I really enjoyed this very thorough and well-researched blog from John Tatlock. By the way, The Quietus is a great on-line magazine if you like muisc and the arts in general - very well written throughout. Anyway, here's the article ....
As Lord Mandelson's anti-piracy Digital Economy Bill begins its uncertain journey through parliament, John Tatlock investigates the music industry's most troubled decade yet and says 'stop whining, it's only a scratch'.
It was a decade ago, in the summer of 1999, that the first significant peer-to-peer file sharing service, Napster, was launched, throwing the record industry into a tail-spin of fear, fury and chest-beating.
The popular Napster myth is a David and Goliath one. Napster's creator Shawn Fanning carefully cultivated the file sharer's Robin Hood image - still touted by the dodgy far-right-party-funding sleaze-bags behind The Pirate Bay - by declaring that his goal was "to take down the record industry and give away free stuff!"
This was, of course, nonsense. Fanning had actually been working on the Napster software since 1997, and was careful to put together an executive team based in California before releasing the program. This team were to stay in the background dealing with the approaches from the record industry that Fanning was both smart enough to know were inevitable, and bold enough to think he could turn into a viable business. Meanwhile Fanning and his college buddy Sean Parker deliberately presented themselves as a couple of enthusiastic hackers giving away the program for fun. The intention, though, was always to build Napster up to be the de-facto biggest music distribution service on the internet, and sell the record industry's own content back to it, by making the service legal and subscription-only, for the right price.
Its impossible now to say how things might have been different had the record industry swallowed its collective pride and gone for this blatant protection racket. The sunniest vision of this parallel universe sees us with a Spotify-like service, only a decade early, global, and with a much larger library than any legal service currently offers.
That's actually a bit of a stretch. The reality was that the genie was out of the lamp, and when Napster was eventually shut down by a court order in 2001, users simply migrated to the many alternative networks that sprang up in its wake. The technology that powered Napster was not particularly sophisticated - peer-to-peer networking is decades old - and once the admittedly inspired idea was out there, it was trivial for people who really were just enthusiastic hackers to emulate. So there's no reason to believe that users wouldn't have reacted in the same way to a request for subscription money and simply gone elsewhere.
From this point on, illegal file-sharing proliferated wildly and is still with us. So where are we a decade on? Surely by now, the record industry should have collapsed? After all, it keeps telling us it's going to, lumbering around with a hang-dog expression and a "The End Is Nigh" sandwich-board dangling from it's slumped shoulders.
The thing is, while certain operators are indeed struggling, UK music industry revenue has actually risen consistently throughout the decade. Yet the conventional wisdom is that it's all over bar the shouting. Perhaps, like Harvey Keitel to a grimly wounded Tim Roth in Reservoir Dogs, someone needs to bark at the record industry: "Just cancel that shit right now! You're hurt. You're hurt really fucking bad, but you ain't dying. Say-the-goddamn-words: you're gonna be okay!"
Myth No. 1: Nobody Pays For Music Any More
A recent Times Online blog article revealed a fascinating fact, that runs entirely counter to conventional wisdom: UK music revenues overall are actually up.
It turns out that while record sales overall have declined severely, with many labels feeling the pinch, artists' revenue is way up. Much of this is down to a remarkable increase in live revenues over the last five years, which is now around half a billion pounds annually and rising. In fact, live revenue will almost certainly overtake revenue from record sales for the first time ever in 2010.
Of course, not everyone is benefiting equally, and while precise data is hard to come by, it seems that most of this revenue is being hogged by "heritage" acts who have built their fanbases often over decades and can charge premium ticket prices. In 2007, The Spice Girls were the UK's biggest concert draw in 2007, netting around £3.5m for their UK dates alone. The only vaguely new acts in the top ten that year were Arctic Monkeys at 6 (£300k) and Amy Winehouse at 10 (£229k). And it is sobering to note that Led Zeppelin got in at number 9, with £240k's worth of tickets for a single show (the proceeds went to charity, it should be noted).
A more modest, but still significant factor is the increase in revenues collected by the Performing Rights Society (the service that collects royalties on behalf of artists) from broadcasters, including the emerging area of internet radio, and services like YouTube and Spotify. This means that even as record sales decline, new sources of revenue contrinue to appear. Sure, this is a bummer for anyone whose business is selling records, but no doubt the Victorian candle-making industry were pretty pissed off with Thomas Edison and his bloody light-bulb. Eventually, you just have to get with the programme and adapt.
YouTube's part in the story is fascinating. It's roots are entirely Napster-like, in that it was founded on blatantly illegal use of content. By allowing users to upload music videos and TV programmes, it did for video what Napster had hoped to do for music; become the de facto standard for web video by entirely illegal means and then offer to make a deal when the content owners came knocking. The ethics of this remain hard to defend, but the record industry in particular had learned its lesson from Napster and took a more pragmatic view this time around.
There was a bit of a face-off earlier this year when YouTube blocked "premium" music videos in the UK after talks with the PRS broke down; YouTube's owners, Google, were seeking a more favourable (i.e.: cheaper) licensing arrangement, and the PRS and the artists it represents were less than keen. Billy Bragg went as far as to brand Google as "menacing" and petitions duly did the rounds.
Both sides remain tight-lipped about the final deal, but the model was switched from a per-play fee to an overall subscription lump sum, lasting until 2012, from which PRS will pay artists on a per-play basis. This means that YouTube now pay for music content in much the same way as bars and clubs do, albiet on a bigger scale; once they've coughed up a fixed license fee, their responsibility ends, and it's down to the PRS to decide which artists get what share of the revenue.
Still, whatever the details, anyone looking for a ballpark figure should know that the PRS's standard rate for streaming audio is a don't-quit-the-day-job £0.00085 per play. To put it another way, you earn one shiny pound if your track is played 1,176 times, while a million plays bags you 850 quid. 80s pop svengali Pete Waterman recently grumbled that the massive "Rick-Rolling" phenomenon, where web-surfers in their millions were misled by interesting-looking links to a clip of Rick Astley's 'Never Gonna Give You Up' had netted him a princely £11 from YouTube, though how true that is is anyone's guess.
Myth No. 2: Fifty Quid Bloke
In the middle part of the decade, 'Fifty Quid Bloke' became a meme that spread rapidly around a desperate industry still focussed on physical goods and retail. This was a solid, dependable consumer, middle aged, with reasonable disposable income, who on a payday will buy a couple of CDs, a DVD, maybe a book; roughly fifty quid's worth of stuff. Suddenly, it was as if this was the only consumer that mattered. Screw the kids, they're all stealing everything anyway, this is the guy we need to reach.
Read the rest of this fascinating post ...
Posted via web from mick's posterous
Labels: downloads, music, napster, spotify
