Time to Organize Recording Artists: Why an Enforcement-based Strategy is a Mistake for the Music Industry

Celia Hirschman from KCRW’s On the Beat

In the most recent On the Beat, Celia Hirschman advocates for the Musician’s Union to take a more active stand for musicians’ rights online. In a world where only 42% of internet users say they pay for music, she argues, the Union has a responsibility to advocate for musicians’ “right to be paid for their efforts anytime their music is played”. She notes the failure of legislative attempts to extract revenue for musicians from peer-to-peer file sharing, mp3 blogs, and CD burning and lays the blame at the feet of the Union as the primary organization that represents musicians.

I agree with half of this argument. The Musician’s Union has been embarrassingly lax in fighting the real battles that matter for artists in the modern music distribution landscape. What has the Musician’s Union done to stop the labels from cheating artists out of revenue from iTunes downloads? How about to stop them wasting their shrinking budgets on glamorous perks and inflated short-run corporate profits rather than developing new artists with the possibility of long and successful careers? Or what about to force them to hire people who can figure out new business models that fit the new technology?

None of these battles receive the slightest mention in Hirscman’s critique of the Union. She ignores the losses artists have suffered by being forced into vastly inequitable relationships with labels and instead highlights the ways in which the industry has failed to fully extract revenue from new forms of music consumption and fandom.

This wrong-headed focus on enforcement over transformation is symptomatic of the problems plaguing the record industry as a whole. Hirschman’s catalogue of Union failings closely resembles a punchlist of RIAA complaints and talking points. Focusing on missed revenue from new forms of fandom while the music industry’s entire distribution and profit model sinks into irrelevance is like getting upset over a spilled glass of champagne on the deck of the Titanic.

This mistake derives directly from the principle that Hirschman articulates in the piece: that artists “have the right to be paid for their efforts anytime their music is played.” This same idea was proposed recently by Peter Kirn at Create Digital Music:

Recorded music has value to consumers. And, in business, if something has value somewhere, it’s a business.

This is a core principle of the industry’s thinking right now and it is obviously, palpably false. In middle school, when a friend played me Sebadoh off of a walkman that he’d smuggled to school, transforming me in a single moment into a lifelong fan of indie rock, was that “theft”? Should Sebadoh have gotten paid?
When I worked at a local patisserie I used to play my favorite CDs throughout my shifts and would often write the band names and album titles down for intrigued customers. Should the shop have had to track and regulate everything we played so they could pay royalties to the artists?

This last is something of a trick question since enforcement of this kind of public performance royalty is something for which Hirschman specifically lauds rights-enforcers like ASCAP:

If you walk into a restaurant, nightclub or boutique and hear music playing, chances are very good a performance-rights organization have demanded compensation. These rights societies literally go door-to-door to insure their members get paid for music

Hirschman could not have this issue more wrong. ASCAP contacted the patisserie while I worked there saying they’d observed us playing music controlled by their members and we had to either cut it out, sign up for a very expensive pay service they were offering, or face a lawsuit. The business owners felt like they’d been shaken down by the mafia. Their response was to stop playing ASCAP music altogether and instead to put together a library of local music which we had explicit permission from the artists to play without royalties. Maintaining this library was a lot of work and we rapidly fell back into the old system of playing whatever we wanted, including ASCAP music, without permission, but now in an environment of greater fear and resentment. I would bet that a similar story holds for most places you actually visit beyond corporate chains: if you walk in and hear good music playing it is either local or in explicit defiance of an ASCAP threat.

And this story is a parable of what’s wrong with focusing on enforcement. Enforcement alienates consumers and tastemakers. It tarnishes the reputations of artists and the organizations that should represent them. It forces natural music consumption and sharing patterns underground. Possibly worst, enforcement distracts artists and the industry itself from solving the huge existential issues that they face.

There is one piece of information from Hirschman’s piece, however, that does hold out hope for the music industry if they do ever overcome these distractions and decide to face the real challenge of transformation: 42% of internet users pay for music. That’s an enormous number. How many internet users pay for news? Or search? Or social networks? I don’t hear anyone in these businesses complaining that their industry is in decline. That’s an enormous number and it reflects the incredible amount of passion that exists for music online. If the industry can’t find a way to transform that passion into a functional profitable business, it won’t be because because the users outfoxed their enforcements efforts. They’ll have only themselves to blame.

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0 Responses to Time to Organize Recording Artists: Why an Enforcement-based Strategy is a Mistake for the Music Industry

  1. Mort says:

    Great post – thought provoking as usual. The mafia referene is apropos – heavy handed enforcement of ASCAP pay for play rules is outdated and unwise in the context you described. What about restaurants that play radios? Creative artists have to see the BIG picture, reconcile with techs that spread their work to the world.

  2. Greg says:

    Thanks! Hirschman would probably argue that when you hear a song on the radio artists have, in fact, been reimbursed specifically because of ASCAP/BMI enforcement of public performance royalties. However, I think their focus on the reimbursement misses the larger benefit of radio airplay which is that it drives CD sales — an area of music monetization where the labels tend to get the lion share of the revenue. When viewed in the context of this larger picture, the best way for artists’ representatives to help their clients earn more money from radio (and restaurant) airplay would be to negotiate with the labels for a better deal on music purchases (CD or download) since that’s what makes up the majority of the revenue that is ultimately generated by radio play. From the labels’ point of view, radio is a loss leader for sales — that’s why they have repeatedly gotten in trouble for spending money, as payola, to basically bribe stations into playing their music.
    The whole thing is perfectly symptomatic of the misplaced emphasis on enforcement over transformation I tried to outline in the post. Rather than nitpicking on these small issues in a way that pisses off listeners they should be trying to figure out a way to change the structure of the business altogether so that more the actual large flows of money (new and old) flow to artists.

  3. Tyson says:

    Compensated anytime their music is played? Note to self: start encrypting the playcount on iTunes.
    To make a tortured (and possibly incorrect) metaphor, this whole thing strikes me as enclosure in reverse, with music labels et al trying to keep things legally (and inequitably) parcelized, while new technologies move things towards more openness. I think.
    And one thing about restaurants: this is purely anecdotal, but it seems more and more of them are switching to satellite radio. I’ve heard some good satellite radio stations, but it’s rarely the kind of thing that surprises you or introduces you to new music.

  4. Greg says:

    Tyson — Yeah, enclosure is a good metaphor. It’s like the industry had separated out the fields to keep sheep in them and all of sudden the sheep learned how to fly. But instead of figuring out what flying sheep might be useful for, they’re trying to figure out how to build better flying-sheep proof fences.
    Satellite radio does, of course, pay royalties to artists through ASCAP/BMI, but, like you say, it’s not really a viable medium for new artists to break through or for well-known older ones trying to maintain relevance, i.e. it doesn’t drive taste. From the restaurant’s point of view, it’s also harder to project your own unique quirky style with the (relatively) small number of stations and styles available (compared to the full menu of music you can find online and elsewhere).

  5. supaspoida says:

    Very insightful post.
    All of this shifting of blame from organization to organization is just a last ditch effort to maintain an obsolete business model. As the tools and resources available to artists continue to improve these litigious organizations will be slowly phased out as artists take control of their own music and distribution. This process has already begun and is gaining momentum thanks to artists like Trent Reznor & Radiohead who are testing the waters on a larger scale.
    This is a subject I am passionate about, if you would like to discuss further feel free to drop me an email.

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