Music Industry Rules

Here's a comment I posted today on an article by Matthew over on http://songbytoad.com. The article is about much more than the bits I've picked out to respond to.

http://songbytoad.com/2010/02/owning-information-and-terminating-debate/#comment-41555

I help run an independent label, so I'm writing from that perspective.

We really don't have a problem with bloggers writing and sharing individual tracks on a release, as long as they use the "covermount" track we provide to everyone for free, or get permission from us to use another track. We do have a problem with bloggers posting entire albums and we file complaints against them with their hosting service provider.

We have our own semi-automated system (which I wrote myself) to deal with the actual takedown notices. It's more expensive to do things this way, but using the automatic systems the IFPI and others have developed comes at a cost in terms of the relationship artists and labels have with the fans. I think the industry organisations like the IFPI and its members the BPI and RIAA are far too heavy-handed with fans and people, like bloggers, who have less traditional roles in the music business. Educating people about the difference between what a normal independent artist earns from their music, and what a major-label-manufactured "act" makes seems like the right approach. Let's just say that almost of the artists on our label won't be quitting their day jobs any time soon.

Over the past 15 years, a new generation of music fans has developed in an environment where music is omnipresent and seemingly free. Music is not given the same value that previous generations might have attributed to it, and it is now difficult to explain how those 15 years of "free" were actually paid for by the people who produce music.

Of course there are "bloggers" who produce no original content and share entire releases, often ahead of the official release date. I don't think these bloggers are motivated by any (or much) genuine love of the music. I think their motivation is similar to that of the pirate/cracker BBS community in the computer software world--prestige and bragging rights--but these bloggers can't even claim to be particularly clever since ripping a CD is not even remotely as difficult as overcoming copy protection on software.

Earlier today I was reviewing the statistics from the our web shop and noticed that quite a few people/sites have been linking to our shop release images directly (so-called "hotlinking"). This is an irritant because it means that our bandwidth gets used for things that don't really have anything to do with the shop and that costs us some money if it happens a lot, and worse yet, at least one of the hotlinks was from a blog that is used to distribute illegal downloads.

It's hard to get statistics about how much illegal downloading actually takes place, but since they linked to our image, our server faithfully kept track of how many times someone loaded that image on the blog. In the month of October, that image was downloaded 31,000 times and so far in November, it's at 12,300 hits. That's a lot of hits for one release on a small independent label.

As an aside, I've since taken steps to make sure that hotlinking on our site doesn't work very well. I'm sure they'll be surprised to see the images have changed.

From the point of view of a recording artist or a record label, it appears as though little is being done to address the problem of illegal downloading on the internet. Copyright laws protect the interests of authors and performers, who have the right to choose whether and how their music is sold. The basic case is simple--if an artist chooses to sell their music, then it is an infringement on their copyright and moral rights to take their music without paying for it. Since it is taken without their consent, some people call this "theft".

Here's a question I'd like to open to the world at large. Why are so may retailers selling digital music that has been encoded using lossy formats at inferior bitrates? I have a few theories, and a couple of them may even be true.

It is with great sadness that we are reporting some major changes here at Touch and Go Records. Many of you may not be aware, but for nearly 2 decades, Touch and Go has provided manufacturing and distribution services for a select yet diverse group of other important independent record labels. Titles from these other labels populate the shelves of our warehouse alongside the titles on our own two labels, Touch and Go Records, and Quarterstick Records.

Unfortunately, as much as we love all of these labels, the current state of the economy has reached the point where we can no longer afford to continue this lesser known, yet important part of Touch and Go's operations. Over the years, these labels have become part of our family, and it pains us to see them go. We wish them all the very best and we will be doing everything we can to help make the transition as easy as possible.

Touch and Go will be returning to its roots and focusing solely on being an independent record label. We'll be busy for a few months working closely with the departing labels and scaling our company to an appropriate smaller size after their departure. It is the end of a grand chapter in Touch and Go's history, but we also know that good things can come from new beginnings.

(Corey Rusk, quoted in [1])

If this has happened to Touch & Go, it could happen to almost any independent label. I hope this news isn't a prelude to a rash of other closures. I really feel that mid-size independents have been hit much harder by the changes in the music market that have led to a large overall drop in sales across the industry. The tiny labels have no overheads and few staff, if any, and the majors can live off the fat of the land. But with the mid-sized independents like T&G, there isn't any fat to begin with, and it's incredibly hard to find anywhere to cut. And what does get cut are the vacations, the evenings and weekends at home and any sense of optimism about the future of the music business.

One of things that is interesting about alternative digital distributors (i.e. aggregators) like TuneCore, ReverbNation and CD Baby is the retailers they service. Compared to IODA and The Orchard, they distribute to relatively few digital retailers--ten or fewer instead of the hundreds that the largest distributors service.

Industry rule number four thousand and eighty
Record company people are shady
So kids watch your back
Because I think they smoke crack
I don't doubt it
Look at how they act."

A Tribe Called Quest
"Check The Rhime" from Low End Theory