Reframing the Debate
Peer to peer file sharing of music recordings has brought a crisis to the music industry as it stands today. As we will prove in the File Sharing section of The Survival Guide, file sharing is inevitable, and has signaled the death of the CD. But the problem with the discussion about file sharing is that major labels and editorial writers are calling it literally the end of music itself.
The current debate intentionally ignores the single most basic fact about file sharing: File sharing only directly effects recorded music. While this is an obvious statement, very few, if any, of the pundits, seem to want to have a full discussion about the effects of file sharing on a musician's income by looking at the whole picture. This is partly because it's complicated to do this, and doesn't make a nice neat editorial. But the other reason is very simple: The major labels make most of their money off of recorded music, so they have shined their spotlight on this single aspect of a musician's income. Since the labels are themselves media organizations, some of them part of news organizations, it's not surprising that the discussion has been simplified. For the current players, losing income based on recorded music is the end of music itself.
Note that even major musicians don't make any money off of recorded music. The major labels are the ones that have the real stake in this. Consider this snippet of an interview with David Byrne:
XJ: “How do you feel about the fact that some of your fans are downloading your music for free?”
David Byrne: “It's a mixed bag. Sure, I would love to have compensation for that. But the argument of record companies standing up for artists rights is such a load of hooey. Most artists see nothing from record sales -- it's not an evil conspiracy, it's just the way the accounting works. That's the way major record labels are set up, from a purely pragmatic point of view. So as far as the artist goes -- who cares? I don't see much money from record sales anyway, so I don't really care how people are getting it.”
-Boing Boing, David Byrne launches internet radio station.
If an artist like David Byrne can't make money off of recorded music, independent bands certainly aren't doing it either. And the file sharing that occurs usually doesn't take away from the most common forms of income from CDs, namely the albums sold at concerts. We will discuss this later, after introducing file sharing's economic effects, but we need to pan the camera back, and turn on the house lights so that we can see the rest of the stage regarding a musician's income.
On peer to peer networks, users download music recordings, but not any other aspect of music that can make money for a musician. For example, there is no way, over the Internet, to steal a live concert. Even if someone records it illicitly and sends it over the Internet, the musician still gets paid for the live show. It's also impossible, using the Internet, to steal the copyright to music. If a filmmaker uses a song that you write, for example, they'd have to pay you or else they'd be infringing. (While it's always possible to use music without permission, the internet has nothing to do with this particular misuse of music.) If a band covers your song, or a radio station plays your recording, you're still owed money by the performance society with which you registered your songs. (If you're not sure what we mean by this—and we didn't know this either until we researched it—check out the copyright section where we explain it for you, and tell you how to register with a society if you'd like to.) You also make any money off of merchandise that you sell. While merchandise can be counterfeited, the Internet doesn't make that much easier or more likely, and file sharing doesn't affect it directly at all. Therefore, the distribution of recorded music is just part of the larger picture.
In fact, sharing your recordings enhances your ability to make money on all of these other areas by getting your music to new fans, driving demand for your live shows, and hopefully giving filmmakers and other bands the idea to play your music. Thus, to do an honest accounting of the effects of file sharing, the full economic balance of lost album sales compared to increased demand for these other areas should be considered. For example, Beatnik Turtle licensed a song to ABC Family, part of The Walt Disney Company, for an advertising campaign. After they contacted us out of the blue and negotiated a licensing deal, we pressed them to find out how they heard about the song, but the only thing that we were able to get out of them was "It was on someone's iPod." While we don't know for sure if it was file shared, or legitimately obtained, we certainly don't mind if it was downloaded.
As we explain in The Survival Guide, commercial radio is pay for play, and is too expensive for most indie bands. And the major labels are unfair to musicians. Most importantly, indies have never had access to decent distribution directly to consumers until digital distribution became available. Therefore, file sharing opens up new opportunities for indies without detracting from their current income. At this point, the controversy about file sharing has not settled yet, but there is one certainty about this debate: Unless the discussion brings in all of the aspects of this issue so that the whole picture can be considered, the ones who have a stake in a single part of this picture, the ones who sell and control most of recorded music, will drive the debate.
Some of the more dramatic editorials state that musicians can't make money off of music anymore, and that there is less incentive for musicians to write new music. They claim this is hurting art and culture. It's hard to see that as anything but a lack of imagination. That kind of statement pins down music to the way that it was in the past and shows a lack of imagination about business and making money off of these endeavors. But the most surprising thing about these claims is that it argues the exact opposite of what file sharing has done. In the past, music was constrained to physical objects like records or CD's. Now that the music has been freed from their physical objects that contained it, music is being shared—literally shared—between fans on a worldwide network. It has done away with middlemen such as independent promoters and distributors who were between the musicians and their fans, and who were largely indifferent to independent bands.
The removal of these constraints is supposed to be bad for music? And it will mean that less musicians will be inclined to write new songs? File sharing hasn't diminished music, it has freed it. The only question is how to harness it to unleash your art to the world.