The major music label's mantra that illegal music downloading is killing the music business is about as tiring and old as the music they release. The record industry is sounding like a broken record (sorry, I couldn't help myself).
The argument that frustrates me most is when the majors equate every single illegal download with a lost sale. What rubbish. But it would be naïve to expect multinationals to be rational in defiance of their profit motive. (Kind of like the Australian mining companies claiming a tax on their profits would send them broke.)
The data says music sales have dropped. I don't doubt this and there are a number of possible reasons why: digital downloads have led to increased purchasing of individual tracks rather than albums - that would have to eat into profits.
Personally I also suspect that digital distribution of music has allowed much smaller artists and labels to sell music well beyond the number of independent labels that were prepared to take a risk on CD or vinyl manufacture costs, freight charges, bad agreements with indie distributors and then face the possibility of getting half the records back because they didn't sell as much as hoped. All these small net labels and artists selling digital releases through increasingly niche channels are unlikely to be accounted for in any official music sales figures. Sure, they're not selling in the billions but I would suspect there has been a shift in spending away from the majors and bigger independents.
And let's face it, the majors have been peddling such safe, utter shit music on the public for so long, the only people that seemed to be surprised less people want to buy their bullshit are the record companies. Their choice of massive marketing budgets to sell music rather than fostering genuine talent over a number of albums was a bad one and it serves them right.
It's also possible discretionary spending is being spread more widely across entertainment purchases. I mean, it wasn't often people would buy a movie on VHS cassette but now you're just as likely to purchase a DVD as a CD. Further to this, generally, people are also spending much more on big concerts. There's a great article about this in The Economist:
“Between 1999 and 2009 concert-ticket sales in America tripled in value, from $1.5 billion to $4.6 billion (see chart 1).
The Economist article also notes that:
“[the British music industry] turned over £3.9 billion ($6.1 billion) in 2009, 5% more than in 2008. It was the second consecutive year of growth. Much of the money bypassed the record companies. But even they managed to pull in £1.1 billion last year, up 2% from 2008.”
Given all this, arguments that the music industry needs to find new business models for the digital age are nonsense. Most sectors of the music industry have already found different ways of making money. Or rather, they're relying on the same models they always had prior to the unprecedented boom CD sales created. Whilst I don't doubt there's an element of truth, whenever I hear small labels complain about the impact of illegal downloads and the only real way for a non-commercial artist or band to survive is to tour a lot, I think to myself, gee, that sounds an awful lot like it was when I first got into underground music. Prior to the Nirvana phenomenon and the corporatisation of underground music (which became indie) even some of the bigger indie rock bands still only made money by constantly touring. Let's face it, it's unlikely labels like SST and Sub Pop were dealing out a liveable wage to artists from their music sales.
Interestingly, at that same time, it was easy enough to tape your favourite tracks from the radio. Was anyone complaining then that every track recorded to cassette from radio was a lost sale? (Maybe there were but who'd take that seriously?) And, certainly, no one was ever going to suggest shutting down radio stations because they aided music piracy. But, astonishingly, that's exactly what the US is doing now, with legislation aimed at banning websites that 'aid' piracy such as rapidshare etc.
What's even scarier is that those touting new business models, such as royalties for streaming, are screwing artists more than ever. There's a great infographic over at Information Is Beautiful that shows just how little money artists earn from such digital distribution methods.
And everyone is throwing their hat into the ring. Recently Razorfish (a digital agency that works with some of the biggest brands in the world) announced they are 'partnering' with a US artist, AM whereby, if I understand the idea correctly through all the social media jargon, they'll promote the artist through social media networks such as Youtube and by successfully leveraging these channels, will pay the artist a proportion of the advertising revenue earned from youtube views etc. There's a good explanation at Amnesia's blog (Australian subsidiary of Razorfish).
I don't see it working. They argue that unlike Spotify, there's greater returns for the artist, but that's like saying slavery in Ancient Egypt was better for the slave than African slaves in America. (Ironically, for all their self proclaimed forward thinking, the music artist is neither original or forward looking.)
My view is, who gives a fuck if record companies' profits are dwindling. Life's always been hard for artists, and whilst I wish it wasn't so hard for some friends who deserve greater recognition and probably financial success from their output, it's not really any different to the issues those on minimum wages face; it's hard to pay the rent and feed the kids, the hours are long and there's no guarantee you'll have an income next week.
Talk of new business models will only ever perpetuate the pittance smaller non-commercial artists can expect to earn. If it's a decent living you want for artists then it's not new business models you want, it's a new society.