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Music: Start Up, Don’t Strike Down

· August 7, 2012

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The Oatmeal recently published an excellent cartoon: “The state of the music industry.”  In four panels, the cartoonist illustrates the change from (1) the record labels as a gatekeeper with total control, (2) the massive disruption of Napster and filesharing services that musicians initially opposed due to their minor royalties being lost, (3) various Internet services providing content online legally for a small fee with labels focused on the continued high prices of concert tickets, and (4) a future where musicians can transact directly with their fans, using the example of $5 for an album — a price that is far less than the $19.99 consumers had to pay back in the heyday of CDs, but far more than the share artists used to receive, because there would be no middlemen each taking a cut.  And yet, this final ideal panel of “Where it needs to go from here” is not as far off as one might think.  There already are websites that facilitate these artist-to-fan transactions, and the artist keeps most, if not all, of the money from the sale.  Below are a few examples:

  • Humble Bundle encourages fans to pay what they want for DRM-free files, and provides the option to send a portion of the money to charity.  The latest bundle, which is open until August 9, features music from They Might Be Giants, Jonathan Coulton, Go, and others.  The EFF had a great writeup of the many advantages of this unique initiative.
  • Moontoast is another site focused on social commerce.  The composer of the Dark Knight soundtrack, Hans Zimmer, recently used the site to sell Aurora, a work he composed after the recent shootings in Colorado, for a minimum of 10 cents.
  • NoiseTrade is a site where artists share their music for free in return for data about where their fans are located, with an option to digitally “tip” the artists through PayPal.  One of the most popular downloads is the one that led me to discover the site – a fantastic, undeniably transformative acoustic cover of LMFAO’s “Sexy and I Know It” by a teenage musician named Noah from South Carolina.
  • Gumroad is a platform for people to sell like they share, and facilitates creation of direct transactions.  Established artists like my favorite songwriter Brendan Benson have used the site.

As a musician, I’m often asked to explain my defense of the Internet.  In fact, I don’t think my views should have to be perceived as irreconcilable.  The above-listed services—which are just a few of the many startups and don’t include larger sites like iTunes, Spotify, and Amazon MP3—show that there are many more opportunities for artists to reach fans, and make a profit, than before the Internet.  The music industry had been disrupted repeatedly by new media, even before the Internet.  Each new format was ultimately a new market, even as it complicated the monopolistic success of the old market.  The Internet has proved to be particularly revolutionary and thus particularly challenging, because it allows for proliferation of copying and distributing music files for free.  This frustrates the industries’ complete control, but it comes with a lot of benefits for artists, who can now connect with fans directly.

Recently, due to this frustration, the music industry has been focused on lobbying for legislation, such as SOPA and PIPA, which were intended to “stop online piracy” and “prevent real online threats to economic creativity and theft of IP.”  However, the RIAA allegedly conceded in a recently leaked report that the SOPA/PIPA “legislation [was] not likely to have been effective tool for music.”  So not only is there uncertainty as to the extent of the problem, given the many opportunities for online commerce, but there is apparently uncertainty by the RIAA itself as to the success of that legislative fix.

That same leaked report contained talking points on a “six strikes plan” for industry cooperation with Internet Service Providers (ISPs), which is also a potential threat to public use of the Internet, albeit by private entities.  The program will be run by the recently-created Center for Copyright Information (CCI), and was negotiated by ISPs and entertainment industry stakeholders, with input from enforcement offices of the Obama administration, and without the feedback of the public customers who would be affected by (and have no choice but to be subsidizing) this project.  The CCI has made admirable efforts toward having a relatively balanced advisory board, including Public Knowledge’s Gigi Sohn.  The board will work toward developing a tiered Copyright Alert System with steps including copyright education, acknowledgement, and mitigation measures, which according to the CCI’s Memorandum of Understanding [PDF] may involve “restriction of the Subscriber’s Internet access for some reasonable period of time.”  The program seems to effectively presume guilt rather than innocence, and allow for penalties from mere accusations of infringement.  This is concerning because the program seems to lack due process to deal with allegations of “infringement.”  Incentives appear skewed to penalize and potentially even disconnect Internet access first and ask questions second.  For more details, check out Sherwin Siy’s in-depth analysis, and Eric Goldman and Corynne McSherry’s critique of the program and how it was developed.

Other countries already have three strikes regimes.  Yesterday, it was reported that France’s controversial three strikes agency, Hadopi, may be abolished.  Aurelie Filipetti, the French Government’s new culture minister, referred to the three-strikes penalty as “disproportionate,” and added:  “€12 million per year and 60 officials; that’s an expensive way to send 1 million emails,” which essentially seems to be the main outcome of the three-year campaign.  Filipetti said: “Hadopi has not fulfilled its mission of developing legal downloads.  I prefer to reduce the funding of things that have not been proven to be useful.”  Even after three years, there was apparently no evidence of reduction in illegal filesharing or increase in legal sales.

France’s experience should be instructive to U.S. efforts at a similar program.  Advocates of industry-protecting legislation, and private measures like the CCI initiative, should rethink draconian enforcement measures given the dearth of evidence of harm, and the wealth of opportunities for artists to thrive online.  There should be more focus on developing and strengthening legitimate ways to profit on the Internet, rather than expending time and resources fighting alleged “piracy.”

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The Internet enables the free exchange of ideas and content that, in turn, promote creativity, commerce, and innovation. However, a balanced approach to copyright, trademarks, and patents is critical to this creative and entrepreneurial spirit the Internet has fostered. Consequently, it is our belief that the intellectual property system should encourage innovation, while not impeding new business models and open-source developments.