50 this year and Mick Jagger is 64 now, yet I bet they work harder than many of the so-called “musicians”. They got the clue, they are awash with concert money, and they deserve it.

    Yeah, talk to Madonna and Mick Jagger about “Music Tax”, I’m sure they’ll get a kick out of it.

  74. Davis Seal

    The labels should just create a foundation for people to sponsor the artists like they have for needy children. Then they wouldn’t need to sell the music: You can help save a artists from P2P. Only costs $22 a month but means the world to a needy artist. As a sponsor, you’ll receive regular updates on your artist, including enhanced personalized digital downloads, photos, and concert reports. You’ll be able to watch your artist grow and flourish, knowing you are helping make it all possible.

  75. Steve

    I wasn’t gonna post, I agree with the post made by a few poster that actually know the industry, to the other ones I want to say that music industry is not like the computer geek industry, so don’t write if you don’t know how the music industry works.

    And at #52, that pretty much wraps it up

    “I agree with the underlying idea that we as a society do need to find a way to value art. But I don’t see why we as a society need to value major labels.”

  76. Nicole Simon

    Wanna play the “save the ” … card? How about saving every living being on the planet first from hunger. That beats the “art is necessary” by any length.

    And I’d like to know about those “programs in Europe” he is talking about, because that is bullshit in itself.

    Should art (not just music) be supported? Yes. But the times change as do the needs, meaning that old models of support do not work in this new world either.

  77. Gubatron

    to wyly, in what year are you? the cost of distributing music is nearly zero, specially thanks to technologies like p2p.

    The only valuable thing record labels do, is invest shitload of money in marketing artists. As for making music, it just costs you guys having instruments, recording equipment, inspiration and time. If you’re a musician you’d probably be recording wheter you’re gonna sell a copy or not, because you love making music right? just the way hackers can spend hours and hours coding a killer app just because they love it, the costs are really personal.

    Some people are smart enough to adapt to chance and create different business models, the music industry will have to adapt, or die.

  78. Gubatron

    s/chance/change

  79. Joel Strellner

    @DjBigDaddy It’s also easy enough to catch drug dealers, but they’ve banned that. Still to this day though, just because it is banned doesn’t mean it’ll stop it entirely, but it will make it harder.

    There are legitimate uses for P2P, many of which we still haven’t seen. But for the everyday file sharer, most if not all P2P traffic is music and warez applications. It does not do any good and only helps to accelerate the stealing.

    As I said earlier, ban P2P and switch the music industry to a percentage of revenue based system for digital files. Then let the bands charge whatever they want for live shows and merchandise.

  80. chris

    @#74 Steve: the music industry IS exactly the same as the computer geek industry in that it is equally as simple to DOWNLOAD an .mp3 as it is a game/image/movie (legally or illegally). The whole reason the music industry is screwed is because they failed to acknowledge this back in the ’90’s and adjust their business practices when they had the opportunity. Now it’s too late.

  81. Jon Bon

    When will music executives get over crying about their lost fortunes? Its so sad and I am sick of hearing about… “results not excuses.”

  82. Anonymous

    Trent Reznor and his have it your way experiment is very interesting. He knows the value in understanding how people consume music. He is differentiating. Still making it available free but in tiered varying quality and packaged versions. This excites me.

    Bands need to stop thinking that bam you get a record deal and then everything is smooth sailing from there.

    The tools are out there on the intermet for bands to manage themselves. For the right band who knows how to use the web technology that is out there they can do most everything a label can do for them. From sync licensing which is the first thing a band should get into in this market, to digital distro, to radio campaigns, booking, press, tour management, endorsements, mobile, street teams, photographers, video directors, radio teams, video placement. You name it there is a tool out there for a band to use to accomplish all of this. I am launching a site that will be dedicated to just that. Teaching bands how to market themselves and informing them of the technology and methods of getting it done.

    I spend a lot of time reading broad macro discussions about smm and I am ready to collaborate with those I have a repertoire with in the industry already and share some thoughts and knowledge. A band should not sign with a label until they are to the point where they can no longer handle it on their own. When it gets to the point where you’ve hit a critical mass and a real demand is there for the band nationally then get a label and get out on national tours, otherwise a band should build their base one market at a time and nail it.

    Another thing to bands: Don’t shop yourself until you hit that critical mass. These days labels most likely are not going to look twice at you unless you have something happening. They need to have endorsements going on, sponsorship, have lots of page views and plays, and again SYNC LICENSING. TV is the new radio. Get that song in a commercial at 3k a clip 3 months before you mail a single to college radio stations in the markets you music is being used. Screw splitting 70 cents on a ring tone. Go to a video gaming conference and get your tracks in the developers hands.

    My whole point is that unless you are at a point as a band that you can afford to pay back the label all the money they are going to spend on you, don’t go to a label yet. Get to a point where you are writing your bands own check and then get a label to administrate for you and sub out a radio, press, video, smm, booking etc team.

    And BTW I find no new music on the radio. I hear new music on sites like thesixtyone.com, through applications like the iLike music challenge, and reverbnation who digs it application, imeem etc. Bands need not worry about budgets for large print and radio campaigns if they do it right using social media and truly create trust, loyalty and community along with talent they are off to a good start. I plan on seeking out and highlighting bands that I think are ‘doing it right’.

    Anyway… I’ll be checking this post out.

    Signed,

    Soon to be transparent

  83. Crystal Williams

    If producing viable, profitable albums truly cost next to nothing, then why wouldn’t every band on MySpace have an album out already? And why would any band ever WANT to be on a label?

    And yet.. bands DO still want to be signed. There are costs other than the recording and mixing and replication. Promotion and distribution require money. Also, by the numbers, most albums fail.

    Record Labels are the VCs of the music industry. They take chances, they invest in bands, they advise them and promote them and help them succeed. And most bands still want that - not all - but most. Other models are emerging, but they’re not 100% yet. Please present examples of recent artists who have become popular without a label, being featured in an ad or soundtrack, or being on tv. Investment is still necessary.

    As for touring being where the money is… For established artists in arena shows with $80 tickets… Sure! But again, for new bands, touring is often a break-even at best proposition.

    I am still interested in how copying and trading copyrighted work is considered socially OK, whereas we would still expect a parent to scold their child for stealing a $.99 pack of gum. It’s as if the convenience makes it not illegal. In other industries, if a consumer can’t afford a good, then they don’t get to buy it. There is no argument. EVERYTHING we buy costs less to produce than we pay for it. Somehow this is ok for socks, soda, cars, and computers, - even paintings… but when it gets to music and other digital goods, we see things differently.

    This is not a plea for sympathy for the labels - or even the artists, simply a discussion. If we’re not willing to pay for physical cds (because we don’t want the clutter), or for digital downloads (because we can get it for free), or a concert (because we don’t like the venue - or the ticket was too much - or it wasn’t convenient) - then exactly why are people expected to keep making music? (especially GREAT music - which is usually the kind that doesn’t get played on those top 40s or sell out the arenas)

    Some of us are geeks (like you) and music lovers (like you) who are trying to find that answer.

  84. Bob

    Crystal,

    I don’t support violating copyright (which is slightly different than stealing though also illegal). I spend more buying non-DRMed music from Amazon/Amie St/MySpace’s SNOCAP thing than I would on a proposed music tax. I just think that a music tax is immoral.

    I know different people here are saying different things, but the vast majority aren’t advocating violating copyright, they’re just against getting the government to take money from people involuntarily. That’s what (I think) we’re debating and most of the rest is a red herring–if the government creates a tax to distribute socks, sodas, and paintings, I’d have a similar objection.

  85. zpok

    Message to Kaplan: Please, please, please keep the European tax, welfare and social models out of this. We are quite happy with them AND still think you are full of it. Subsidizing art is not an economic model for keeping labels alive. It is adding a trickle of revenue to valued artists who do stuff that’s not too commercial. It is keeping venues for appreciating art open. It is highly controversial, since art is not quantifiable - and not because big governments are bad and open markets are holy you bastards. But most people who actually go to theatre, alternative music, cabaret, art exposé’s about once a year are quite happy to contribute, so that they can come back next year.

  86. violinist

    @Crystal Williams,

    I clicked on the link to your web site, “Clever, Clever, Girl dot com”, and read your bio. Some interesting snippets:

    “Crystal Williams is a producer, designer, writer, technologist, open source cheerleader, community activist…She is currently the Director of Technology Projects for Warner Bros. Records in Burbank, California…”

    So, you are here to defend your boss and your company. I applaud you for that.

    “Crystal holds a dual B.A. in Economics and Media Studies from Scripps College in Claremont, California. Her thesis, “When Piracy is Good for Software Companies - And How Versioning Became Better” was a game theory analysis of pricing and copy protection strategies in the consumer software market…”

    Despite the ironic title, your thesis might hold the answer — “versioning”, as in, the musicians can learn a lesson from software producers by periodically issuing new and improved versions of their songs, which the fans can look forward to buying or attending their concerts for.

  87. Adam Gershenbaum

    @Crystal Williams see my response regarding shrink http://blackrimglasses.com/arc.....ent-190792

    The same people stealing music are the ones complaining that there is no good music out there. At the same time they are getting the GREAT artists dropped from their labels.

    Aside from that musicians should first be making music for the art of making music so if people are ripping them off and that stops them from making music I don’t vall that person an artist or a musician.

    Dispatch is a perfect example of a band who did it without a label. Boy Hits Car does ok for themselves.

    Labels shoudl spend less money on traditional media and artists should invest more time using social media to advertise for them in a more cost effective way. So an album that might be considered a failure will be considered a succcess because the label spent less on marketing then sales were and a profit is made.

    Bands want to get signed still bc there is still this notion that it;s like finding the golden ticket. Thsoe days are long gone.

    And yeah I think that we don’t walk into an art gallery and just yank a painting off the wall do we? We don’t just buy a book and scan every page and distribute the pdf do we? If we as people love good music and want an artist to stick around in a main stream way, we need to pay at least something.

    Artists need to band together more and share what is working for them and what is not and stop looking out for number one. They should help each other succeed and form stronger alliances. That will get more tour sponsorship, endorsements, etc.

    I’ve seen bands like Filter and the Family values profile starting to develop link exchange prgrams trading myspace bulletins with one another. You post a bulletin for me, I post a bulletin for you. This is a good start.

  88. MA

    I love your weekly rants and attacks on these dinosaurs who have long enjoyed the merits of capitalism while they have fXXXed over many a true artist. It is them that has been the cause of the shitty music that largely makes it into the ‘charts’. Fxxx them now the market has changed favor to another, you cant fix the rules to suit you just because your loosing.

  89. Henry S. Tokstolle

    Kaplans text is just as much as much bullshit as Arringtons “web2.0 uber alles” rants.

    In fact market forces has already started to solve all this without any of these morons and their dated marketing ideas and fantasies how the music market works.

    At least for more artsy music I am seeing more and more signed & numbered limited editions. Often on vinyl. At high prices for sure - but this *is* a part of the market that values music. There is even a new french label that will produce just one vinyl record of a piece and auction it (all masters destroyed).

    More or less like paintings. It gives some hope at least.

  90. jonhow

    Thanks for this article.

    I do believe that the music industry is cancer for our society and that they self have constendly destroyed the value of music. Take the term music industry as an example. Why do we call it an industry anyway? Is the term industry a term of art? No, I dont believe so? What a value do those drug adicts (music industrial workers) like amy winehouse bring to society?

    The only reason why they can sell the industrial produced crap to the world is that music is like a legal drug. It produces emotions in a way only drugs could do. And out there are to many music adicted teens that give theire money to this industry so amy winehouse can afford the next shut.