The New Value of Music: From TieDye to Terabytes

By October 14, 2011 Blog 5 Comments

written by Dave Hodge, Creative Director/ Partner, Finger Music

I’ve been hearing a lot of discontent and concern from many of my musician friends over Spotify, and all things file sharing. This of course, originates primarily with the epidemic of people thinking that music is as free as the air we breathe, with a complete disregard for the livelihood of the musicians who’ve toiled over it, not to mention hindering their ability to make money to record their next record that their fans will be so eagerly awaiting to download for free again.

Throughout the recent history of music, there have been constant reinventions around copyright and performing rights. Take the advent of the photocopier, for example. This crushed the sheet music business, while the recording business was blossoming. A complete shift in the structure of the music industry. Then take the cassette player, which made possible the unregulated re-recording of copy-written material. Again a major shift, and a big red flag for record labels in the way their revenue stream was structured. But through the status quo came a band with an open minded inventiveness, who foreshadowed the new model of our current reality’s addiction to free downloads. They were enormously successful because of it..The Grateful Dead.

Please do keep reading, I’m not stoned. Yes, a successful model embracing what we now see as a problem, digital downloads, was intentionally created 40 odd years ago, back when you were in the womb and your mom was smoking a joint. (Or vice versa, depending on how old you are). Let me explain…At their concerts, the Dead set up huge areas in front of the soundboard, where people were encouraged to bring high quality recording equipment -back then, cassette recorders and good quality mics- and record their concerts, for FREE. Thus began a huge market of  bootleg tapes for their toasty brained followers, from which none of the proceeds went to the band.

Recorded music, to them, was a marketing tool. They wanted people to have it for free. I myself had a stash of them, so to speak. The result: absolutely enormous concert tours, generating hundreds of millions worth in ticket and merchandise sales (it seems Live Nation was paying attention). This was the pre-internet era, so the bootleg culture they allowed to happen can also be seen as a pioneering form of social media. Word of mouth and the creation of countless new fans listening to Grateful Dead bootleg tapes recorded around the world (in comparison, free downloads) without spending a cent on that aspect of their publicity, was essentially a form of unplugged Twitter. The Grateful Dead also created a massive mailing list, millions strong (one of the first bands -if not the first- to do so in such a personal way), again pre-internet, which also enhanced their loyalty based business model.
My point to all this comes back to the Spotify and online music ‘situation’ that dominates music today. Of course, people still did buy the Grateful Dead’s studio albums, but then again, that’s also the case with today’s current model. Not 100% of music is downloaded, and in 2010 roughly 50% of music was still purchased on CD, according to Digital Music News: http://tinyurl.com/3ekqweg

Now I myself can proudly say I have never downloaded a song for free for my listening pleasure (I have in relation to work, to research genres, but nothing I would listen to on my own), until now. I’ve recently discovered Spotify, the merits of which have been preached to me for ages from my friends in London (it was released there 2 years prior to the US), and I can see why. On the contrary I have heard it viciously cursed by artists who have done the math for the current royalty structure. They’ve figured that after many millions of plays, the royalty would amount to something equivalent to minimum wage. Don’t get me wrong, even Jerry Garcia’s joint would go limp with that kind of news. Maybe I’m being optimistic, but here’s what I think is happening.

The record industry has consented to this, as have a massive number of artists. Through DRM (Digital Rights Management) an artist can opt out of having their content on Spotify. But think of it this way… Spotify is essentially a Socialist based structure in which everyone pays the same thing, in great numbers, while they are essentially killing the mp3 as a means of sharing music in an untraceable way. All this music is streaming, and exists on ‘the cloud’. You have access to what seems like, everything. What a deal. But the deal that is happening behind the scenes, is to regain control of content. The mp3 is becoming obsolete.

So once this essentially Socialist (republicans, relax) system has everyone hooked, the mp3 is virtually replaced by the cloud. What you have then, are millions and millions of people with essentially bootleg tapes that someone else has full control over, and many, many things become possible. Raising user fees. Free Tweeting and Facebook advertising for artists. Accurate statistical data. (Wait… accurate royalty payments?? That has never existed, it’s always been based on audits and estimates). And if artist rights organizations and we artists ourselves are smart, we will stay on them like glue to start raising royalty rates. In the next decade, someone’s about to make a ton of money, and we need to make sure what happened in the 60′s and 70′s doesn’t happen again… where it was the bands MANAGERS that ran off in the goldfish boots with the lions share!

I really do believe that this is the best thing that’s happened to the music industry since the first mp3 reared it’s ugly head. Just give it some time, and if you’re an artist, get involved. Don’t sit back and complain that the world is going to hell. Have a deeper look into what the Grateful Dead did, even if you don’t like their music (I myself, am well over it). Besides frequenting the cover of High Times magazine, they were brilliant businessmen who through forward thinking and open-mindedness, have a lot to teach us about rethinking our current wheel.

5 Comments

  • Bird York says:

    Sadly, I think it’s Spotify and the advertisers who are poised to gain here. If you are an artist who does not want to spend months on tour due to having a family, or a whole host of other concerns like being a solo artist the expense of having to pay for a whole band— just having folks listen to you for next to nothing isn’t really going to bring you anything. As far as spotify raising their fees down the road…look what happened when Netflix decided to up their subscription price. Or when the LA WEEKLY wanted to start charging for their paper. EVERYONE backed off of them. I have no idea what the solution is, but I personally do not think Spotify is it. Most of my fans just go to youtube to hear all of my music as people have thought it a good idea to put up most every piece of music I have ever recorded up there. I found a song of mine that isn’t even for sale on some guy’s page thru FB/ ilike/playlist. He was using it as a lure to get people to his page to sell his products. I have to write a whole document and SNAIL MAIL it to Playlist to have it removed.
    The other thing is….it takes A LOT of energy to constantly interact with your internet fan base–the people listening for free. Time I’d rather spend writing and making things then being a daily publicity dept or pay a company 2 grand a month to stay on top of the influx of folks who need to be stimulated regularly to keep their attention (in hopes that they will actually purchase the next record). I heard Prince hires someone to keep the music he owns off of free sites. That kind of service and tattoo removal might just be the next big thing.

    • I was hoping someone would post something on this side of the argument, even better it’s you Birdy :) I also agree with your point.

      But in your case, you’ve always done particularly well with licensing and placements… Oscar nominated, no less. My point was, that in this great shift that’s happening whether we like it or not, there are ways to break through and bring in revenue using social media and having your music being accessible to millions, and you’ve already figured some of that out. It will continue to evolve. I don’t think buying records is dead forever, or else all the labels would pack up shop and get into the wine business. I just think it’s in it’s infancy.. and if artists and royalty collection agencies make sure they are very much involved in fighting for their rights, I think there’s plenty of room for new thinking, much like the Grateful Dead did, when everyone else was doing it differently. The devaluation of music as a whole is a whole other can o’ worms. Big one. But also, potentially millions more people will be, and are, your fans, which gives you much more leverage to bring in revenue from other things than having it simply sit on a shelf. Which you already do. I always think of you as being extremely good at that. There are more ways, and more that no one’s thought of yet, and I think we need to embrace it and stay open to it. (and Prince… yeah it’d be nice to make a fortune of royalties and all his amazing old records to pick and choose what you’d like to do. I’d love that! Talented man, he is.)

  • Check out the recent article published on eMarketer: “Are Music Listeners Ready to Move to the Cloud?” http://www.emarketer.com/Article.aspx?R=1008645. It’s clear free music streaming cultivates a community to discover new artists and songs, turning music listeners into consumers.
    Recently Vimeo launched Vimeo Music Store (http://vimeo.com/musicstore), a new service that makes it easy for creators to discover and download music for their videos. Just as Vimeo created a great democratization for the independent film industry (filmmakers got instant access to wide distribution and peer recognition by uploading to Vimeo), Music Store has the potential to create the same type of democratization to the music independent music industry through video creators using their songs — and videos going viral. Creators LOVE free and being on the right side of legal.

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