New Levy to compensate artists for lost revenue?! (1 Viewer)

[Michael St. Clair]

And this justifies stealing from them? It may surprise you to know that managers at any of the major corporations make insane amounts of money - the same corporations that employ a huge number of people around the globe. Does that mean everyone should be stealing the products and services of those companies - resulting in downsizing, and firing of employees - just because the managers make insane salaries? I think not.

Am I to take this as meaning that those who create art are the same as those who package macaroni, process petroleum, or drive taxis?

Sorry, but when music execs make zillions while musicians starve is a true injustice; I won't lump the chairman of Kraft in with them just because they make a lot of money also.

The practices of the RIAA have resulted in a consumer backlash. Any artist who only wants to blame the consumer loses ALL of my sympathy.

 

[Rob Gardiner]

Jeff,
Could you please cite the law under which downloading an MP3 is considered illegal? According to my understanding of copyright law, an individual is allowed to make a copy of copyrighted material for personal, non-commercial use. This is our right. It is illegal to sell copies of copyrighted material, and it is illegal to distribute copyrighted material to the public for free or otherwise, but I do not see how downloading an MP3 is any different than taping THE SOPRANOS for a home collection or a teacher photocopying an article from TIME magazine to pass around to the class. POSTING MP3s would be illegal (public distribution) but I do not know of any argument by which downloading and listening to them is against the law.
You say you have never downloaded an unauthorized MP3. Have you never taped a program from TV on your VCR? Have you never transferred LPs to cassette? If so, you should not feel guilty as these are also covered by fair use. If I'm correct, the Supreme Court has affirmed this in the Sony Betamax case.
The whining by the record companies would be amusing if it wasn't so dangerous. They claim that MP3s are destroying their business. The same was said of CD-Rs, DAT, cassette tapes, reel-to-reel, etc. They have made the same ridiculous claims for over a century. When the player piano came out in the late 19th century, sheet music publishers claimed that player piano rolls would put them out of business. :rolleyes
Also, there are a few earlier comments of your I would like to refute. (Sorry Jeff, I'm not picking on you personally, you just happen to be the only one arguing from your position.)

to market who would otherwise give up their art and find normal jobs.

Emphasis mine.
I think you're exaggerating a little here. The major labels' power is based on maintaining artificial scarcity in every part of the industry. Under the old model, there is limited shelf space in Tower Records for merchandise, a limited number of pages in Rolling Stone upon which to advertise, and a limited number of spots on a label's roster to sign artists. This allows the labels to dictate draconian terms to the artists. Home recording equipment and the internet eliminate this scarcity. But the fact remains that as the number of majors has dwindled in the past decade from eight down to just five, the number of new artists who get signed DECREASES as industry consolidation INCREASES. Do you honestly think the majors promote a wide variety of artists? Have you listened to the radio lately?
I agree with you that this levy is a poor idea. I can only hope nothing like that happens here. I would be absolutely THRILLED if our lawmakers would stand up for the fair use rights of the consumer, as spelled out in copyright law, and hinted at in the Constitution itself (which states [please correct me if I'm wrong] that copyright is to be both TEMPORARY and LIMITED).
On a slight tangent, I have been reading various online Tolkien FAQs. One question was, "How do I report unauthorized electronic versions of Tolkien's texts?" The answer was, "If you wish to support the Tolkien estate's copyrights, you may send the url of the offending website to Tolkien's lawyers at this address." There was no suggested course of action for one who wishes to support the FAIR USE rights of the consumer. I bought my single volume LOTR at Costco last year but would rather carry around my palm pilot than a huge brick of bleached wood pulp. Why should I be made to feel guilty by doing this?
I've asked this question before (in another thread) but did not get a response. What is the forum's policy on discussing fair use? I realize that discussions about violating copyright law are forbidden, but is it OK to discuss copying for private, non-commercial use? I've noticed that members (or even mods) will mention "ripping" trailers to the hard drive of an HTPC for display before the main feature, but they will always get very vague before discussing specifics. I agree that discussing illegal activity should be forbidden on the forum, but as far as I'm concerned this falls under fair use. To what degree are we allowed to discuss this?
Looking forward to some engaging debate.

 

[Jeff Ulmer]

Sorry, but when music execs make zillions while musicians starve is a true injustice;

You are getting confused. This is reality. In a capitalist society there is almost always a huge disparity between those making the goods and those selling the goods. While I do wish artists were able to keep a fair proportion of the money they generate, that simply is not the way it is in ANY industry on this planet. Do you really think Nike gives a great percentage of their profits from selling $200 runners to the 4 year olds who make them in third world countries? How about all those rich folks (who live in corrugated steel shacks) in South America or Africa who supply Starbucks with its $4 cups of coffee? The music industry is no different. Musicians create a product, and someone else comes along and sells it for a profit. It is the American way.

I hear the complaints about all the recoupable costs as another justification for downloading all the time. Guess what, without the record company bankrolling these artists, they wouldn't even have a chance of making a record in the first place. You would never have heard of Courtney Love if she hadn't taken the money offered and made a record, and had the record company promote her into a household name. She would still be a waitress somewhere. Sure, she could have saved up her tip money and gone independent, but she would have been 50 by the time she could afford to make a record. The cost of production is an expense an artist has to endure. There is no one forcing anyone to sign a major label contract, or trying to negotiate for better terms, but when you have no alternative to either pursuing a creer in music or not, you have to make sacrifices. Either come up with the cash yourself, or have a label give it to you. Have you ever tried approaching a bank for a loan to make a record? They laugh you out of the building. The labels aren't loan sharks. Half the time they don't recoup what they've invested. In the mean time the artist gets a product and exposure they couldn't have gotten otherwise, or at least not without outside financing on a grand scale.

As for MP3 downloading, fair use does not cover the reproduction of entire works. It was a mechanism put in place to allow extracting portions of material for restricted purposes, personal entertainment not being one of them. The time shifting provision was not to fascilitate archiving works. You mention illegal distribution - well just how do all these MP3s come to be all over the net? Is downloading not just an extension of that illegal distribution? Is it okay for me to take a stolen TV as long as I didn't steal it myself? There is nothing wrong with downloading MP3s that the copyright holder has distributed, but that isn't the case in 99.9% of the cases.

The same goes for your Tolkien book. Fair use does not cover replicating the text in its entirety, and if the source is not authorised for distribution, then by extension downloading a copy of falls outside the law.

Since all of the above isn't on topic, that's the last I'll discuss it in this thread.

My objection to the levy is not that the artists (which is not just musicians, but also the writers, composers and producers) don't deserve fair compensation for losses due to illegal distribution, but on the basis that the distribution of the funds collected aren't being attributed fairly to the creative talent, and that the source of the money collected is targeting too wide a base indiscriminately. This is another attempt to filter revenue into the top niche of the industry at the expense of the independent, and on those grounds I hope it fails.

 

[Dave Poehlman]

Are they gonna tax my pack of musical staff paper and my pencil? Technically it's a means of storing music.

There is so much gray area here.. I can't imagine this going through, if at all, without being pared down to something more specific.

Hey, if marajuana laws are eased, then I could hide hard drives inside marajuana bales!

BTW: that was funny.

 

[Rob Gardiner]

Jeff,

. You can have a website full of MP3's as long as it is not a business site, you are not selling ad space etc. If you can afford it, have fun.
Copying software in a business.
Illegal - Don't do it.
Copying software you own for personal use.
Legal if no money is passing hands.
Sell copies of software you own and no longer use.
Legal as a second sale.

This just seems like common sense to me.
Can anyone point me to info that says downloading an MP3 is against the law? And I don't mean an RIAA press release.
Another issue discussed on the site above is the fact that copying of the works of others is Constitutionally protected Free Speech. No law passed by Congress, such as the Copyright Act, can trump our Constitutional rights. If the Fair Use provision was not included in the Copyright Act, it would be UNCONSTITUTIONAL.
Jeff, if you think this discussion has strayed to far off-topic, I would be happy to resume the debate in a new thread. In the meantime, I'll be exercising my constitutional right to read RETURN OF THE KING on my Sony Clie.

 

[Jeff Ulmer]

Alright, let's discuss price fixing and collusion. Just what exactly is this? It is conspiring to keep pricing at a certain level. However, it is only when companies get caught doing it that there is an issue. Do I agree with the practice, no, but this activity happens in absolutely every sector of consumer goods. The only difference between many of these situations is whether there is an actual documented conversation that makes it a conspiracy. Otherwise, it is considered a free market.

Why are oil prices so high? Surely there is colusion when companies purposefully cut back production to keep supply short, especially when they are vertically integrated (ie control production from source to market). There are other political issues which I can't get into here which also drive this comodity. Again with the runners, the pricing on these is certainly not driven by the market's wish to pay $100+ for shoes. This is another conspiracy where one company tries selling high priced goods, and the others follow. More of a nudge, nudge, wink, wink conspiracy. This practice is rampant, and as long as there is capitalism it will remain rampant. Charge what the market will bear. This is nothing new.

Do I work for the labels? No I don't, but I also won't accept an argument that because the labels are corrupt and self serving (like every other huge corporation), that it warrant vigilantiism (downloading to spite the record companies) - especially when that act benefits those downloading. If the public is so disgusted with the labels and want to do something to benefit them, try sending in donations to the groups, not stealing their music. If you want hypocritical, the argument that you are showing up the labels or helping artists by building a free entertainment library is a perfect example.

Bringing up all these justifications for downloading is nothing more than diverting the real issue, which is the theft of intellectual property. Trying to take the moral high ground as a downloader is laughable. At least the labels pay for the records to be made, and bring exposure to the artists, hopefully launching their careers. Downloading only leeches off the talent, offering nothing in the way of reward for those who have worked to create that material. Just who is the bad guy in this equation?

 

[Jeff Ulmer]

Buzz, let me make it clear that you and I don't have as big a difference of opinion on this issue as it may seem. I fully agree that the levy that is the topic of this thread is unjust for exactly the reasons you stated: it is indiscriminate in its application, and won't serve those it pretends to protect.

As for online monitoring, I don't have a good solution to file sharing. The RIAA's approach, while it could be effective, is excessive.

I also don't want the big 5 to have control over distribution online, or the types of fee you suggest for distributing independent music. I work independently, and don't need or want the labels interfering until and unless I decide it is in my best interest to be involved with them. The internet SHOULD be a conduit for independent distribution and promotion, outside the establishment. I can envision a perfectly viable alternative to the traditional label through online fulfillment, either of music files or packaged product, but this has to go hand in hand with an understanding from the audience that they need to financially support those artists whose work they enjoy. This is my problem with the current free-for-all mentality.

I would also like to see the broadcast industry be forced to provide continuous, complete digital logging of their programming, rather than the current "sampling" method being used, which easily omits a large segment of the music being played at any time. With coding already in place on CDs there are few reasons why stations couldn't log every title they played, and have the performance royalty distribution based on what is really happening, rather than select segments of select markets. Artists would be paid for every performance (albeit less per performance), but the system would be fair.

I have no problem with the big labels dealing only with big money makers. They have no obligation to anyone on how they conduct their investments. I do have a problem with limiting access to distribution as a result. Unfortunately, no one has come up with a working model for independents to get product into major retaillers. The one company that tried this went bankrupt, and as expected left the artists in the lurch. This isn't a problem isolated to the music industry. retail has become increasingly hard to get into in many markets, especially the larger chains. This is why I could see a shift to net based distribution working better for smaller artists, but online promotion alone isn't enough to support a major project - yet.

Unfortunately, the model of the development deal is long dead, at least at the majors level, but with the changes in the recording technology over the past decade, coupled with the internet as a promotional tool, the need to nurture bands into maturity isn't as necessary any more. When the only option to make a sellable record was a $100K budget in a professional studio, it was obvious that the labels would need to float the expense until an artist was established enough. Today, the budgets can be less, and if the overhead decreases (ie the artist being paid directly by the fans, rather than only taking a small cut of the overall dollar), it is quite possible (at least in theory) to sustain a career. As such, I don't want the majors cutting off the other avenues for those who chose not to play in their arena any more than you do.

 

[Rob Gardiner]

Hmmm.
First of all, I'm tired of typing "personal non-commercial use" so I will use PNCU from now on.
Jeff,

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?

Well I think that's enough for today. I have put forth two propositions:
1. Downloading MP3s is perfectly LEGAL according to US Supreme Court decisions, the Fair Use provisions of the Copyright Act, and the US Constitution.
2. The distribution of MP3s benefits the artists involved.
I have provided support for both of the above. Jeff, if you disagree with either statement, I would appreciate some SUPPORT for your position. Anything beyond a simple denial.
Also, I don't think you answered my earlier question. Have you ever taped a TV show on your VCR? And do you think it is wrong and/or illegal to do so?

 

[Jeff Ulmer]

Rob, I am not a lawyer, nor do I play one on TV, but here are a few items to support my assertation that downloading is in in fact a violation of copyright law.
Considering the levy already in place whose expansion sparked this thread, there is precedent to the notion that private copying does indeed fall outside fair use provisions. In international law, see the below:
INTERNATIONAL CONVENTION FOR THE PROTECTION OF PERFORMERS, PRODUCERS OF PHONOGRAMS AND BROADCASTING ORGANISATIONS (1961)
Article 10
"Producers of phonograms shall enjoy the right to authorise or prohibit the direct or indirect reproduction of their phonograms."
This seems pretty clear who has the right to authorise (or not) the distribution of sound recordings. US law provides the exclusive right in TITLE 17 > CHAPTER 1 > Sec. 106. (http://www4.law.cornell.edu/uscode/17/106.html)
"(3) to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending;"
Which is subject to the fair use provision (Sec 107): http://www4.law.cornell.edu/uscode/17/107.html
There is nothing in this provision which grants any rights to consumers. It simply excludes certain academic and noncommercial uses, uses for parody etc, and outlines ways of testing whether a use meets the definition of fair use.
More on fair use: http://www.benedict.com/info/fairUse/fairUse.asp
A four step weighing outline for determining fair use: http://www.utsystem.edu/ogc/intellec...y/copypol2.htm
A summary based on pesonal usage rights from: http://www.eff.org/cafe/gross1.html:

Quote:

(Emphasis mine)
I think it is clear that downloading is considered an illegal activity under US law, and is also open to civil suits. I hope that is enough documentation for you.

 

[Rob Gardiner]

From the top,

Quote:

Please let me know if and when the Constitutional argument outlined above is successfully defeated in court.
Still, Jeff, you have not even addressed my second issue. Whether downloading MP3s is morally wrong (causing harm to the artists). I have provided much evidence above from Janis Ian, someone who knows much more about this than you or I. In fact, I will find your counter-argument for you. Go to google.com and search for +Metallica +Napster +"bitching and moaning". Just kidding on that last part. You will see plenty of complaints of lost revenue. What the members of Metallica seem to have forgotten is that they got where they were due to a network of fans TRADING TAPES AMONG THEMSELVES. They were happy to earn the benefits of others exercising their Fair Use rights at the expense of the record companies, but changed their tune when it started costing them money. However, CORPORATE PROFITS DO NOT TRUMP INDIVIDUAL RIGHTS. The law does not exist to enrich AOL/Time/Warner by depriving us of our Constitutional rights. Why is this so hard to understand? You seem to be operating from the assumption that record companies are entitled to money any time they can convince others that this is so. Why do our Senators and Congressmen not stand up for Fair Use rights? Maybe because AOL is a bigger campaign contributor than any music fan. The record companies cheat their artists as well as the consumers. Distributing MP3s serves the public interest.
So I ask you again. Pleas show me ANY LAW that supercedes the Constitution. There is none.
Please show me evidence that downloading MP3s harms the artists involved. When Napster was operating, CD sales were UP. Now that it is gone, CD sales are down. Napster boosts CD sales.
Based on the above, I simply don't see how downloading MP3s can be considered legally wrong or morally wrong.

 

[Jeff Ulmer]

Rob, the appeal of the Napster case did cite Fair Use, and failed on many grounds, specifically the noncommercial aspect of downloads whereby the downloader is gaining in material value (as per Mr. Hoffman's and the RIAA site). The appeal also failed on a number of other points that I am not going to get bogged down in debating. For more on why the First Amendment is not involved see http://www.freedomforum.org/template...ocumentID=3077
Quote: "The U.S. Supreme Court has held that using another person's copyrighted expression can be prevented by copyright law and does not violate the First Amendment,"
As for the Metallica scenario you mentioned - the tapes being traded were released by the band for the purpose of trading. There is nothing stopping the copyright holder from allowing this. Metallica's initial complaint under the Napster case came about from tapes they did NOT authorise the release of making the file sharing servers. There is a substantial difference between the two scenarios.
You are free to hold whatever opinion you chose, however, I believe I have demonstrated quite adequately that your interpretation of fair use is not supported by the courts, and is anecdotal at best. While the provisions of 107 are not cut and dry, they do weigh heavily in favor of the copyright holders when it comes to downloads, a position supported by the courts. I have also shown that the courst do not consider this type of copyright infringement to be a constitutional issue.
From: http://www.freedomforum.org/template...cumentID=13064
Q. Did the 9th Circuit panel's ruling that Napster is trading in copyrighted music undercut the First Amendment?
A. Not at all. The First Amendment guarantees freedom of music — not free music.
The First Amendment prevents government from banning Eminem's music, but there's no corollary right to widely distribute his music without paying for it.

 

[Rob Gardiner]

All right one more go, then I'm off to bed.
Downlading of MP3s does not constitute theft.
Dictionary.com (again, emphasis mine):

Quote:

Well my interpretation of Fair Use has never been tested by the court so I will withhold judgment on that.
---
Consider that Napster used the lure of free MP3s to attract users to their software, which contained paid advertising banners. This makes Napster a commercial enterprise and therefore in violation. Napster earned $$$ from the work of others. I ask again, has a poster or downloader ever been found criminally guilty or civilly liable under the Copyright Act for trading in MP3s?
---
On Metallica: It is all well and good that they authorized their fans to trade those old tapes, but even without such authorization, trading (not selling) these tapes would have been legal Fair Use.
---
You have responded to the legal issues I have raised but not the moral issue (harm to the artists). Would you care to address this? I have provided many quotes from Ms. Janis Ian in support of my position. If you have any information that refutes this, I would be eager to see it. (Please, not from the RIAA.)
---
A couple other items: one of your links above specifically mentions "format shifting" as an acceptable Fair Use. I believe this would cover the Tolkien novels, no?
---
My dad has been a Star Trek fan from day 1. He now lives in an area that does not receive UPN. If he lived in a bigger town, he could receive free over the air broadcasts. Instead, his only option would be to obtain free downloads from KazaaLite or something similar. Would you consider this illegal or immoral? Why?
---
One last note: don't believe for a second that the labels have a shred of concern for their artists. After the Napster settlement, not one dime was distributed to artists. The labels are motivated solely by greed. They want our money whether they are entitled to it or not. Is it so hard for you to believe that there are situations in which they are not entitled to our money? Would you ban the sale of used CDs? After all, this sale on the secondary market is not authorized by the copyright holder, nor do they receive any royalties from the sale.
Jeff, I think we may be at an impasse here. I don't think either of us will budge. Would any other members care to chime in on this? Am I totally off the mark? My rights are important to me and I hate to see them eaten away. I enjoy the luxury of ripping trailers to my hard drive before watching the main feature, as do many members and even mods on this board. The RIAA and others want to TOTALLY ELMINIATE all fair use. We've been brainwashed by thousands of FBI warnings on videotapes. The entertainment industry only has itself to blame for the poor shape it is in. The arguments they make, that MP3s are destroying their business, is a big fat lie. It was a lie when they said it about player piano rolls, just as it was a lie when they said it about the cassette tape and every other new technology that they did not understand.
Anyway, I appreciate the passionate, yet civil debate. Many thanks to Jeff and the other participants here. I don't think I'll have any more to add, but you never know.
HAPPY FESTIVUS TO EVERYONE

 

[Jeff Ulmer]

Regarding increased sales due to Napster, the court doesn't agree: (http://www.nyls.edu/samuels/copyrigh...s/napster.html)

The district court further found that both the market for audio CDs and market for online distribution are adversely affected by Napster's service. As stated in our discussion of the district court's general fair use analysis: the court did not abuse its discretion when it found that, overall, Napster has an adverse impact on the audio CD and digital download markets. Contrary to Napster's assertion that the district court failed to specifically address the market impact of sampling, the district court determined that "[e]ven if the type of sampling supposedly done on Napster were a non-commercial use, plaintiffs have demonstrated a substantial likelihood that it would adversely affect the potential market for their copyrighted works if it became widespread." Napster, 114 F.Supp.2d at 914. The record supports the district court's preliminary determinations that: (1) the more music that sampling users download, the less likely they are to eventually purchase the recordings on audio CD; and (2) even if the audio CD market is not harmed, Napster has adverse effects on the developing digital download market.

Do I believe the majors are doing anything for the benefit of the artist? Yes I do. They finance, promote and expose artists to a large audience. They provide financial support for touring, advertising and marketing campaigns, the value of which is substantial to the artist. In many cases the provide the ONLY means for an unknown artist to take a shot at the big time. However, I do not for one minute believe they do this for the concern of the artist, they do it because it is in their best interest to locate and showcase new talent, in the hope that they will reap material benefit from it. They are a business that sells the product an artist creates. There is no shortage of potential artists, and like any industry based on the tastes of a market, they try to guess what will be hot next and ride the currecnt trends, just like the fashion industry, the toy industry, what have you.
I have already said that I donn't have an issue with online distribution - as long as it is authorised. I don't want to see the big 5 stepping in and creating barriers for independent artists to showcase their work, if they do, I'll be at the front of the line in the courtroom challenging them.
Downloading unauthorised material is a violation of the rights of the authors, both legally and morally. It deprives those authors of their right to control the means of distribution, the quality of their presentation, and the potential to exploit their work for their legally permissible gain.
The Janis Ian story is interesting. Note that they mention that THEY were the ones releasing new material, not some unknown source. I find this analogous to a label releasing a new single. They more the songs get controlled exposure, the more the whole catalogue sells (which is funny when you consider the lack of development support the majors hive artists. I have always contended it is better to build a catalogue of music and a gradual, dedicated following over trying to break big on the first outing...).
Anyhow, I too grow tired of this discussion. There is a lot of technical reading on the legalities involved, especially when digging into precidents. As to challenging your specific theory before the courts...
Lawyers are standing by....

 

[Rob Gardiner]

Jeff,

"Napster killed Kid Rock, there's no doubt about it," Rosen said. "As soon as that web site went up last October, people stopped buying his music. It's not surprising, either: Why would anyone in their right mind pay $12.99 for a CD with artwork when they could simply spend seven hours downloading the compressed MP3 files of all the album's songs onto their home computer's desktop, decompress it into an AIFF sound file, and then burn the data onto a blank CD?"
"If we don't do something, this technology is going to destroy the record industry," said Nathan Davis, vice-president of Atlantic Records, Kid Rock's label. "Just imagine if the oil-change industry allowed the public to have direct access to oil and oil filters, enabling them to change their car's oil themselves without going through Jiffy Lube or Kwik Lube. People would stop going to oil-change shops, and the entire industry would collapse. We can't let that happen to us."
...
"This is exactly the kind of thing we've been warning our fans about," James Hetfield, the lone surviving member of Metallica, told reporters during a press conference at Hollywood's Grace Church Homeless Shelter. "First, they found Madonna dead of a crack overdose in the alley behind Liquid. Then my best friend and bandmate Lars is killed by cops during a botched hold-up of a liquor store. Now, Kid Rock dies of starvation like a filthy dog in the street. My God, people, didn't we learn the lesson of Elton John?"
John, the British rock star who went bankrupt in 1976 before private ownership of music-pirating cassette decks was made illegal, died of exposure on a Welsh moor that year after creditors repossessed his clothing.

 

[Jeff Ulmer]

The labels provide not one dime of financial support. Every expense incurred by the label on behalf of the artist is CHARGED BACK TO THE ARTIST. The labels simply FRONT the money but they expect it to be repaid, with interest.

You say this as if getting financing for a record is an easy matter. Try walking into a bank and asking the manager for $1,000,000 because you want to be the next rock star. They would laugh you out of the bank.

In the majority of cases, an artist would never have the opportunity to record, let alone have access to the distribution and thousands of support personnel at their disposal to get their face into the record buying public's grasp. Putting up tens to hundreds of thousands of dollars is nothing to be sneared at, especially when the chance of ever getting it back is 1000 to 1. The worth of fascilitating a recording, and the promotional clout a major can offer is immeasurable.

But it is not without its downfalls.

Yes, the album recording and advertising are a recoupable expense, as they should be. The labels do not charge interest (they can't, it's illegal AFAIK). The artist has to settle for a lesser share of profits (they aren't assuming the major risk, after all). The artist loses control of a number of aspects of their career in many cases. These are tradeoffs made in the pursuit of the fast track to stardom, and the courts have upheld suits brought against the industry for the way profits were split (see the ZZ Top case for an example). Is it fair to the artist, who is the creative talent, to make less than the salesmen of his/her product? I would say it is in most cases, just as it is in any speculative venture. Those who put up the money and take the risks are the ones deserving of the larger rewards if there is a payoff. No one is a star if nobody ever gets to see them.

As for radio and trend setting, of course the labels will try to push their product as the "it" thing, but that doesn't always work.

 

[Jeff Kleist]

In Japan, artists are not indentured servants,they are contracted employees. In other words, they draw salary with bonuses based on their music's performance. This frees the artists to be experimental, to write better music and to not always be worrying about the next check. They also have a thriving single market which lets them have better album releases because of the "test-run". Sure I pay them $30 an album, but you know what? I like 8-10 songs on there. Considering that about 60% of the albums that are hot today are basically $18.99 singles which piss off your audience and cause you to lose sales to Kazaa because no one is paying that much for 1 song, perhaps they should alter the system to how they're doing it.

 

[Cam S]

Why can't the music industry adapt some form of copy protection similar to the ones used by software makers?? That would stop people from ripping songs, and stop file sharing. Until of course someone finds away around it.

 

[Jeff Ulmer]

Why can't the music industry adapt some form of copy protection similar to the ones used by software makers??

First, how do you protect the millions of CDs already in the market? Second, how do you encode the CP so it still makes discs readable in regular CD players? Third, someone will eventually crack it, making it useless. Fourth, there is already a backlash against CP'd CDs. The only way to enable a CP scheme is by introducing a new media type, which is not a viable option - look how well SACD or DVD-A is (not) doing. Eliminating CD based releases would be suicide.

Add to that, how do you allow artists access to the protectional measures outside the majors? It is already unfeasable for non Sony artists to release in SACD due to the restricted and cost prohibitive access to mastering in the format. Even the new CP being employed by the majors on "red book" CDs is cost prohibitive for small run manufacturing, and for online distribution, as soon as your material is hacked, it will be a free-for-all.

To answer a couple of Buzz' questions:
1. Online distribution eliminating cost of delivery ignores bandwidth costs, which are going to be high if delivering a decent quality. You would still have mastering costs, which, since the end product is now a compressed file will need to be considered for quality. Depending on what format is used, also opens up the whole trading can of worms. MP3 is not a viable format for online commercial distribution. Placing some form of restrictions on downloads is imperitive, since as soon as the file is available, it will be wordwide in minutes if there isn't something to stop it.

2. Lowering the price of CDs. This is already being done across a number of product lines. It is not hard to find popular catalogue for $5US (or less) at major retaillers. Obscure catalogue isn't justified at a lower price point (either online or on CD) due to the costs associated with keeping the title in print, or being served, versus its return. A CD sitting on a shelf or in a warehouse costs money, and the longer it sits, the more it costs.

For CDs, stores also have to take into account the cost of their overhead (which is always going up - leases, employee costs, shipping costs, utilities, advertising).

If labels were to seriously cut their prices, the effect would be an even smaller percentage of new artists being signed, especially for fringe product. Corporations who are looking to lower prices cut staff, not just their profit margins. They have to answer to their investors first and foremost. This will mean eliminating all catalogue that doesn't sell above a determined amount, dropping all acts that don't make their numbers (aided by all those who pirated rather than purchased material), and less advertising.

I'm running out of time here, but will close with this:

The biggest mistake ever made by the music industry was allowing CD ROM drives to reach the market with no SCMS in place. That would have cut the whole online piracy situation off right at the start, or at least severely curtailed its pervasiveness.

 

[Cam S]

First, how do you protect the millions of CDs already in the market?

You don't, so they would adapt. Software companies had no problems doing this, and they are ALWAYS changing their ways has to how they protect what they put their time and money into. I mean there has to be a way for the music industry to make some sort of protection like software companies have been doing for years. It hasn't gotten in the way, and the only time it has gotten in the way is when you try to use it in a way that is illegal anyways.

 

[Jeff Ulmer]

It hasn't gotten in the way, and the only time it has gotten in the way is when you try to use it in a way that is illegal anyways.

Try telling that to all my colleagues who have lived through multiple versions of PACE over the years, where the only thing conflicting and causing them to lose their legitimate software was incompatable copy protection. It has gotten better, but I still have thousands of dollars worth of software I paid for which won't run because the copy protection isn't compatable with a newer OS, or a newer version of the copy protection.

The difference between software companies and record companies are many fold. In theory, you should not have to upgrade your CDs every year just to keep them working with your other CDs, nor should you have to replace CDs regularly to get added useability or features from them. The software industry gets away with this (why no cries about ripping off the public for software?) on a yearly basis at a much higher cost, yet if the record industry were to try to sell you another CD with better sound for $15 everyone screams bloody murder.

Whatever scheme gets put in place has to protect the libraries that already exist. The law already does, but it is not being effectively enforced. Perhaps a few court rulings at the maximum penalty ($10,000 per song) would send a message to the illegal downloaders (and their parents), especially if the Universities and colleges were found jointly responsible for downloading on campus. It is obvious that internet piracy will continue if there are no consequences for breaking the law.