THE
INTERNET DEBACLE - AN ALTERNATIVE VIEW
by Janis Ian
Originally written for Performing Songwriter
Magazine, May 2002
* Shortly after this article was turned in,
Michael Greene resigned as president of NARAS.
"The Internet, and downloading, are here
to stay... Anyone who thinks otherwise should
prepare themselves to end up on the slagheap
of history." (Janis Ian during a live
European radio interview, 9-1-98) *Please
see author's note at end!
When I research an article, I normally
send 30 or so emails to friends and acquaintances
asking for opinions and anecdotes. I usually
receive 10-20 in reply. But not so on this
subject!
I sent 36 emails requesting opinions and facts
on free music downloading from the Net. I
stated that I planned to adopt the viewpoint
of devil's advocate: free Internet downloads
are good for the music industry and its artists.
I've received, to date, over 300 replies,
every single one from someone legitimately
"in the music business."
What's more interesting than the emails are
the phone calls. I don't know anyone at NARAS
(home of the Grammy Awards), and I know Hilary
Rosen (head of rhe Recording Industry Association
of America, or RIAA) only vaguely. Yet within
24 hours of sending my original email, I'd
received two messages from Rosen and four
from NARAS requesting that I call to "discuss
the article."
Huh. Didn't know I was that widely read.
Ms. Rosen, to be fair, stressed that she was
only interested in presenting RIAA's side
of the issue, and was kind enough to send
me a fair amount of statistics and documentation,
including a number of focus group studies
RIAA had run on the matter.
However, the problem with focus groups is
the same problem anthropologists have when
studying peoples in the field - the moment
the anthropologist's presence is known, everything
changes. Hundreds of scientific studies have
shown that any experimental group wants to
please the examiner. For focus groups, this
is particularly true. Coffee and donuts are
the least of the pay-offs.
The NARAS people were a bit more pushy. They
told me downloads were "destroying sales",
"ruining the music industry", and
"costing you money".
Costing me money? I don't pretend to be an
expert on intellectual property law, but I
do know one thing. If a music industry executive
claims I should agree with their agenda because
it will make me more money, I put my hand
on my wallet…and check it after they
leave, just to make sure nothing's missing.
Am I suspicious of all this hysteria? You
bet. Do I think the issue has been badly handled?
Absolutely. Am I concerned about losing friends,
opportunities, my 10th Grammy nomination by
publishing this article? Yeah. I am. But sometimes
things are just wrong, and when they're that
wrong, they have to be addressed.
The premise of all this ballyhoo is that the
industry (and its artists) are being harmed
by free downloading.
Nonsense. Let's take it from my personal experience.
My site (www.janisian.com ) gets an average
of 75,000 hits a year. Not bad for someone
whose last hit record was in 1975. When Napster
was running full-tilt, we received about 100
hits a month from people who'd downloaded
Society's Child or At Seventeen for free,
then decided they wanted more information.
Of those 100 people (and these are only the
ones who let us know how they'd found the
site), 15 bought CDs. Not huge sales, right?
No record company is interested in 180 extra
sales a year. But… that translates into
$2700, which is a lot of money in my book.
And that doesn't include the ones who bought
the CDs in stores, or who came to my shows.
Or take author Mercedes Lackey, who occupies
entire shelves in stores and libraries. As
she said herself: "For the past ten years,
my three "Arrows" books, which were
published by DAW about 15 years ago, have
been generating a nice, steady royalty check
per pay-period each. A reasonable amount,
for fifteen-year-old books. However... I just
got the first half of my DAW royalties...And
suddenly, out of nowhere, each Arrows book
has paid me three times the normal amount!...And
the only change during that pay-period was
that I had Eric put the first of my books
on the Free Library. There's an increase in
all of the books on that statement, actually,
and what it looks like is what I'd expect
to happen if a steady line of people who'd
never read my stuff encountered it on the
Free Library - a certain percentage of them
liked it, and started to work through my backlist,
beginning with the earliest books published.
The really interesting thing is, of course,
that these aren't Baen books, they're DAW---another
publisher---so it's 'name loyalty' rather
than 'brand loyalty.' I'll tell you what,
I'm sold. Free works." I've found that
to be true myself; every time we make a few
songs available on my website, sales of all
the CDs go up. A lot.
And I don't know about you, but as an artist
with an in-print record catalogue that dates
back to 1965, I'd be thrilled to see sales
on my old catalogue rise.
Now, RIAA and NARAS, as well as most of the
entrenched music industry, are arguing that
free downloads hurt sales. (More than hurt
- they're saying it's destroying the industry.)
Alas, the music industry needs no outside
help to destroy itself. We're doing a very
adequate job of that on our own, thank you.
Here are a few statements from the RIAA's
website:
1
"Analysts report that just one of the
many peer-to-peer systems in operation is
responsible for over 1.8 billion unauthorized
downloads per month". (Hilary B. Rosen
letter to the Honorable Rick Boucher, Congressman,
February 28, 2002)
2
"Sales of blank CD-R discs have…grown
nearly 2 1⁄2 times in the last two years…if
just half the blank discs sold in 2001 were
used to copy music, the number of burned CDs
worldwide is about the same as the number
of CDs sold at retail." (Hilary B. Rosen
letter to the Honorable Rick Boucher, Congressman,
February 28, 2002)
3
"Music sales are already suffering from
the impact…in the United States, sales
decreased by more than 10% in 2001."(Hilary
B. Rosen letter to the Honorable Rick Boucher,
Congressman, February 28, 2002)
4
"In a recent survey of music consumers,
23%…said they are not buying more music
because they are downloading or copying their
music for free."(Hilary B. Rosen letter
to the Honorable Rick Boucher, Congressman,
February 28, 2002)
Let's take these points one by one, but before
that, let me remind you of something: the
music industry had exactly the same response
to the advent of reel-to-reel home tape recorders,
cassettes, DATs, minidiscs, VHS, BETA, music
videos ("Why buy the record when you
can tape it?"), MTV, and a host of other
technological advances designed to make the
consumer's life easier and better. I know
because I was there.
The only reason they didn't react that way
publicly to the advent of CDs was because
they believed CD's were uncopyable. I was
told this personally by a former head of Sony
marketing, when they asked me to license Between
the Lines in CD format at a reduced royalty
rate. ("Because it's a brand new technology.")
1
Who's to say that any of those people would
have bought the CD's if the songs weren't
available for free? I can't find a single
study on this, one where a reputable surveyor
such as Gallup actually asks people that question.
I think no one's run one because everyone
is afraid of the truth - most of the downloads
are people who want to try an artist out,
or who can't find the music in print.
And if a percentage of that 1.8 billion is
because people are downloading a current hit
by Britney or In Sync, who's to say it really
hurt their sales? Soft statistics are easily
manipulated. How many of those people went
out and bought an album that had been over-played
at radio for months, just because they downloaded
a portion of it?
2
Sales of blank CDs have grown? You bet. I
bought a new Vaio in December (ironically
enough, made by Sony), and now back up all
my files onto CD. I go through 7-15 CD's a
week that way, or about 500 a year. Most new
PC's come with XP, which makes backing up
to CD painless; how many people are doing
what I'm doing? Additionally, when I buy a
new CD, I make a copy for my car, a copy for
upstairs, and a copy for my partner. That's
three blank discs per CD. So I alone account
for around 750 blank CDs yearly.
3
I'm sure the sales decrease had nothing to
do with the economy's decrease, or a steady
downward spiral in the music industry, or
the garbage being pushed by record companies.
Aren't you? There were 32,000 new titles released
in this country in 2001, and that's not including
re-issues, DIY's , or smaller labels that
don't report to SoundScan. Our "Unreleased"
series, which we haven't bothered SoundScanning,
sold 6,000+ copies last year. A conservative
estimate would place the number of "newly
available" CD's per year at 100,000.
That's an awful lot of releases for an industry
that's being destroyed. And to make matters
worse, we hear music everywhere, whether we
want to or not; stores, amusement parks, highway
rest stops. The original concept of Muzak
(to be played in elevators so quietly that
its soothing effect would be subliminal) has
run amok. Why buy records when you can learn
the entire Top 40 just by going shopping for
groceries?
4
Which music consumers? College kids who can't
afford to buy 10 new CDs a month, but want
to hear their favorite groups? When I bought
my nephews a new Backstreet Boys CD, I asked
why they hadn't downloaded it instead. They
patiently explained to their senile aunt that
the download wouldn't give them the cool artwork,
and more important, the video they could see
only on the CD.
Realistically, why do most people download
music? To hear new music, or records that
have been deleted and are no longer available
for purchase. Not to avoid paying $5 at the
local used CD store, or taping it off the
radio, but to hear music they can't find anywhere
else. Face it - most people can't afford to
spend $15.99 to experiment. That's why listening
booths (which labels fought against, too)
are such a success.
You can't hear new music on radio these days;
I live in Nashville, "Music City USA",
and we have exactly one station willing to
play a non-top-40 format. On a clear day,
I can even tune it in. The situation's not
much better in Los Angeles or New York. College
stations are sometimes bolder, but their wattage
is so low that most of us can't get them.
One other major point: in the hysteria of
the moment, everyone is forgetting the main
way an artist becomes successful - exposure.
Without exposure, no one comes to shows, no
one buys CDs, no one enables you to earn a
living doing what you love. Again, from personal
experience: in 37 years as a recording artist,
I've created 25+ albums for major labels,
and I've never once received a royalty check
that didn't show I owed them money. So I make
the bulk of my living from live touring, playing
for 80-1500 people a night, doing my own show.
I spend hours each week doing press, writing
articles, making sure my website tour information
is up to date. Why? Because all of that gives
me exposure to an audience that might not
come otherwise. So when someone writes and
tells me they came to my show because they'd
downloaded a song and gotten curious, I am
thrilled!
Who gets hurt by free downloads? Save a handful
of super-successes like Celine Dion, none
of us. We only get helped.
But not to hear Congress tell it. Senator
Fritz Hollings, chairman of the Senate Commerce
Committee studying this, said "When Congress
sits idly by in the face of these [file-sharing]
activities, we essentially sanction the Internet
as a haven for thievery", then went on
to charge "over 10 million people"
with stealing. [Steven Levy, Newsweek 3/11/02].
That's what we think of consumers - they're
thieves, out to get something for nothing.
Baloney. Most consumers have no problem paying
for entertainment. One has only to look at
the success of Fictionwise.com and the few
other websites offering books and music at
reasonable prices to understand that. If the
music industry had a shred of sense, they'd
have addressed this problem seven years ago,
when people like Michael Camp were trying
to obtain legitimate licenses for music online.
Instead, the industry-wide attitude was "It'll
go away". That's the same attitude CBS
Records had about rock 'n' roll when Mitch
Miller was head of A&R. (And you wondered
why they passed on The Beatles and The Rolling
Stones.)
I don't blame the RIAA for Holling's attitude.
They are, after all, the Recording Industry
Association of America, formed so the labels
would have a lobbying group in Washington.
(In other words, they're permitted to make
contributions to politicians and their parties.)
But given that our industry's success is based
on communication, the industry response to
the Internet has been abysmal. Statements
like the one above do nothing to help the
cause.
Of course, communication has always been the
artist's job, not the executives. That's why
it's so scary when people like current NARAS
president Michael Greene begin using shows
like the Grammy Awards to drive their point
home.
Grammy viewership hit a six-year low in 2002.
Personally, I found the program so scintillating
that it made me long for Rob Lowe dancing
with Snow White, which at least was so bad
that it was entertaining. Moves like the ridiculous
Elton John-Eminem duet did little to make
people want to watch again the next year.
And we're not going to go into the Los Angeles
Times' Pulitzer Prize-winning series on Greene
and NARAS, where they pointed out that MusiCares
has spent less than 10% of its revenue on
disbursing emergency funds for people in the
music industry (its primary purpose), or that
Greene recorded his own album, pitched it
to record executives while discussing Grammy
business, then negotiated a $250,000 contract
with Mercury Records for it (later withdrawn
after the public flap). Or that NARAS quietly
paid out at least $650,000 to settle a sexual
harassment suit against him, a portion of
which the non-profit Academy paid. Or that
he's paid two million dollars a year, along
with "perks" like his million-dollar
country club membership and Mercedes. (Though
it does make one wonder when he last entered
a record store and bought something with his
own hard-earned money.)
Let's just note that in his speech he told
the viewing audience that NARAS and RIAA were,
in large part, taking their stance to protect
artists. He hired three teenagers to spend
a couple of days doing nothing but downloading,
and they managed to download "6,000 songs".
Come on. For free "front-row seats"
at the Grammys and an appearance on national
TV, I'd download twice that amount! But…who's
got time to download that many songs? Does
Greene really think people out there are spending
twelve hours a day downloading our music?
If they are, they must be starving to death,
because they're not making a living or going
to school. How many of us can afford a T-1
line?
This sort of thing is indicative of the way
statistics and information are being tossed
around. It's dreadful to think that consumers
are being asked to take responsibility for
the industry's problems, which have been around
far longer than the Internet. It's even worse
to think that the consumer is being told they
are charged with protecting us, the artists,
when our own industry squanders the dollars
we earn on waste and personal vendettas.
Greene went on to say that "Many of the
nominees here tonight, especially the new,
less-established artists, are in immediate
danger of being marginalized out of our business."
Right. Any "new" artist who manages
to make the Grammys has millions of dollars
in record company money behind them. The "real"
new artists aren't people you're going to
see on national TV, or hear on most radio.
They're people you'll hear because someone
gave you a disc, or they opened at a show
you attended, or were lucky enough to be featured
on NPR or another program still open to playing
records that aren't already hits.
As to artists being "marginalized out
of our business," the only people being
marginalized out are the employees of our
Enron-minded record companies, who are being
fired in droves because the higher-ups are
incompetent.
And it's difficult to convince an educated
audience that artists and record labels are
about to go down the drain because they, the
consumer, are downloading music. Particularly
when they're paying $50-$125 apiece for concert
tickets, and $15.99 for a new CD they know
costs less than a couple of dollars to manufacture
and distribute.
I suspect Greene thinks of downloaders as
the equivalent of an old-style television
drug dealer, lurking next to playgrounds,
wearing big coats and whipping them open for
wide-eyed children who then purchase black
market CD's at generous prices.
What's the new industry byword? Encryption.
They're going to make sure no one can copy
CDs, even for themselves, or download them
for free. Brilliant, except that it flouts
previous court decisions about blank cassettes,
blank videotapes, etc. And it pisses people
off.
How many of you know that many car makers
are now manufacturing all their CD players
to also play DVD's? or that part of the encryption
record companies are using doesn't allow your
store-bought CD to be played on a DVD player,
because that's the same technology as your
computer? And if you've had trouble playing
your own self-recorded copy of O Brother Where
Art Thou in the car, it's because of this
lunacy.
The industry's answer is to put on the label:
"This audio CD is protected against unauthorized
copying. It is designed to play in standard
audio CD players and computers running Windows
O/S; however, playback problems may be experienced.
If you experience such problems, return this
disc for a refund."
Now I ask you. After three or four experiences
like that, shlepping to the store to buy it,
then shlepping back to return it (and you
still don't have your music), who's going
to bother buying CD's?
The industry has been complaining for years
about the stranglehold the middle-man has
on their dollars, yet they wish to do nothing
to offend those middle-men. (BMG has a strict
policy for artists buying their own CDs to
sell at concerts - $11 per CD. They know very
well that most of us lose money if we have
to pay that much; the point is to keep the
big record stores happy by ensuring sales
go to them. What actually happens is no sales
to us or the stores.) NARAS and RIAA are moaning
about the little mom & pop stores being
shoved out of business; no one worked harder
to shove them out than our own industry, which
greeted every new Tower or mega-music store
with glee, and offered steep discounts to
Target and WalMart et al for stocking CDs.
The Internet has zero to do with store closings
and lowered sales.
And for those of us with major label contracts
who want some of our music available for free
downloading… well, the record companies
own our masters, our outtakes, even our demos,
and they won't allow it. Furthermore, they
own our voices for the duration of the contract,
so we can't even post a live track for downloading!
If you think about it, the music industry
should be rejoicing at this new technological
advance! Here's a fool-proof way to deliver
music to millions who might otherwise never
purchase a CD in a store. The cross-marketing
opportunities are unbelievable. It's instantaneous,
costs are minimal, shipping non-existant…a
staggering vehicle for higher earnings and
lower costs. Instead, they're running around
like chickens with their heads cut off, bleeding
on everyone and making no sense. As an alternative
to encrypting everything, and tying up money
for years (potentially decades) fighting consumer
suits demanding their first amendment rights
be protected (which have always gone to the
consumer, as witness the availability of blank
and unencrypted VHS tapes and casettes), why
not take a tip from book publishers and writers?
Baen Free Library is one success story. SFWA
is another. The SFWA site is one of the best
out there for hands-on advice to writers,
featuring in depth articles about everything
from agent and publisher scams, to a continuously
updated series of reports on various intellectual
property issues. More important, many of the
science fiction writers it represents have
been heavily involved in the Internet since
its inception. Each year, when the science
fiction community votes for the Hugo and Nebula
Awards (their equivalent of the Grammys),
most of the works nominated are put on the
site in their entirety, allowing voters and
non-voters the opportunity to peruse them.
Free. If you are a member or associate (at
a nominal fee), you have access to even more
works. The site is also full of links to members'
own web pages and on-line stories, even when
they aren't nominated for anything. Reading
this material, again for free, allows browsers
to figure out which writers they want to find
more of - and buy their books. Wouldn't it
be nice if all the records nominated for awards
each year were available for free downloading,
even if it were only the winners? People who
hadn't bought the albums might actually listen
to the singles, then go out and purchase the
records.
I have no objection to Greene et al trying
to protect the record labels, who are the
ones fomenting this hysteria. RIAA is funded
by them. NARAS is supported by them. However,
I object violently to the pretense that they
are in any way doing this for our benefit.
If they really wanted to do something for
the great majority of artists, who eke out
a living against all odds, they could tackle
some of the real issues facing us:
•
The normal industry contract is for seven
albums, with no end date, which would be considered
at best indentured servitude (and at worst
slavery) in any other business. In fact, it
would be illegal.
•
A label can shelve your project, then extend
your contract by one more album because what
you turned in was "commercially or artistically
unacceptable". They alone determine that
criteria.
•
Singer-songwriters have to accept the "Controlled
Composition Clause" (which dictates that
they'll be paid only 75% of the rates set
by Congress in publishing royalties) for any
major or subsidiary label recording contract,
or lose the contract. Simply put, the clause
demanded by the labels provides that a) if
you write your own songs, you will only be
paid 3/4 of what Congress has told the record
companies they must pay you, and b) if you
co-write, you will use your "best efforts"
to ensure that other songwriters accept the
75% rate as well. If they refuse, you must
agree to make up the difference out of your
share.
•
Congressionally set writer/publisher royalties
have risen from their 1960's high (2 cents
per side) to a munificent 8 cents.
•
Many of us began in the 50's and 60's; our
records are still in release, and we're still
being paid royalty rates of 2% (if anything)
on them.
•
If we're not songwriters, and not hugely successful
commercially (as in platinum-plus), we don't
make a dime off our recordings. Recording
industry accounting procedures are right up
there with films.
•
Worse yet, when records go out-of-print, we
don't get them back! We can't even take them
to another company. Careers have been deliberately
killed in this manner, with the record company
refusing to release product or allow the artist
to take it somewhere else.
•
And because a record label "owns"
your voice for the duration of the contract,
you can't go somewhere else and re-record
those same songs they turned down.
•
And because of the re-record provision, even
after your contract is over, you can't record
those songs for someone else for years, and
sometimes decades.
•
Last but not least, America is the only country
I am aware of that pays no live performance
royalties to songwriters. In Europe, Japan,
Australia, when you finish a show, you turn
your set list in to the promoter, who files
it with the appropriate organization, and
then pays a small royalty per song to the
writer. It costs the singer nothing, the rates
are based on venue size, and it ensures that
writers whose songs no longer get airplay,
but are still performed widely, can continue
receiving the benefit from those songs.
Additionally, we should be speaking up, and
Congress should be listening. At this point
they're only hearing from multi-platinum acts.
What about someone like Ani Difranco, one
of the most trusted voices in college entertainment
today? What about those of us who live most
of our lives outside the big corporate system,
and who might have very different views on
the subject?
There is zero evidence that material available
for free online downloading is financially
harming anyone. In fact, most of the hard
evidence is to the contrary.
Greene and the RIAA are correct in one thing
- these are times of great change in our industry.
But at a time when there are arguably only
four record labels left in America (Sony,
AOL/Time/Warner, Universal, BMG - and where
is the RICO act when we need it?)… when
entire genres are glorifying the gangster
mentality and losing their biggest voices
to violence…when executives change positions
as often as Zsa Zsa Gabor changed clothes,
and "A&R" has become a euphemism
for "Absent & Redundant"…
well, we have other things to worry about.
It's absurd for us, as artists, to sanction
- or countenance - the shutting down of something
like this. It's sheer stupidity to rejoice
at the Napster decision. Short-sighted, and
ignorant.
Free exposure is practically a thing of the
past for entertainers. Getting your record
played at radio costs more money than most
of us dream of ever earning. Free downloading
gives a chance to every do-it-yourselfer out
there. Every act that can't get signed to
a major, for whatever reason, can reach literally
millions of new listeners, enticing them to
buy the CD and come to the concerts. Where
else can a new act, or one that doesn't have
a label deal, get that kind of exposure?
Please note that I am not advocating indiscriminate
downloading without the artist's permission.
I am not saying copyrights are meaningless.
I am objecting to the RIAA spin that they
are doing this to protect "the artists",
and make us more money. I am annoyed that
so many records I once owned are out of print,
and the only place I could find them was Napster.
Most of all, I'd like to see an end to the
hysteria that causes a group like RIAA to
spend over 45 million dollars in 2001 lobbying
"on our behalf", when every record
company out there is complaining that they
have no money.
We'll turn into Microsoft if we're not careful,
folks, insisting that any household wanting
an extra copy for the car, the kids, or the
portable CD player, has to go out and "license"
multiple copies.
As artists, we have the ear of the masses.
We have the trust of the masses. By speaking
out in our concerts and in the press, we can
do a great deal to damp this hysteria, and
put the blame for the sad state of our industry
right back where it belongs - in the laps
of record companies, radio programmers, and
our own apparent inability to organize ourselves
in order to better our own lives - and those
of our fans. If we don't take the reins, no
one will.
Sources:
Baenbooks.com, BMG Records, Chicago Tribune,
CNN.com, Congressional Record, Eonline.com,
Grammy.com, LATimes.com, Newsweek, Radiocrow.com,
RIAA.org, personal communications
* for more information on the Free Library,
go to www.baen.com/library .Read Janis' follow
up to this article: FALLOUT - a follow up
to The Internet Debacle
This article has been revised to ensure factual
accuracy.
Author's note: You are welcome to post this
article on any cooperating website, or in
any print magazine, although we request that
you include a link directed to
http://www.janisian.com
and writer's credit!
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