Tag Archive for 'Digital Rights Management'

Album Sales: A Realistic Perspective

Published on October 15, 2007 in Blog. 0 Comments Tags: , , , , , , , , , , , , , , , , , , , .

In getting a picture of what’s next for the music business, let’s take a moment to look at reality right now. There are a few reports from mid-2007 that CD sales are way down (15% from the first half of last year), while digital sales are up over 48% (If you find any more recent industry sales reports, I invite you to post them as a comment to this post).

CD sales are dropping, set to be a small fraction of overall sales – and sooner, rather than later. A recent survey of high school students showed that there is a downward trend in music downloading in that age group. This is the next generation of music buyers. Perhaps their actions are pointing to something.

The Freakonomics blog posted an editorial recently with analysis of the record industry by five people who ought to know. Koleman Strumpf, an economics professor at the University of Kansas, had this to say:

“If file sharing hurts record sales, then albums that are more heavily downloaded should experience lower sales than comparable albums that are less downloaded. But, after controlling for the role of popularity, we found that downloads had little effect on album sales.” He wrote a whole paper on the subject, if you want to find out more.

In other words, file sharing is not the source of the drop in album sales. A powerful insight like this is the last word on file sharing for me (although not for the RIAA).

Audioholics.com posted a great editorial on whether CDs are approaching the event horizon of obsolescence. They include a buffet of statistics showing that while physical sales are slumping, digital sales are growing with velocity.

As the digital music market overtakes physical sales, CDs will become less available (relegated to major chain stores like Wal-Mart). We can see this shift with the demise of? Tower Records. When people can get all the music they want without going to overpriced record stores, they will. This trend has yet to infect mom and pop record stores, like Orlando’s own Park Avenue CDs, and since most of these stores are seen as boutiques rather than purveyors of the lastest industry tripe, most of them will likely survive (don’t forget that most small record shops deal with smaller and indie labels, and used CDs and vinyl).

People are still buying tons of music, and if digital music sales are any indication, music will continue to be a commodity. Although most commentary is still focused on what major labels can do to revive sales, the real issue is becoming what can artists do to empower themselves in this new realm.

People are exposed to a larger variety of sounds than ever before. Demand for music has skyrocketed, while profits are shrinking. The idea that music has lost much of its monetary value in the current market is a two fold effect: the novelty of file sharing and mega hard drives, and the price difference between a digital single or download and a CD.

We live in an era of convenience, and audiences consistently choose the format which is most user friendly (think audio tapes in the 80′s). The shift toward digital libraries has been predicted for years, and even with DRM, digital is already the industry standard. I’m still surprised that such a well-known and predicted phenomenon can cause such panic among executives. It’s almost as if upper management in the record industry has been ignoring the experts.

The quality of the music is a major factor in sales when people have access to massive catalogs, too. Hip Hop is a great example of this trend. Collapsing under the weight of violence and misogyny, some hip hop artist still enjoy huge mainstream and underground success. And the cause of this slump seems to be the choices made my industry executives over the last ten years.

The reality is this: The fate of major record labels has nothing to do with whether or not musicians will be able to create fulfilling careers, absolutely nothing. With unlimited access, people aren’t compelled to buy any album unless they absolutely want it.

And in case you wanted to know the secret to success in the music business in any climate:
Make Great Music!

RIAA/MPAA – Holes

Published on April 7, 2007 in Article and Blog. 1 Comment Tags: , , , , , , , , , , , , , , , , , , , , .

Spotted on: Passably News:

Have you ever heard of Pretexting? It’s a manipulation technique often used to fool organizations into disclosing private information. In December of 2006, a California Law was proposed: “…any person…obtaining or attempting to obtain…personal information about a customer or employee contained in the records of a business …by making false, fictitious, or fraudulent statements or representations…”. Although the bill was unanimously endorsed by members of the CA Senate, the MPAA stepped in and had the bill killed (see Wired Magazine, “MPAA Kills Anti-Pretexting Bill”, 12/1/06). To put it simply, the MPAA and RIAA demand the right to lie to us in the name of Copyright Protection.

It seems the RIAA and MPAA are willing to allow privacy laws to deteriorate for all of us to protect their profit margins. The question on my mind is: Why should the MPAA and RIAA get special freedoms to prosecute people for file sharing?

Back in 2003, the MPAA and RIAA filed for a permanent Antitrust exemption. The bill was sponsored by Sen. Orrin Hatch. It contains a revision to The Copyright Laws of the US in Title 17 of the US Code. Here’s the revised copyright law of the US according this (thankfully non-passed) bill by Sen. Hatch (the revision is underlined):

For purposes of this chapter … any reference to copyright shall be deemed to include the rights conferred by section 106A(a) except that the court in its discretion may determine that such parts are separate works if the court concludes that they are distinct works having independent economic value.

These are the tactics of the MPAA and RIAA are using to transform entertainment. Creating exceptions to copyright laws and the having legal permissions to lie, cheat, and sue us into buying media for the prices they set, and in the forms they dictate.

21st century entertainment is not based on mafia style coercion by transnational media conglomerates. An outdated business model cannot survive by excusing themselves form laws the rest of us have to follow. Corporations are legally recognized as people. People cannot have laws rewritten for their personal benefit.

Polyvibe Records‘ response is our forward thinking business model. We do not take our artists’ copyrights. Our prices are set by the perceived value of our audience. Our digital albums are 100% MP3. And best of all, we make sure our artists’ are taken care of financially and personally. Taking copyrights from artists, then prosecuting others for sharing them is in the past. The future is ours.

Peter Jenner is Our New Hero!

Published on December 13, 2006 in Blog. 0 Comments Tags: , , , , , , , , , , , , , , , , , , .

Spotted on: The Register

This is an absolute amazing interview with Peter Jenner. Peter is a world famous rock promoter and manager, who helped guide the careers of Pink Floyd, Billy Bragg, and a bunch of other awesome acts.

This interview is Peter’s take on what the future of the music industry looks like, and to him, it looks like a community.

He also goes into great detail about how royalties are dispersed. Basically, there’s a bunch of money paid to collection societies for licenses and performaces of music. Groups like ASCAP and BMI collect the money for their members, and then pay out the money quarterly.

So what happens to all the money that isn’t paid when artists can’t be found, or it’s unclear who the money goes to? Peter tells us about black boxes, or a big bucket where all that money sits. Now, in the real world, this has worked out fairly well for almost everyone. Plenty of artists are able to receive small check of less than dollar for what they’re owed. No one in the industry will admit these black boxes exist. Now that digital licensing is moving toward a post DRM (we hope) phase, the conversation is shifting toward how the money will be collected, and distributed.

The major news mongers report that major labels want to set up a structure for collection and disbursement of royalties through them, because they own so many copyrights. Where will that leave the independent musician, who has no right to audit a major label they’re not on?

Peter is an absolute genius, and if you haven’t seen his interview yet, check it out. His insights are profound, and he clearly knows what he’s talking about. My favorite insight form his article is his observation that unbundling albums online (selling singles) has ahd mroe of an impact on the death of record sales than any other factor. His thoughts on how major labels have “raped their own business model” are absolute genius.

So if you haven’t read it yet, check it out.

Speak Clearly (Jargon on a Tangent)

Published on December 12, 2006 in Blog. 0 Comments Tags: , , , , , , , , , , , , , , , , , , , , , , , .

Spotted on: New York Times, Globe and Mail
As the end of the year statistics for the music industry are released, I keep noticing a common tone of these articles. They all seem to be written about the six major record labels, and iTunes. As an artist and independent label owner (ergo, part of the music industry), these articles seem counter-intuitive to the way my peers and I conduct ourselves.

“Yet the industry as a whole still remains uncertain” is my favorite quote from this article. What is uncertain about the industry? People continue to buy music they enjoy, and more of them are buying it online. This has made it easier for anyone with ambition to get into the game. The only unclear thing I see is the fate of these transnational conglomerates.

So the major labels finally accept we don’t want to pay more than ten bucks for CDs, and we don’t like DRM. Somehow, no matter how much money these huge companies make, they are continually complaining about what they are losing. If they focus on what’s missing and wrong with their model, it takes the attention off why their model used to work. The NYT article states that ‘some estimates’ put the annual economy of music at around $75 billion. So what does that number really mean?

The music economy is vast, and a huge chunk of it rests in the hands of a few companies. These are the same companies that built their empire by taking the creative ownership over music in an unclear way, or by inventing a myriad of operating fees and loans to assess to artists like student loans. It’s a similar story to how Europeans ‘bought’ Manhattan. You offer someone a gift, or a show of support, and you ask for something. Instead of explaining what you are going to take, you smile and get them to agree to it. Once they sign a piece of paper, you force them to agree to your interpretation of the words through litigation, or worse. In the latter case, it was genocide, in the former, it is the complete monopolization of the music that we listen to.

Musicians have been getting this treatment since the phonograph was invented. Look at the story of the Funk Brothers (for those who don’t know, they were the Motown backup band from 1959-1972). This group of musicians played on more hit albums than any band in music history, and no one even knows who they are (Motown is now owned by Universal, btw). Like so many other extraordinary musicians, fame and success was pushed out of their reach, as the music they created went on to make a fortune.

So where is all that money? If this NYT article is any indicator, the only ones talking are the major labels. Do you think they’re going to present an unbiased opinion? These major corporations are complaining about how much content we aren’t paying for, and how their sales are down, and the whole time they are becoming more valuable companies.
According to a recent Globe and Mail article, there have been about 20 songs sold for every iPod bought. In fact, iPod users are not buying massive amounts of music like people did when CD Players were first introduced. The main source of the article is Josh Bernoff, a well known media and entertainment analyst. In fact, Mr. Bentoff notes that there is a huge slump in music sales in the second half of 2006. People are converting their CDs for use on other platforms. It would seem that people (known as consumers by these corporate monoliths) only want to buy the same product once. And who can blame us?

Which brings us back to the major labels, and the NYT article. The article points out that major labels are now asking for a cut of artist’s tour and merchandise revenue. Apparently, this has become a standard practice in major label deals. So on one side of their face, the major labels are crying poverty, and saying they need to take more from their artists. Yet in the same article, there are admissions that the companies are growing in value. Can you say cognitive dissonance?

Freedom of choice in music is infectious, and the supply has truly outpaced the demand. The days of an album sitting at number one are gone, and this a great thing for those of us who do not have access to mainstream press and media outlets. People buy more CDs when they are reasonably priced, and artists are still selling albums at the ridiculous prices. The major labels cry that they have to protect their interests with DRM, when their customers mostly use more than one format for listening to music. Music is a form of expression that is meant to be shared, not kept to oneself. The technicalities of software licensing and piracy are not applicable to music, and DRM is another way of saying we’re not buying art, we’re buying a product. And worse, that a CD album is different thing that an MP3 album, or even a .wma album. People aren’t that easily fooled, though. Sales reflect it.

Clearly, lots of people are buying music, and most of it is going to the huge companies to dole out as they please. People don’t buy music because it’s on the radio, or plastered in magazines, they buy it because it moves them. Major labels use record spins and downloads as a measure of success, when they are paying for the spins and driving downloads with ubiquitousness rather than genuine interest. Their multi platinum artists bounce up and down their charts like a basketball, and they refuse to see that’s how we want it. They want to tell us what a CD is worth, and tell us how we can listen to our music. These business practices only work when you have a strangelhold. In most other industries, a company is required to respond to their customers needs to stay in business. When your business model is based on dictating people’s choices, it’s no wonder that freedom of choice is such a threat. The means of production continue to only grow, and our choices with them. The 21st century king of the hill is not the only choice, it is the one the customer enjoys the most.

Music doesn’t seem to speak for itself anymore in their eyes. These companies view artistic output in the same way they view the final result: as a product. Their industry trends are an academic discussion that has completely left the real world. They could have conducted an informal phone poll to come up with the conclusion that CDs are overpriced. Record shoppes are paying more than the iTunes price for an album in some cases. The real issue is what people are willing to pay for, and to deal with that, you must listen, not dictate.
2006 is coming to a close, and the very foundations of how music is distributed and sold began a major transformation this year. According to Josh Bernoff, we’ll all be going digital by 2010. The major labels are slicing up the pie already, but in the age of choice, they may end up with empty plates.

Interview with “RIAA vs The People” founder Ray Beckerman

Published on July 28, 2006 in Blog. 0 Comments Tags: , , , , , , , , , , , , , , , , , , , , .

Peter Brown of the Free Software Foundation speaks with Ray Beckerman, lawyer for defendants in RIAA lawsuits about the impact of the RIAA’s legal strategy on the internet, copyright, DRM and our digital freedoms. He leads the discussion with the reason why only small law firms, or individual lawyers will ever take up the cause of those being sued by the RIAA.
He also dissects a typical RIAA “investigation” that form the basis of their suit against their customers. In essense the RIAA creates an account with a p2p network, finds users with RIAA tunes in their shared folder, and files the report. However, and this is the kicker, there is no proof of wrongdoing. That is, there is no proof that the user did not obtain the song through legal means (purchasing them, or making a back-up copy from a CD they legally own), nor is there proof that other users have ever downloaded the song. In other words, most of the RIAA lawsuits brought against consumers are mere ploys to extort money.
Many users have settled out of court. The few that fight it get into long drawn out court cases where every dirty trick in the book is used by the RIAA Legal Team to make it prohibitively expensive for the defendant to continue fighting the case. Lawyers, such as Ray Beckerman, are working pro bono or for significantly reduced rates on the behalf of the few brave souls willing to stand up and challenge the RIAA. Especially since many of the defendants have never used p2p software before, and until their subpoena arrived in the mail had never even heard of Kazzaa and the like.
If you want to help, you can donate money to the Free Software Foundation.
Keep up with Ray and his fight against the RIAA at his blog: RIAA vs. The People.
Download The MP3 recording of the call
digg this story
originally published on dr.xnlb.com