In an earlier posting, I wrote that one reason I have very little sympathy for the whining of major record producers about how Napster “steals” from artists is that, by and large, the money from record sales never goes to the artists. Instead, the record companies use their overwhelmingly superior bargaining position to force artists to sign recording contracts which overwhelmingly favor the company.
Will Baude responded:
I don’t disagree with Will that the RIAA (or, rather, the labels the RIAA represents) provides benefits to artists. I do think those benefits are ridiculously disproportionate to the value artists provide. Steven Albini, best known for producing Nirvana’s “In Utero,” provides a useful description of both the process and the money.
First, before a contract is ever signed, a “deal memo” is signed, stating that the band members and the label have agreed to sign a contract at some future point. What bands usually don’t realize is that once they’ve signed the deal memo, they have signed away all their options; they must sign a deal with that label, which may or may not bear any resemblance to what was discussed when the “deal memo” was signed. And if they don’t, they will lose all rights to perform and record, potentially forever.
Of course, a band could just refuse to sign the “deal memo” until they talk to a lawyer… but the band knows perfectly well that there are a thousand other bands who would be thrilled to sign the memo without making a fuss. Besides, they think, it’s just a memo – how binding could it be?
But once a band signs with a record company, if they do well, then they’ll make tons of money, right?
Not exactly. As Albini points out – and he provides the detailed numbers – in a typical case, virtually all the money goes to the label, not to the artists. For instance, if the artists grosses $3 million dollars, that translates to $750,000 of profit for the record label. How much does a band member get? $4031.25.
But not really. Because the band is also $14,000 in debt to the record company. So for a deal which gave the label $750,000 profit, the band profits approximately $5,000. Put another way, after all expenses are accounted for, and everyone but the band and the label has been paid, of the remaining money 99.4% is paid to the label; the remainder is paid to the artists.
And that’s if the band did really, really well.
(Remember that, the next time someone tells you that when you illegally download music, the person being hurt is the artist. As David Draiman, lead singer of Disturbed, says, the RIAA is fighting for corporate profits, not to help artists).
And that’s not the end of it. Because the band has signed away ownership of their own work, forever. So in ten or twenty years time, when the band is no longer hot enough for a major label to bother with, maybe the band members could make a little bit of money by selling self-published CDs of their songs. Too bad – the label owns the copyright, and will keep the songs out of print forever rather than letting the artists self-publish.
Do I think that makes it not stealing to illegally download music? No. But if our goal is to increase justice in the recording industry, there are many more important fights than protecting the labels’ right to prevent people from hearing artists’ music.
- For instance, work-for-hire laws (the legal fiction which allow labels who have never created anything to become the legal “creators” of music) should be abolished entirely. Nothing the labels bring to the negotiation process justifies taking creatorship of the work away from the artists.
- There should be a legal limit – say, four months – on how long a band can be held in limbo because an agreement cannot be reached – especially before the labels have actually paid out a single cent, but have only signed a “deal memo.” If a band and a label can’t reach agreement, the just thing for them to do is part ways – not for the label to legally push the band out of existence.
- It should not be legal for labels to use contracts and copyright as a way of keeping music out of print and unavailable to consumers indefinitely. This practice doesn’t benefit consumers, doesn’t encourage creativity, and goes against the original purpose of copyright laws.
- Exclusive publishing agreements – in which an artist agrees to publish not only a current album, but all future albums, with a particular label – should be abolished. These publishing agreements are anti-competitive; they give the labels the right to negotiate with as many artists as they want, while artists are robbed of the right to shop around and get the best deal the market will offer them.
- More generally, all of the applicable rights that Scott McCloud proposed for cartoonists ought to be legally secured for all creators working with publishers or labels. By no means will doing this rob labels of their ability to make a profit; but it will rob labels of their ability to take such a disproportionate share of the benefits and profits away from artists.
I’m just spitballing ideas here – perhaps some of the specific proposals wouldn’t be so great in practice. My point is, if our concern is eliminating injustice in the recording industry, the deprivations of Kazaa really shouldn’t be that high up on our priority list. Compared to how labels screw over artists, Kazaa is unimportant.
Isn’t it wrong to use the law to alter the balance of power in negotiations? No, I don’t think so. Minimum wage laws, for example, prevent employers from using their greater negotiating power to force people to work for a dollar an hour (in the US, at least). The recognition that vastly unequal negotiating positions lead to unjust outcomes, and in some cases ought be legislated against, increases fairness in the marketplace..
THANK-YOU! It’s about time someone explained the economics of the record industry!
I am soooooo tired of industry lawyers trotting out the arguments about depriving artists of their hard-earned wages.
Even Metallica sued napster because it infringed on their supposed “artistic freedom” not because they were losing money.
god bless Steve Albini!
JD
Nice post.
But if our goal is to increase justice in the recording industry, there are many more important fights than protecting the labels’ right to prevent people from hearing artists’ music.
But I would argue that the goal of [most] file swappers is NOT to increase justice in the recording industry. It’s to save a few bucks by not paying for CDs.
If you want to fix what’s broken in the industry — which you have outlined very well here — there are legal ways to go about it. I guess I’m just tired of hearing people pretend that they really knew one thing about power struggles the music industry when they downloaded all those songs for free. [I’m not saying you did this, Amp; it’s just what I’m seeing all over the web this week.]
People who want to help struggling artists should donate to a legal fund to help them fight in the courts. Hey, with all that money they saved on the free downloads, they should have a bunch to donate, right?
Have you heard of a mass of file swappers reaching into their pockets to do that? Nope. ‘Cause that’s not what file swapping is about.
The only thing to add is a link to Courtney Love Does the Math.
i’m no fan of steve albini the producer; but as a voice of reason against the major labels’ despicable business practices, he is quite valuable.
Amp, i’m very glad you’ve chosen to stick with this topic. i am wholeheartedly in agreement with you. let’s keep an eye on things…
Thanks for the info Apm. I has some idea about how it all worked, but I didn’t realize quite how bad it really is.
bhw, did you even read the post before stepping on your soap box? Amp isn’t defending file swappers, he’s saying that to protect recording artists, there are more important things to focus on than file swapping.
bhw, did you even read the post before stepping on your soap box?
Well, I thought I did, but I guess I was all fired up and in a rush and didn’t read carefully. You’re right. [Insert Emily Litella here]
Oh, and for the record, I was no more on a soap box than anyone else who expresses an opinion. Try to remember that the next time you state your opinion, okay?
Raznor is right — this is not about defending file sharing, which in any event is never going away. (what’s more, i don’t think that people who download or share music are a monolithic group, anyway. surely, some do it to save money, some do it for political/philosophical reasons, and others are somewhere in the middle.)
in my opinion, the record labels have simply priced their product so high that people are refusing to pay for it. the labels, to put it mildly, are freaking out.
if they want to crow about lost profits and wave impressive charts and graphs to congress, that’s their legal right. but they can spare me the bullshit about defending artists’ rights. this is all about business.
not to say that there are clear answers; this is new territory for copyright law. but please, let’s keep the issue of artists’ rights separate from the issue of labels’ profits — because frankly they are at odds with one another in the current world of corporate music.
may i spitball someone else’s idea?
downhill battle will be launching soon. they have info, news, flyers, and a page of resources… but my favorite is their iTunes iSbogus page.
i’m not advocating anything (yet). i’d like to know what you (who all seem to know far more than i on the topic) think…
Do I think that makes it not stealing to illegally download music?
This is the only point we disagree on. Calling data-copying of any form theft is IMHO completely foolish. Theft implies that something is taken from someone by the thief. Data-theft, whether copying music, anime, or software, takes nothing from anyone. IMHO, we need to completely rework the entire concept of intellectual “property” to take into account by the reality that it is trivial to copy all electronic media and that doing so in now way harms the original. I personally favor non-copyright solutions like the Street Performer Protocol to ownership of such nebulous properties.
Which is all fine and good, John S., until you consider some people are actually trying to make a decent living off of their art, and they make that living through royalties from what they’ve created. You take stuff off the internet, you’re taking away those royalties. (this is assuming that there’s a fairer contract than what exists usually for the record industry, like say a screenwriter) You may say, oh poor babies, get a job like everyone else. But what you watch and what you like depends on those smalltime screenwriters or whatever who need to make a living on what they write. (Okay, full disclosure, my brother is one of those screenwriters I’m mentioning, also I’m tired)
The important point that Will is missing is that file sharing (and it’s close cousin, net radio) are alternate methods of marketing and promotion. This is why the major labels are so intent on crushing them — as long as they hold a monopoly on promotion, would-be major artists have to sign with them.
Most of the CDs and tapes I own I bought because I heard some music from them for free. I suspect this is true for most people.
Arg. That should be “alternative method”.
Be that as it may, it doesn’t answer the question of whether one is allowed to share files WITHOUT the permission of the copyright holder. My own inclination is no– you can’t just declare that you’re engage in “promotion” activity if the owner of the copyright doesn’t think what you’re doing promotes his activities. I think that’s probably sound. But I do agree with you that P2P sharing of material WITH the permission of the copyright holder should be strictly protected. Come hell or high water.
Will, the RIAA isn’t drawing that neat distinction. It’s trying to tar all file-sharing as piracy, to close off that avenue of promotion.
I don’t think businesses have a right to force technology to conform to their business model. If the technology makes file-sharing easy and common, and you want to make a living off of music, than you should probably try to make that living in a way that file-sharing aids, rather than one that it harms.
Avram, I’m agreeing with you. I don’t like the RIAA at all and they’re wrong to try to close off non-piratical file-sharing. All the same, I don’t think that obligates them not to fight the file-sharing they *are* allowed to fight. That is, they don’t have to live in a way that file-sharing aids rather than one that it harms. They have a right to stop certain kinds of file-sharing, by lawsuits or whatever. The piratical kind only.
Just to second John S.: whether or not file sharing is copyright violation, whether or not it’s immoral, whether or not it actually makes a perceptible difference in the amount of money the artists get, whether or not those artists are unconscionably exploited, file sharing ISN’T theft. Calling it that just mushes together things that are different, and increases the already rampant confusion. People who think it’s copyright violation should say that it’s copyright violation, not that it’s theft (or arson, or jaywalking, or indecent exposure).
Yo! Sup wit all my bitches?! I’m just chillin in my crib, bitch! Yo, that jacket looks tight bitch! Uhuh, don’t go there girlfriend. All you hoes don’t got nutin on yo hip bith right here. So, don’t even try or i’ll kick u ass, bitch!
Yo, peace out bitch
What about publishing royalties? I’ve always heard that in the music business the money’s in the publishing. The Courtney Love post mentions publishing royalties – which added up to $750,000 in her scenario. I’m not too heartbroken about band members who played on an album, toured a couple of weeks and received nominal pay (with all expenses paid) when they did not participate in the composition of the music. That’s called working for a living and paying dues.
In the scenarios described above, doesn’t the writer of the music on an album that sells 250,000 copies make out OK, and isn’t that person usually a member of the band? If so, that paints a slightly less onerous picture – one where Mick and Keith get paid handsomely, but where Charley works on wages.
An industry that threatens to throw its best customers in jail needs to re-think its business model.
Pingback: I protest.
Pingback: Pacific Views
Pingback: Anonymous
Pingback: suburban blight
Pingback: suburban blight
Pingback: Polytropos