In the early 1970's, an Albanian musician named Sherif Meidana sang a Beatles song at a music festival. The song was "Let it Be." To us, that might seem like a typical event, but Meidana was imprisoned for 20 years as a result. In the eyes of a totalitarian state, the crime Meidana committed was unpardonable. Because he did not apply for the proper governmental permissions, he did not have the right to share this song with the audience. Meidana suffered for his belief that powerful organizations should never have the right to repress the free sharing of music in public. (More)
Albanians have viewed the United States as a land of freedom, but the recent push by the big music labels to punish sharers of music might cause Albanians to wonder how free Americans really are. Nowadays just possessing an unauthorized mp3 subjects the individual to fines up to $150,000 and up to 10 years imprisonment per offense. Another proposed anti-piracy bill backed by the people who brought you Eminem and Norah Jones would increase the maximum fine to $250,000 per file shared and make music sharing a felony offense with a maximum sentence of 5 years per file shared (More). Such draconian measures are reminiscient of totalitarian regimes, and in fact, CNN's recent publicity given to the "Repentent Music Sharer" (which appeared on CNN's front page on September 8) recalls the show trials given to dissidents in Russia and China during the height of political repression.
Impossible, you say? You think these legal penalties are just theoretical and subject to judicial discretion? First, the docket is replete with cases of people who received maximum sentences out of proportion with the offense. Second, repressive bodies use broad discretionary powers to intidimate individuals. A group that can sue for $150,000 can also intimidate risk-averse defendants to settle (even if the sued party had a perfectly valid defense).
The music industry that profits from Justin and Mariah and Kelly want you to believe that music sharers are criminals and hurt artists (and share porn). In fact, 68 million people have shared music in the USA alone, and many are the biggest supporters of music. That is more than the number of people who voted for George W. Bush in 2000. An industry that calls for punishing a sizable percent of the population raises the question of whether the law was legitimate to begin with.
By nature, Americans are a generous, sharing people. Sharing artistic experiences is a natural and integral process of a musical education. The music industry benefits when a piece of music is treated as a commodity, and therefore they promote the idea that you can enjoy music only when you own (i.e. pay for ) it. But if you are like me, you have heard free music at open air concerts, churches and along the street without feeling the urgent need to possess it. In fact, sometimes an effective piece of music wants to possess YOU instead of the other way around. That is good and perfectly natural.
If this is true then, why would musicians—who care about the soul of music more than anyone-- agree to let the music labels serve as caretakers for their music? First, when recording equipment was expensive (See Note), cutting a record or CD was a way to preserve the musical artifact. If one criticizes the music labels for their "greed," one also needs to credit them for preserving the musical souls of Louis Armstrong, Elvis, the Andrews Sisters and Count Basie for later generations. Second, a musician might surrender rights to a company in the belief that the music company is better equipped to do marketing and promotion. He might be uncomfortable with self-promotion and think it better for a third party to take care of it. Third, a typical musician wants some way to defray production costs and free up time for creating music. Signing with a label would bring an advance/royalties, possible touring contacts and possibly more free time to create music. If that is true, then the deal with the devil is not entirely evil.
Maybe 20 years ago, this deal made sense to the artist, but now it seems almost ridiculous. First, preserving the musical artifact. The major labels require such a fast return on investment that they let recordings go out of print very quickly. Millions of hours of "orphaned" music lie in some record studio's vault somewhere because the labels have exclusive rights to it and see no money in a reissue. (See Note). Current copyright laws last so long that it is unlikely for an artist to live long enough to see "orphaned music" revert to the public domain. In some cases, music contracts can allow the music company to "pass" on a singer's music while retaining exclusive rights. In a famous case involving Austin singer Sara Hickman, Elektra records refused to release one of her albums and in fact wouldn't give her the rights back unless Sara bought back her own songs. Sara Hickman's case may be unusual, but it illustrates how a record label's financial interests run counter to the public interest in making music available.
Second, marketing and promotion. Record labels claim the advantage of a massive marketing machine to produce music videos and the money to pay independent promoters to get radio airplay. Inevitably, these overhead marketing costs are deducted from the artists' royalties (As Steve Albini famously demonstrates--See Note). But is this money well spent? First, people are spending more time listening to Internet radio for which indie promoters have zero influence. My situation may be atypical, but I listen to live365.com 50 hours a week and mainstream radio maybe one hour a week. Second, the best way to publicize a musical group is to share its music. I once asked a musician how people found out about her band or how she learned about other bands. "Mix tapes," was her answer. Sure, it wasn't exactly legal, but it allowed people to learn about new kinds of music. New artists (and at some point every artist is new) need informal sharing networks to establish a reputation. To pretend that music sharing is not vital to appreciating music is basically to admit that people have no choice but to swallow the crap that commercial media try forcing upon us.
Third, defraying expenses. The isolated cases where artists profit handsomely from record deals don't refute the main point that the majority of artists feel exploited by record contracts. For one thing, music labels typically deduct up front expenses (such as promotional copies, equipment rental and production costs) from an artist's royalties, making it uncertain whether the artist will earn a profit at all. An ASCAP Affiliated Site mentions that the recording industry has given out more than $20 billion in promotional copies over the last 5 years-- physical products that were never sold nor returned. It continues:
The average recording artist is lucky to get $2 of the $16-$18 retail CD price. David Lee Roth makes a whopping 30 cents for every Van Halen CD that sells (at least the ones he was on). Incubus' last contract gave them $1.86 per CD. In the same manner, the average artist payback for a 99 cent download is about 12 cents.
We could decry the bite that music labels take, but isn't 12 cents per song better than nothing? Separate that into two questions. First, could the artist sell the same CD directly and realize more profit per CD? Second, would the musical product find more customers by a commercial distribution system or an informal distribution system? Any owner of a CD burner knows that copying a blank CD costs less than 50 cents. No matter how earnestly a music executive can talk about overhead, it insults a person's intelligence to insist that it costs more than $10 to produce a CD. (In fact, the major music labels have already pled guilty to a price fixing scheme).
Would a musical product find more customers or listeners through a commercial distribution system or a noncommercial one? Often it takes a while for interesting and exotic music to find an audience. When music cannot be shared, people's tastes tend toward the conservative because risk-taking (i.e, buying unknown records) costs money. But when people have a chance to try out more music without paying, their tastes become more adventurous and unconventional. In the year in which I downloaded music using audiogalaxy (see Note), I downloaded Indian and Asian music, significantly expanding my musical universe. When industry people protest against music sharing, they reveal an ugly nostalgia for a time when people bought no more than 10 albums a year and lots of talented artists never received recording contracts, dooming their musical voices to oblivion.
Both musicians and listeners face a choice: do you want the soul of music to be locked inside a vault? Or do you want it to roam free? We are like bees admiring the flowers all around us, flitting about, taking what we need and moving on (and propagating the beauty of what we see at the same time). Flowers look pretty among other flowers, not inside some ugly air-conditioned vault guarded by lawyers. As the public areas become more covered with flowers, the desire to possess the rotting heaps in the vault will seem more bizarre, less relevant. The best way to increase the number of flowers in this world is to open the gardens up to bees. Anyway, it is folly to think that a group of lawyers (and that is essentially what a music company is) own a song or a human voice or an image. Nature creates beauty not to be hoarded or bought, but to be shared; businesses are free to sell reproductions or even to spotlight new forms of beauty, but they cannot claim absolute ownership; if they do, they may find that the world will ignore their protests.
So if music is to be shared, will artists be able to support themselves? I cannot say; I am only a music enthusiast and frankly have no insight into the variety of ways musicians have eked out a living over the centuries. For some, it may make sense to sign over absolute distribution rights to iTunes or cdBaby in exchange for a cut. (See note). For others it may make sense to produce and sell their own CD's. For me, the first and foremost problem is growing an audience; once you have an audience, the problems of economics become easier. Judging from the propaganda that the major record labels spread on TV and in magazines, one would think that most musicians fear that music sharing will wreck their livelihood. In fact, for unsigned musicians (and that probably accounts for a good 90-95% of all musicians), nothing would please them more than for thousands to download mp3's off their websites and share them. The problem for the majority of artists is not too much sharing, but too little! Because we do not share enough, we overlook the vast pool of musical talent in our country, and allow gigantic corporations to fill in the vacuum with its mediocre offerings touted by its magnificent media megaphone .
Before considering the question of how musicians can make a living, let's look at how not to pay an artist.
I don't usually buy CD's, but but while browsing around half.com, I remembered singer Patti Rothberg (who sang that terrific feel-good song Inside (Real Audio)). It's one of my all-time favorites. It came from the album Between the 1 and 9 which I bought on half.com. A used CD cost $1, and shipping cost $2.50, bringing the total to $3.50. When I received the copy, I discovered that it was a promotional copy (i.e., not intended for sale). (See Note).
So let's look at the economics. The new CD probably cost about $12 or 13$, out of which Rothberg probably received a $1 profit (at best). But when people buy used CD's (and its lower price makes it foolish not to), neither the artist nor music label receives anything. Presumably the music label or retailer recovers a fraction of cost when the item is remaindered and discounted. But in this particular case, the promotional cost is deducted as overhead from the bottom line, so it's unlikely that Rothberg recovered ANY money from this transaction. In fact, it's possible that this promotional copy counted against her royalties.
Out of that $3.50 I paid, $2.50 went to ebay/half.com for managing the transaction, and $1 went to an unscrupulous music journalist or DJ who resold the CD. How could I have bought this CD in a way that might have benefitted the artist most? I went to her website for a hint about how to give her a tip. But signed artists usually don't ask for tips. EMI produced this CD, and I'm guessing that Rothberg bought old copies and was reselling them for $16.50 (at least that's my guess; could I really be sure?).
Well, $3.50 v. $16.50. What did I choose? So I buy the $3.50 CD. I'm happy that I didn't pay full price. The unscrupulous music reviewer is happy that s/he made a $1 profit. Ebay is happy because it profitted $2.50 from the transaction. Everybody's happy now, right? Well, except for the artist...
A voluntary payment business model, in my opinion, is the only one that accomodates and benefits from the natural tendency to share music. Sites like musiclink allow the artist to receive voluntary micropayments (i.e. "tips") directly from listeners. Other services like Paypal and Amazon can do this also, but musiclink is the only site I know of that claims to give 100% of the donation directly to the musician.
But what about freeloaders? What incentive would people have to give tips?
The question boils down to audience size. The U.S. Population is 290 million, which is 4% of the world population. That's a lot of potential music sharers. If a musician has a core fan base of 20,000 people in the US, and this proportion were extrapolated to every country, that could mean as many as 500,000 dedicated fans. Up to now, the limiting factor has been cost and media, but unlimited music sharing permits an exponential rise in this core fan base. Maybe 200,000 or 2 million people or 20 million people are sharing your music domestically. (This amount may seem unrealistically high, but remember Nagle's Law: As storage devices increase in size, so will our unquenchable thirst for multimedia content). Suppose that 2 million people had your song, and a small percentage (say 1%) tip the artist a trivial amount (say $1). That means that the artist receives $20,000 for one song and a massive following for future songs. (And people overseas sharing your song might cause that income amount to double or triple). Compare this to the current distribution system where less than 5000 U.S. artists sell more than 1000 copies of their CD.
Musicians afraid of depending on voluntary payments need to remember the intense gratitude that listeners feel for those who create compelling music. Music transforms the lives of listeners. It is not merely a matter of being generous or doing the right thing. Listeners who downloaded the music want a tangible way to show appreciation to the artist. (That is why, by the way, that the usual criticism of micropayment systems do not apply here). (Note) Giving to an artist through musiclink is one such way.
Peter DiCola and others have criticized tipjars, while admitting that they may turn out to help artists. Will tipping ever catch on? And isn't it a little condescending? In the United States, most people tip their waiters and waitresses 15% of the check as a matter of habit. Why then would Americans refuse to do something comparable after downloading a phenomenal set of songs? When you buy a CD or some Itunes, you are paying for a virtual product. That is an exercise in capitalism. When you give money to the musician after downloading a song, you are expressing what moves you. You are letting the artist know that you as an individual have found the song to be valuable. That is an exercise in appreciation (and that is why this kind of tipping might be more viable (See my very long footnote).
At the moment, everyone is grappling for solutions. Advocates like Michael Crawford have called for nonviolent resistance against the RIAA, daring them to come knocking at one's door. Other organizations like the Electronic Frontier Foundation are calling for limits on subpoena powers and petitioning Congress and the Courts to permit music sharing under Fair Use (Note). Fred von Lohmann and others have called for compulsory licensing on hardware like CD burners and on bandwidth (see Note ). Under such plans, everybody will pay the "file sharing" tax which will then be redistributed proportionately among musicians. Legal scholars like Lawrence Lessig have called for copyright reform, and Technology Advocate Richard Stallman has called for limited duration content licenses to allow creative content to revert to the public domain after a period of time (5 or 10 years). On the other side, we have RIAA threatening lawsuits and launching a massive propaganda campaign to prevent unauthorized sharing of their music content. To counter that, consumers have called for boycotts.
For me, the problem is not one of technology but of taste. When a p2p sharer launches a tirade against the music industry, and then uses p2p to find tracks by bands from the major labels, I fault this sharer not for illegality but unoriginality of taste. It is like buying a nice expensive $10,000 plasma wide-screen HDTV and using it to watch "Porky's 2" or episodes of Gilligan's Island. If the future involves people using anonymous freenet to swap mp3's by RIAA artists, doesn't this mean that the RIAA has still won? (See note)
Here's an idea: instead of downloading the songs being pushed by the media machines, why not do something even scarier ignore their music. By sharing mp3's from the big labels, you are just perpetuating the myth that musical talent is centralized only in the offices of those who hold the tightest rein on music.
Now we are coming to the heart of the problem. The problem is not technology or even the law but how do we discover great music? Where do we find out about music? What media outlets provide trustworthy insights about what music is worth listening to? People can rave about P2P networks all they want, but we still need to address the question of what music to search for. As Tim O'Reilly observed, "Obscurity is a far greater threat to authors and creative artists than piracy."
Fortunately, the last six months has brought significant progress on that matter. In addition to articles about where to find legal mp3's, Creative Commons licenses are becoming more common, and commercial sites are starting to offer more mp3 downloads for free. Also, pay services like iTunes (with all its flaws) at least offers a way for "orphaned music" to be sold once again.
Perhaps the best music finder I've found so far is Irate Radio, a "mp3 scraping" program that downloads mp3's continuously on your hard drive and plays them for you like a radio station. As you rate the tracks, the program uses collaborative filtering to give you additional mp3's to suit your tastes. The program is still a work in progress; the builtin player lacks many features, and the file management is still rudimentary, But the radio application does one thing extremely well: it maintains a steady flow of LEGAL mp3’s and exposes the user to hundreds (if not thousands) of songs that one would never hear about in Rolling Stone or on MTV or Amazon.com. Eventually, each mp3 entry will be hyperlinked to the musician's website, making it possible to buy directly from the artist. At the moment the IRATE database boasts 46,000 mp3 URL's, and even that will increase as it gains more listeners. (I recently published an interview with Anthony Jones, the lead developer of this project).
Internet economist Arnold Kling has proclaimed that Content is Crap. He writes:
Individual software writers, authors, and musicians produce something close to raw sewage. The computer programs, books, and music that people buy are closer to drinkable water...In reality, publishers are adding value, not simply stealing. They add value by filtering out content that people do not want and by having established mechanisms for collecting revenue and distributing royalties to authors...I am optimistic that the Internet provides the infrastructure that allows for new, more efficient forms of content intermediation. However, the key is to solve the problems of filtering and revenue generation. In other words, new intermediaries must add significant value and find a way to charge for it.
Always the economist, Kling sees revenue possibilities in "content clubs" that "provide content aggregation, recommendation, and annotation services." "Journalists," Kling argues, "would be paid by clubs, rather than by individual publications. For a consumer, joining a club will provide access to value-added services relative to online content."
He is addressing an economic question. I am addressing an artistic one. Can commercial recommendation/annotation services do a better job than noncommercial ones? Right now we have witnessed the complete corruption of media coverage of the arts; we have witnessed a chain of radio stations banishing a well-known country group from playlists for having a political opinion, our most popular media outlet giving endless coverage to its latest Harry Potter tie-in, and journalists filling up space and airtime to cover the Britney-Madonna kiss (let's see, what company produces their records?) (See Note). In some cases, commercial entities have successfully provided recommendation and annotation services. Amazon.com, for example, profits by collecting and displaying the comments and lists of readers. But if Amazon.com ever charged a fee for access to these user comments, my guess is that users would simply move on to other free sites. And the implicit assumption behind Amazon's recommendation system is that only commercial content merits user comments. We wouldn't, for example, see Amazon reviews of opsound musicians or gnu software. There are limits to how much credibility a commercial recommendation site can attain. (See note).
What we need are stronger informal recommendation networks. Already, music recommendation sites like Gods of Music provide reviews of online mp3's and provide great "leads" on hot new music. Also, Amazon.com is allowing users to post comments on songs available as free downloads and to create lists of favorites. Curiously, in an age where there are weblogs for just about everything, very few weblogs are dedicated to publicizing what bands are offering free mp3's and which of them are cool (see Note). Weblogs not only provide a million different opinions on what's important, they also can link to the actual mp3 being discussed.
Amidsts all this talk about crappy content, p2p, business models and technology, we have overlooked the most vital question: what is best for the soul of music? The answer is obvious: artists feed off the artistic creations of other artists; Mozart didn't find his inspiration by being locked up in a room; he gained inspiration from other musicians and paid homage to them in his own works; While his colleagues were working on sterile 12 tone compositions, Phillip Glass was borrowing from Eastern composition techniques shared by his teacher Ravi Shankar (producing among other things, the great opera Satyragraha). Walt Disney, founder of one of the world's great creative empires (now known as one of the most rigorous enforcers of IP law), now is revealed to have ripped off music from contemporaneous movies.
Humanity needs music. Music endows us with a vocabulary by which to express the full range of human emotion; it stirs us to dream about peace and sublime order in this turbulent, mechanized world. But music needs us too. It needs conduits to pass through, much as oxygen needs blood vessels to transport throughout the body. To love the music, you must share the music.
I am happy to report that now Mr. Meidana is a well-respected diplomat for the Albanian government in Italy.
With the existence of 3 Strikes You're Out Laws, a person convicted of 2 violent felonies would face mandatory life imprisonment in California if the third conviction was for sharing music. The US Supreme Court has already upheld the right of states to give mandatory life sentences for violent felons whose third conviction was of a minor nature.
Read Saul Hansell's Aiming at Pornography to Hit Music Piracy The contradiction in this propaganda is clear. RIAA argues that p2p is depriving the content creators of their fair buck. They are saying, if p2p survives, it will drive content creators out of business. Well, guess what, porn is a content business. By their reasoning, p2p would drive the porn industry out of business also. Either they concede that p2p is driving the porn industry out of business or they admit that file sharing can actually help a content industry.
One justification not discussed here is that recording studios offered access to expensive recording equipment. Indeed, it is probably true that music labels have state-of-the-art facilities and great sound engineers. However, equipment prices have been plummeting and the musicians can usually do a decent job of recording and mixing their own sound without needing professionals. On the other hand, it is still possible to pay "a la carte" for time at a recording studio. In fact, it may even be argued that that lower costs of sound reproduction and CD burning contributed more to decline of the music labels than p2p sharing.
At the point where a piece of music is "orphaned" from its copyright holder and the title is out of print, the only people who profit are antique and specialty dealers. They are filling in the gap between the public's interest in musical legacies and the market's indifference to preserving it. I think I bought the last available copy of Mitchell Froom's Key of Cool at a price 5 times what it costs for retail. But at least I will keep that copy safe (and convert it to mp3's for safekeeping). On a hopeful note though, it's likely that big labels will sell mp3's of their older out-of-print songs on sites like iTunes fairly soon.
Albini's essay is persuasive, but it's worth pointing out that he wrote this essay in 1994, and a lot has changed since then. Some have allege that Albini's estimates are exaggerated or are unrealistic today. Albini's point that music companies load a lot of expenses on the musician's side still applies, but companies today have smaller profit margins to work with and undoubtedly have curbed such excesses long ago. With smaller and even medium labels, these sort of excesses seem unthinkable today.
Audiogalaxy was put out of business by RIAA, and that's a shame, because it understood the key issues better than most Napster-like services. For example, it let users assign categories to music, and you could browse by similar artist. So for instance, if I were downloading songs by Sammi Cheng (a famous Chinese singer), I would also learn about a similar singer like Sun Yan Zi. Audiogalaxy let users share their lists and even to have "sharing clubs" where everyone could access the same mp3 recommendations. Of course, the underlying problem was that it had no way of preventing the system from "infection" by user-added material. It seemed unrealistic at the time to expect that musicians would voluntarily "opt in" to such a system. Now, however, bit torrent offers a solution to the bandwidth distribution problem and also allows a centralized location to store the stream (and assume the liability), thus ensuring enough controls on the content's provenance. I hope a service like mp3.com will use Audiogalaxy's ideas with their own customized bit torrent client, thus ensuring that the content's provenance is guaranteed. Not only would this kind of system be easier to use, but they would reduce mp3.com's bandwidth charges at the same time. On the other hand, it would mean having to admit that that mp3.com's Terms of Service prohibiting distribution of freely available content was absolutely ridiculous.
Downhillbattlehas done a stinging parody site that questions the very premise upon which itunes is based. It writes:
If Apple honestly believes that the iTunes system is fair for artists, we challenge them to display the artist's cut next to each song and let their customers decide:
The label on the CD case reads: "Legal Notice: License: This CD is property of record company and must be returned on demand. It is licensed for promotional use and has not been sold. The CD cannot be transferred without consent of record company. Use or retention of CD signifies acceptance of this license."
(Later, I looked more closely at Ms. Rothberg's website and realized that her site is quite personal and charming. Rothberg is not only an amazing musical talent, she apparently is quite a graphic artist. Unfortunately, because she already was signed by a major label (which apparently folded or something like that), she's been reluctant to put up shareable mp3's on the web (although she has put up wonderful Real Audio files like this). Hopefully great young talents like Rothberg will adapt to a world where music sharing becomes the accepted norm rather than the exception.
Tipping probably hinges on the ability and the desire to make micropayments to musicians. Clay Shirky cites Nick Szabo's concept of mental transaction costs as working against the idea of micropayments actually taking off (and why the subscription model may be more viable). This may be true with typical consumer goods and services, but artistic works are unique and often evoke personal responses. Certain art works attain a subjective value to a person far beyond what the market gives it. The most notorious example against voluntary payments is Stephen King's call for readers of his ebook to donate, or else he wouldn't continue writing the book. King ultimately declared the project a failure, announcing that he would stop writing the book. Does this "failure" argue against a voluntary payment system? Actually, King insisted on 75% participation, which was probably unrealistic to begin with. In fact, 46% of downloaders made a payment, which probably amounted to income of at least $50,000, hardly an amount to sneeze at. King's experiment proves that for bestselling novels by established writers, it still may be profitable to sell the book in dead-tree form. On the other hand, for writers without the name recognition of Mr. King (and that probably accounts for 99% of writers out there), this may still be a profitable way to launch an ebook. Also, the coercive aspect of King's contract with readers may have actually backfired. It may have diverted attention away from assessing the novel's value and towards the matter of whether Stephen King deserved the money he was making. Perhaps readers thought King was already rich and didn't need additional royalties. I may be more inclined to tip a writer I'd never heard of out of this sense that this artist somehow needs the money more and a tip might be more likely to make a difference.
One very interesting question is how the economic question varies according to the characteristics of the artistic genre. For example, with music, you often need several times to listen to it to decide if you like it. Therefore, the consumer is in the best position to assess economic value after obtaining the mp3, not before. For this reason, a voluntary method is really the only one that captures the user's valuation of the mp3 after hearing it (This also works by the way with shareware software). On the other hand, if you watch a movie on DVD or listen to a book on tape, it is really only necessary to hear or watch it once; in those cases, a business might have more reason to seek payment before the user has access to the work in question.
Dicola's critique of tipjars is very thoughtful and well worth reading in its entirety. DiCola's argument can be summarized like this:
- People tip not to compensate artist for past work but for expectation of future work This creates uncertainty and unwillingness to tip.
- For small tips, it's not worth the effort to tip.
- Success won't last long.
- No bellhops on the cover of Time--the question of status
- Short-shrifting the backstage crew.
- Might result in across-the-board lower compensation for artists. Free-rider problem.
1. past/futureThis past/future dichotomy is not important and not relevant. All business is predicated on selling goods for future production, and creative arts are especially this way. When director Barry Sonnenfeld was asked what his goals were, he replied (I paraphrase) "to make enough money from this film to bankroll my next." But spectators/listeners don't necessarily have future-based motivations. When I buy a hamburger, I think, in the past, this hamburger has satisfied my hunger, and I would pay $3 for that satisfaction again. We must distinguish between macroeconomic effects and microeconomic consumer choice. The effect of a purchase or donation may have some future macroeconomic effect (i.e., the better musician presumably receives more tips and is able to create more). But the perception of value by the music comes after the consumer has experienced it fully. When an individual is forced to pay for a music product before listening to it (on the supposition that it is good), the consumer is more inclined to stick with familiar artists and less inclined to award bonus contributions (contributions above the sticker price) for especially enriching music. By putting the value decision after downloading the music, the listener is able to be more adventurous and more willing to give bonus contributions to favorite pieces of music.
2. Not worth the effort: The inconvenience of tipping is pretty real, especially with so few artists relying on it. But "oneclick tipping" tipping could easily be built into mp3 portal sites like mp3.com, thus reducing the inconvenience factor. The "inconvenience problem" is intrinsic to all micropayments, so we could very easily say that this is an argument for rejecting non-tipping compensation schemes as well (iTunes). The problem with subscriptions (besides that of piracy and strict Terms of Service agreements for membership) is that it creates an intermediary to insist on conditions and a significant bite of the profit. Also, subscriptions usually entail exclusivity arrangements, which run counter to the premise that we love music in order to share it. Actually, this subscription model seems to work well for "recommendation clubs" that Arnold Kling talks about, but not for the content being recommended.
3. success won't last long In other words, popularity causes people to stop tipping because they perceive the artist as already successful (and not needing more money). First, I don't see this as evil per se. It is a far better system than what we have new, a system which delivers enormous profits to artists at the big labels and next to nothing for everybody else. Second, name recognition might actually produce more fans and therefore more tips. If you look at the tip roster at musiclink, you will see a lot of tips for Madonna, Counting Crows and other established artists. This seems to argue against the idea that we tip only nobodies. On the hand, it raises the legitimate question about whether fans will continue supporting their favorite musician over time. My sense is that they will.
4. No bellhops on Time magazine...or tipping demeans people and reduces the likelihood of making it big. Well, first, Time is run by a media conglomerate, so this is hardly a measure of financial success. But the goal of online tipping is not to create millionaires. It is to bring some money to unsigned musicians who have nothing coming in. Using the waitstaff analogy is dangerous (although I use it myself). Musicians have exalted positions in our society, so they are not merely providing a service. They bear more of a resemblance to the chef creating the meal. With food preparation, the chef needs a facility, a cashier, an accountant, busboys and a financier for the furniture and raw material. So we can justify the production/distribution system somewhat. But a musician, aside from occasional access to recording equipment, needs only his inspiration, a place to host/stream his music and a tipping service. Marketing, usability and visibility come into it, but in this age it is much easier for relative nobodies to experience their 15 minutes of fame (such as oddtodd.org or Star Wars kid).
When considering whether tipping corrodes the cultural value given to musicians, we first need to consider the harms done to unsigned musicians who don't make their music publicly available. Also, should we assume that releasing a CD enhances a musician's financial status or overall reputation? In many cases, they end up selling their own CD's or compromising their artistic values to appease their label. Perhaps this means making market-oriented music or accepting objectionable sponsorship; it may also mean upholding the copyright owner's commercial interest in preventing music sharing. So it's unclear to me whether tipping makes the status of musicians any worse than it is today. But one thing is clear: the economics of physical depletable consumer goods impose significant transaction costs on all parties involved, and online music hosting services expose listeners to a much greater variety of music.
5. Short-shrifting the backstage crew. This is probably true, but at least it gives the musician more control about what services deserve compensation and what arrangements are equitable. It merely shifts the responsibility from the company to the artists themselves, which may be good or bad. Currently, musicians receive "take-it-or-leave-it" contracts, and are not in a good position to negotiate. (The Future of Music has released an excellent guide to dangerously unfair music contracts).
6. Might resolve in lower compensations across the board (because of free-riders, insufficient amounts). First, I state above how the trend toward larger storage devices will result in more music sharing and awareness of more musicians by consumers. Economics aside, I consume much more music than I did three or four years ago (I am happier too about that). That creates additional tipping opportunities and more opportunites for "ancillary revenue streams". People point to PBS fundraising as an example of how tipping is unsustainable. But the example is misleading. You are asked to contribute to an amalgam of programs whereas you only watch Charlie Rose. But tipping a musician is different from tipping a "lineup of shows" or an "aggregation of content." It is for that one artist. I might not be inclined to give the local PBS a $50 donation even though I watch the show often enough to justify that. On the other hand, I might be more likely to contribute $3 to support the "Charlie Rose Show." The flipside of "mental transaction costs" is that micropayments reduce the perception of overall price, making donations seem more affordable. The unique quality of artistic works make us more loyal to the artist and more willing to sustain the burden of these mental transactions. Just to take an example, I often get personal replies from unsigned musicians after giving them a tip. Would you ever expect such a thing from a big label musician? Would iTunes make such contacts possible?
The problem we have here is that when music labels buy the copyright and control distribution, they discourage tipping or don't include information about it (for obvious reasons). At the other extreme, we have unlabeled musicians who give their stuff away for free (without even bothering to list a tipping mechanism). Musicians are too resigned to the idea that making money off their music is too difficult or impossible, and so they think, "well since I'm making no money anyway, I might as well offer it for free (or pay mp3.com to offer it for free). This scenario seems too bleak to me. Offering free distribution of their music is perfectly compatible with the idea of asking for tips. The problem is: musicians need to let their fans know how to do it!
The EFF lobbies about a lot of digital and privacy issues. If you haven't already, be sure to sign up for its newsletter. It's free and provides great information!
Compulsory licenses seems to be the "cleanest" solution, and it appears to have implemented in Canada with moderate success, but the approach has fundamental problems. First, it seems rather easy to game the system to make some songs appear more popular in popularity statistics. It seems to offer a lot of advantages to incumbents at the expense of emerging artists. Second, frequency of sharing may not correlate well with user's perception of value (although it may turn out to correlate well with what would have been actual sales figures). Regardless of whether we love the Spice Girls, their files are going to be shared more often than that of Simulacra. Second, a flat fee imposes a cap on potential profits and creates a reason for music businesses to seek "tax increases" on a regular basis. This is more of a "user fee" than a tax, but still establishing a "just rate" would probably result in prolonged battles in public. Just look for example at the ugly negotiations that Internet radio had with the music industry. Third, it's unclear how to measure user statistics when mp3's can be played or downloaded in many different contexts. Should we measure radio plays? What about music scraping applications? What about IRC? What about Internet radio (which plays to multiple listeners)? What about venues in which multiple people are listening? What about foreign listeners? What about car radio? What about PC makers who include freebies like a DVD with free music? I fear that any measuring system will lock us into one specific method of sharing, and it will reveal the folly of trying to micromanage an economy. That said, in lieu of any other payment system, even a "compulsory licensing" system seems preferable.
.Ironically, the implication of this argument is basically to uphold the idea that the world would be a better place if people didn't share RIAA mp3's at all. That is why I actually am not opposed to DRM. Why? It will make music lovers more willing to embrace music with the least restrictive terms of use. (It is what Clay Shirky calls substitutability of use; he writes: "Anyone offering content free gains an advantage that can't be beaten, only matched, because the competitive answer to free -- 'I'll pay you to read my weblog!' -- is unsupportable over the long haul."
According to Eric Alterman in his recent book : "When AOL took over TimeWarner, it also took over: Warner Brothers Pictures, Morgan Creek, New Regency, Warner Brothers Animation, a partial stake in Savoy Pictures, Little Brown & Co., Bulfinch, Back Bay, Time-Life Books, Oxmoor House, Sunset Books, Warner Books, the Book-of-the-Month Club, Warner/Chappell Music, Atlantic Records, Warner Audio Books, Elektra, Warner Brothers Records, Time-Life Music, Columbia House, a 40% stake in Seattle's Sub-Pop records, Time magazine, Fortune, Life, Sports Illustrated, Vibe, People, Entertainment Weekly, Money, In Style, Martha Stewart Living, Sunset, Asia Week, Parenting, Weight Watchers, Cooking Light, DC Comics, 49 percent of the Six Flags theme parks, Movie World and Warner Brothers parks, HBO, Cinemamax, Warner Brothers Television, partial ownership of Comedy Central, E!, Black Entertainment Television, Court TV, the Sega channel, the Home Shopping Network, Turner Broadcasting, the Atlanta Braves and Atlanta Hawks, World Champtionship Wrestling, Hanna-Barbera Cartoons, New Line Cinema, Fine Line Cinema, Turner Classic Movies, Turner Pictures, Castle Rock productions, CNN, CNN Headline News, CNN International, CNN/SI, CNN Airport Network, CNNfi, CNN Radio, TNT, WTBS and the Cartoon Network."
O'Oreilly makes the beautifully compelling point that "Free" is eventually replaced by a higher-quality paid service. In other words, the New Economy can accomodate providers of convenience; for example, if a souped up version of iRate allowed you to create sharelists with friends, burn CD's and provided a daily musical download that accomodated my unique musical tastes, I would consider subscribing. Of course, having guarantees that a media file is properly annotated and high quality is worth something, as is the timely delivery of information. I might enjoy hearing the inside scoop on what's cool and hot if I can read it 2 weeks before anyone else.
The other question is whether moderated sites with rating systems (like Slashdot) actually filters for quality effectively. For example, slashdot posts that take the usual open-source anti-Microsoft hardline receive higher ratings, and certain topics (like the infamous SCO v. Linux case) spin out of control. Already porn sites and Hot-or_Not websites have ranking systems that give prominence to well-ranked submissions. If a recommendation system contains rankings and threaded comments, unconscious demographic biases may skew it (though the results may still be interesting). Finally, it's doubtful whether Top 40's reveal that the song is good or that more people have simply heard it.
Lawrence Lessig's multimedia powerpoint lecture, Free Culture explores the Disney angle more thoroughly, and simply cannot be paraphrased. For those impatient with multimedia, here's an article about how Walt ripped off music from "Steamboat Bill".
Writer's Plug: I write a share-the-music weblog which discusses my recent finds. If anyone knows other music weblogs, let me know). So far, the best music recommendation list I've come across is Serena's Songbox, by Serena Matthews, also a gifted folk singer.
Robert Nagle (aka idiotprogrammer) is a fiction writer living in Houston, Texas. He runs the share-the-music weblog and used to run a asian culture and music weblog. He possesses not one iota of musical talent.
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Created: September 14, 2003
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