Music Piracy and MP3's, an ethical discussion (1 Viewer)

[Andrew 'Ange Hamm' Hamm]

You've got to realize that the majority of artists don't get screwed at all by piracy, because the record companies give them squat anyway. It's the big name artists that already have millions and millions that complain about it. The same big names that can make up to and over a million dollars per stop on a tour.

This could actually be father from the truth, but not by much.

Trust me, while the little guy may not be complaining much about music piracy, the huge lower-middle-class of the recording industry is screaming, because they are getting screwed out of the only guaranteed income in their contracts: royalties. We hear from the big names because they are big names. And there are two points about the "big names that can make up to and over a million dollars per stop on a tour." One: Do you think everyone on MTV is making Janet Jackson money? Where did you get these ridiculous figures? And Two: the amount of money these artists are making has NO CONNECTION with the issue at hand, which is that piracy is theft. Stealing from the rich is still stealing.

 

[TheoGB]

Actually everything I've read and heard suggests that touring is big money nowadays. This wasn't true - I believe Metallica were somewhat of an anomaly 10-15 years ago by making a profit from their non-stop touring.

However Blur have commented how playing big venues in Japan was one of the only ways they stayed aflot in their early ('92ish) days - it was worth about 50K to the them.

Big venues are what makes the difference so it's fair to say that acts that can fill an arena will make a LOT of money - usual situation: rich get richer and poor are screwed.

You play small venues, it's definitely going to cost.

Not paying for the music you are listening to is theft under law. If you want to justify it, that's up to you and in many ways, I'd guess you could win in a court of law.

Artists don't normally make a lot from an album but the sales themselves give the record industry an idea of whether or not to keep that band/artist on their books. CDs are very expensive which is why I wait for sales or use mailorder - same as for DVDs. I've got most of my Beatles albums at good prices by getting 2 for 1 deals or whatever.

 

[Jeff Ulmer]

What it boils down to in the industry is sales - they are the basis for everything. You want tour money? How are your sales? You want a decent advance on your next recording? What are your sales? You want to be booked by that foreign agent into a decent hall? Sales. They are the marker that the bean counters use to determine who gets pushed and who gets dumped. It is the sales that count.

It isn't just the musicians who are hurt by illegal downloading, it is also the folks who write many of these songs, who will never set foot on a stage. They too are governed by the world of sales - if their song goes big, they can be placed with bigger artists. This isn't all about dudes in leather pants who rake in millions.

As for making a million a night, you could count on one hand and still have fingers left over how many artists could want away with that net after expenses. Did you ever notice that big shows have a lot of staff working for them? Guess what, that comes out of the gate, as does all the advertising, staging, security, insurance, trucking, housing, and food for everyone in the production. While large tours can be profitable (no guarantees), the difference between gross and net income is pretty vast. People also seem to forget that these folks just didn't get there overnight. Metallica has been working at their career since the late 1970s.

People also seem to forget that everytime one of these artists gets to a point where they can sell a lot of records, they are providing jobs for tens of thousands of people directly and indirectly, from the publicity people, to roadies to the guy who works in the music store. Without record sales, none of these jobs would exist.

 

[Bill Leber]

I'm not sure if trading mp3s is illegal. Maybe I need to do a little more research but the last I heard it is perfectly legal to make copies of CDs AND TO GIVE THEM TO OTHERS PROVIDED NO MONEY IS EXCHANGED OR SERVICE PROVIDED. Exchanging music on the internet, while a vastly larger scale than making tapes for my buddies, is the same.
If anyone can tell me differently by stating a specific statute or court case I'd like to know. But I thought (again I should do research before posting, just reciting what I read elsewhere) that the record companies fought this battle in the 70's with cassette tapes and ultimately gave comsumers the right to "Fair Use" which included tape trading. Obviously there are differences between tape trading and the internet in practice, but legally it's a gray area at best.
Now as to the ethics of it. I don't see a difference between downloading an mp3 and recording a song of the radio (perfectly legal). By the way, record companies also fought radio. Who will buy records when you can hear it on the radio? How far from the truth, as they know now. The internet is the same. Record companies will, in the end, make more money because of the proliferation of music on the internet. Even today the idea that musicians, songwriters, or the labels are losing money because of "illegal" downloading is largely a myth.
Most downloaders either download individual songs they wouldn't pay for regardless, or eventually buy CDs, DVDs, et al. The fraction of people who download instead of buying music is very small. The industry is hurt by the sale of bootleg CDs, a very common practice, particularly overseas. This is taking money away from the people who deserve it. Downloading is not.

 

[JonZ]

I also believe the smaller bands dont really make anything from their record sales really. Some of the bigger groups do because they can demand more per record and they obviosly sell more records.

I dont have exact figures but lets say NOFX sells 200,000 records - whats their take on each record? What do they get 5cents, $5 I dont know.

Its most likely tours where they make their money. Tickets, merchandise and such.

Led Zeppelin changed everything in this regard becuase Peter Grant changed what management and the act would get per gig. Before, the promotors would get 90% and the act 10%, but Grant switched it saying Zeppelin would get 90% and the promotors 10% (they still made a killing).They had no choice, if they refused ,Zepplin played elsewhere.

I really cant see smaller bands making very much from royalties though.It would be cool if someone could provide some figures.The number I heard WAY back when was $1-$5 per record sold went to the band.

As far as touring, this of course will vary from band to band as in

The Ramones got $5000 a night

Kiss known to make up to $500,000 a night

NOFX $1000 a night

Fugazi charges $5 a ticket! and have played in some small places.To tell u the truth I cant see how some of these guys survive.

 

[Mike Broadman]

Bill, you're right about the fair use thing. My understanding is that the "anti-Napster" camp claims that downloading from the internet isn't fair use, because it enables millions of people to share on file. It's the numbers that changes the nature of distributing the music. If I burn a copy and give it to you, that's fine. But if I make an mp3 of it and join in a file-swapping network, now I'm giving it to potentially millions of people. That's their beef.

I still think it's BS, but I'm just explaining what people think.

 

[Ray R]

Getting a slap on the wrist for price fixing a few years ago just shows how much power this industry has in congress. Most other industries would have been sliced and diced, but not the record labels. Seems to me that price fixing would be a missuse of the labels copyrights which according to copyright laws means they lose all rights to the music that was sold under the price fixing scheme.

As for MP3 downloading being illegal, if it wasn't for the forth amendment, Apple Records would want royalties everytime someone calls for "help". I think the question should be "should MP3 downloading be illegal". Obviously many people think it shouldn't be and the record labels need to figure out a way to make it work.

 

[TheoGB]

Now as to the ethics of it. I don't see a difference between downloading an mp3 and recording a song of the radio (perfectly legal). By the way, record companies also fought radio. Who will buy records when you can hear it on the radio? How far from the truth, as they know now. The internet is the same. Record companies will, in the end, make more money because of the proliferation of music on the internet. Even today the idea that musicians, songwriters, or the labels are losing money because of "illegal" downloading is largely a myth.

I don't think the two are comparable.

Radio is very poor quality sound compared to MP3 for all kinds of reasons and it is difficult to get a good, noise and presenter-free copy of a track from there.

MP3's can be burned to CD and to most ears for a lot of types of music this will be indistinguishable from the real thing.

I still think people will buy the real thing if they like it but I don't agree that you can draw the radio comparison.

 

[Jeff Ulmer]

For those who don't know, this is how the record industry works (in general and really simplified, there are always exceptions):

A band is given an advance for recording their album. This amount varies greatly depending on the strength of the band, and to a pretty fair degree, their previous album's sales. Royalties fall into two categories: percentage of sales for the act (which, depending on the group structure is then divided amongst the members), and mechanical royalties, which are split between the publishers and songwriters. This equates to around $1 per album sold , plus mechanicals in the 5-10¢ per song range, divided by the number of publishers and songwriters. All of the above are subject to a deduction for management expenses, and most sales revenue is also carved down if it is out of the principle region, ie if you are signed to a US major, they will try to cut your royalties in half for sales in Japan.

From that advance (which the manager also gets a chunk of), the recording must be paid for. The advance is fully recoupable against royalties, as is all or most of the packaging and advertising. Royalties are only paid on albums sold, with holdbacks for returns, promotional items, and a whole list of other contract subclauses which whittle the royalties down to little or nothing.

In reality, the advance is usually the only thing most bands ever see, but their bargaining position is increased if they can hit decent sales numbers. It also increases the fees you can demand for live performance. Sales are the key to everything, even though a band working outside the majors could technically be making more money (net) selling fewer albums, it doesn't count in the eyes of the industry.

There are also performance royalties for the songwriters and publishers which get paid on airplay and concert performances, however there is a catch with these too. In order to get radio royalties, your song must be on the playist of a station who is being logged at the time. All radio stations are required to log what they play, but royalties are only based on a representative sample from various markets. You could be number one on XYXZ, but if they aren't being logged at the time, no money for you. Performance royalties for live venues are based on a whole slew of things, from attendance to ticket pricing, and are based on the fees paid by the promoter of the event. Big venue, more money, small club, zilch.

As for JonZ's performance payments list, are those numbers net or gross?

Let's assume they are gross, meaning before any expenses are covered. You have travel for band and crew, crew wages, equipment/lighting rentals, meals, security, insurance, hotels and every other thing it requires to put on a show, like fresh guitar strings. On top of that, management will take 10-15% off the top. Whatever is left over is split up between the band. Of course all of this is subject to income tax, so lop off another 26% or more.

Again the above is simplified, but is at least part of it.

 

[Lee Scoggins]

There may be a good reason MP3s are free...

1. This is a "loss leader" to build interest in a real CD purchase.

2. The sound is so horrible, it should be free. Regular CD is just barely tolerable for me these days.

Still, I see the appeal of quick early peeks at new artists for some rough listening to see if they are in the ball park.

Lee

 

[JonZ]

Jeff,

Agreed.I said I didnt have facts,those were just numbers Ive heard, while talking to friends about music,watching tv or whatever.

As I said, I really dont see how some of the smaller bands survive.They must be starving.

 

[ryan_x]

If any of you guys havnt noticed we live in a world that is ethically wrong...a world where people will try to take advantage of you...and suck you out of every penny...therefore i dont really feel any guilt when downloading mp3's

p.s. i just spent $300 on two Information technology textbooks for university...that will probably be obsolete within a year...now tell me thats not ethically wrong!

 

[Ted Lee]

While large tours can be profitable (no guarantees),

heck...when they charge 40 bucks for a t-shirt that costs (literally) maybe two dollars, then i say they're doing alright.

i've seen similar expense sheets for tv show merchandise, so i figure my numbers are pretty close...

 

[Jeff Ulmer]

Ted, you haven't had any shirts made up lately, have you?
Of course, you do realise that the band only makes a percentage of merchandise, less management fees...split between the whole band....so each guy might get a buck a shirt, a quarter of which goes to income tax...
There's money in merchandising all right, but like everything else in the industry, it usually isn't going to the band.

 

[Ted Lee]

i wish jeff!
btw, i absolutely agree with you...
i constantly hear that even when bands are doing well, especially up & coming bands, that they're always getting the short-end of the stick.
signing on the dotted line can be the death of them!
unfortunately, what's a band to do? if i had the chance to sign with a major record label, i'd probably sign with my blood if i could...

 

[Thomas Newton]

I don't know about copyright law, but with trademarks, if you do not make a visible effort to protect your trademarks, then they effectively become public domain, since any future prosecution can be appealed for biased prosecution (or something like that)

Copyright law is different. You can't lose a copyright for failure to prosecute infringement, although as someone else has pointed out, some forms of copyright abuse can theoretically result in loss of copyright.