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Wednesday, November 22, 2017

Face the Music, Not the Prices

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It was no longer than a year ago that the American Supreme Court ruled in favor of the entertainment industry in MGM v. Grokster, a public indictment showcasing the classic battle between capitalist fascists and a general public refusing to pay for a pricey, yet poorly organized, product. Can you blame them?

I will admit that I am guilty of illegal downloading, mostly as a result of the ridiculously high prices that the record labels force me, the consumer, to pay for an album that has twelve tracks from which I might enjoy listening to only one or two.

The music industry is facing quite the predicament. Its entire revenue is derived from public consumption, that is, the selling and buying of compact discs and DVDs, so the prices will ultimately follow the fundamental rule of profit maximization: set your costs equal to your returns. Illegal downloading allows the consumer to purchase music for nothing, which affects the market demand for CDs and DVDs and alters the supply and surplus of audio and visual entertainment.

The industry is basically screwed by its inability to earn a profit, leading to the downsizing of individual firms, eventually raising the prices even higher and deterring an even greater amount of consumers. Is there a remedy? Not really. The emergence of legal downloading (e.g. itunes) might alleviate the situation, assuming that the public's enthusiasm for any and all free goods will miraculously disappear upon presentation of an honest alternative.

My current position as an intern at an independent record label has triggered a personal understanding of how I am preventing myself from obtaining a job in the entertainment industry. I don't actually buy the albums, I don't contribute to the company's accumulation of revenue, I take away from the employees' salaries, and my actions give rise to numerous layoffs in the field as well as my own inability to be hired by a firm that has no money to pay its workers due to low aggregate income. Solution: I ought to purchase CDs/DVDs instead of using i2hub, dc++, Limewire, Kazaa, Gnutella, BearShare, Napster, etc., etc. (you name it, I've used it). It's not so much that I sympathize with the artists because, as we all know, most of their revenue stems from consumption of concert tickets and merchandise (shirts, posters, stickers, dolls, perfumes, personalized jewelry, candy, gum, handbags, stationary...the list goes on...just look at the Spice Girls and *Nsync as examples).

These preposterous law suits against peer-to-peer programs such as Grokster and Napster are ultimately detrimental to the businesses and artists rather than the pioneers promulgating the software online. Think about this. I was once a huge Metallica fan (once being the operative word) until they filed a suit against Shawn Fanning, the twenty-two year-old creator of Napster. What a brilliant method of encouraging your fans to hate you by suing them for wanting to hear your music.

The fact that the public isn't paying for the music shouldn't constitute as a massive problem, since popular consumption of the band's records doesn't largely contribute to the members' proceeds, especially after taking into consideration the standard publishing royalty which usually accounts for less than 50% of the artist's earnings on the sale of an album.

Metallica lost a tremendous portion of its fan base, and that DOES have an effect on income in the sense that fewer people will now be willing to buy concert tickets to see a band that sues its own fans out of greed (hence giving rise to "Metalligreed," a term coined by big-hair band rival Motley Crue circa the Musician v. Napster controversy in 2000). The consequences are similar for the record labels, which will earn a lesser profit now due a shift in consumer preference. Because the label's entire income is completely dependent on record sales and NOT on the selling of merchandise, this puts the employee (i.e. me) in a far worse situation than the artists signed on to the label.



About the Writer

A. A. Abrahami is a writer for BrooWaha. For more information, visit the writer's website.
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3 comments on Face the Music, Not the Prices

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By Ariel on July 11, 2006 at 01:06 pm
Great article! It's nice to have the point of view of someone working in the industry
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By Jeff Silverman on September 11, 2006 at 08:54 pm
An excellent article. I too am guilty of downloading and the funny thing is, from day to day, I can feel differently about it. Sometimes my attitude is "O.K. I've been buying records and concert tickets for well over thirty years, I think I'm due something back..." Other days I realize that there's a lot of artists that work very hard for THEIR due and when I get angry at the record companies, the musicians pay the price. In fact, at the moment I'm listening to a CD I made from downloading...
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By Lisa Norris on October 09, 2006 at 12:51 pm
I loved your article , but I do want to tell you my view from an Artist's perspective. I know about the business too. I have played for Sony, RCA. Fiction, Hollywood, Mercury and others, and I am well connected in the industry. Even my sister has worked for Sony for about 15 years. But even though I have been guilty of illegal downloading myself, shame on me! I dont agree that the money from concerts and selling merchandise is enough to say we dont deserve to be paid for the actual music itself. Its not greed either. It's that the record labels themselves, and the lawyers involved, cause a musician to start out in a deficit, a debt we have to pay back before we see any of that other revenue. The money that an artist recieves upfront usully buys new gear, and a tour bus if they are smart. Then of course the lawyers charge around $50.000 just to shuffle the papers. I know you are talking about mega-bands here, but what about bands like the killers and Death Cab, or ones that just got signed? Are they making tons of money? Can they afford to not be paid for their work? You also stated that most musicians opt for a 50% publishing deal. This is not always entirely true either. A co-publishing deal would be the one that is signed with the record company, but alot of musicians are becoming smart about this, and starting their own publishing companies as a way to have a backup plan in case the record companies dump them. After all, they gave up their lives for these companies who promised to promote them. Ive seen the record companies from the inside. I think the real anger should be directed at the companies themselves who refuse to pay their interns because they think they are in enamored of the music business and can get them to work for free. Thank you for letting me express my opinion. I do think you are a really good writer though, although I think you shouldnt give up. You seem to have a good grasp of the business end of things, and artists need good smart managers like yourself. Try working for an inde label, they dont seem to have the same bullshit. And if you are an artist yourself, you already have a leg up on others, who are prey for the big giants.
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