Music Industry Needs A Dose of Innovation, Not Intervention

Michael Geist's latest Law Bytes column suggests that Music Industry Needs A Dose of Innovation, Not Intervention. I believe he sidestepped one of the most important dynamics, which is the growing separation of the majority of players that make up the music industry from the recording industry that historically dominated it.

The music industry needs to be understood as made up of at least 3 major components: composers (and their publishers), performers, and "makers" (recording labels). Historically the equipment required to record, edit and distribute recorded music was very expensive so there needed to be organizations that would deal with the large capital costs as well as offering loans to musicians. These financiers justified their risks by being intimately involved in many aspects of the music business, and dominated the industry for many decades.

Modern technology changes this dynamic entirely. It is now possible for composers and performers to get together and directly reach audiences without the need for external financing or any high-capital-cost infrastructure. This allows musicians, the actual artists which copyright was theoretically designed to protect, to skip the legacy intermediaries entirely.

The major labels (and some smaller ones) are fighting back against musicians by trying to retain their historical grip on the music industry. They claim that the laws they want to change, such as ratification of the 1996 WIPO treaties, are for the benefit of musicians when it is not.

The problem for the labels from Michael Geist's message is this: while innovation in the music business will benefit the songwriters and performers who make up the true music industry, their growth will come at the expense of the legacy recording industry. The government intervention that the labels have been calling for is for governments to choose labels over musicians in their current battles.