Figuring out the Music Industry...

The following is a comment to a discussion in the latest This Week In Tech podcast.

I wanted to help the group better understand what is happening in the music industry. In the conversation you were speaking as if it was one big happy industry, when in fact you need to divide it into at least 3 warring factions to make sense out of things: composers (and their publishers), performers, and "makers" of sound recordings.

It is a mistake to say that radio airplay helps the "makers", as it doesn't. Here is the situation. In the past the technology to record, edit and distribute recordings (of music, movies, etc) was extremely expensive. Many countries set up regimes to provide the incentive to pay the huge capital costs to acquire this equipment by providing a layer of copyright to the people who provide the mechanical means. In Canada both sound recording makers (the record labels) and broadcasters have their own independent layer of copyright on top of whatever rights actual creators would have.

And then the world moves forward: now the technology required to record, edit, and distribute recordings is available at such a low cost that many people in the more industrialized countries have children able to record, edit and distribute their own works. The structure that was set up by the makers and broadcasters is increasingly becoming redundant, and they are fighting for their very survival.

Many countries decided back in the '30s that radio airplay could be seen as advertisement for all aspects of the then more unified music industry. It was decided that only the composers would receive a government-set fixed royalty rate for the use of the music, since performers and makers would make a lot more money from the increased sales of physical media (records ;-) that would result.

This dynamic is no longer the same, and the sales of physical media are dropping as people move to other ways of acquiring music (and movies, etc).

The whole question of "who gets paid" for a download has not been fully sorted out. There is a faction (myself being part) that believes that only the composers and performers should receive any money, and that the changes in technology should suggest that "makers" and "broadcasters" should no longer have copyright at all (there is no longer a need to provide incentives for something that no longer has a high capital investment).

The record labels of course want to make nearly all the money, and spent more of their time (including in the courts) trying to screw composers and performers even more than music fans. People in the USA are likely watching the debates around the Broadcast Treaty at WIPO, and what they are trying to do there.

The US online music streaming example is one where the levy that was proposed would go to all the components (composers, performers and makers), effectively having a government body decide the percentages rather than the record label contracts. What the labels want is to have this regime die, and ensure that everyone has to go to them so that they get to decide the percentages -- ensuring that the composers and performers get practically nothing compared to the labels.

It is amusing to see composers and performers support the levy proposed for Internet music streaming. Even though they are part of the industry, they don't understand what is going on. The whole goal of having the rates be high is an attempt by the makers to ensure that composers/performers make *less money*, not more money. It is all about the labels trying to retain their historically dominant position in a modern technological world that has made them entirely redundant.