Context & The Music Business
By Nick | November 23rd, 2009
Photo Courtesy Of Shaun Scholtz
At TEDx Vancouver, this weekend, there was a recurring theme of “context versus content”. It began with the first speaker of the day, Terry McBride. It is unfortunately rare to find a veteran of the music industry who both understands where the industry is headed, and why there is good reason to be optimistic about it. Terry is definitely one of those people. While many record label heads are afraid of altering the underlying business models of the music business, Terry seems prepared and willing to catalyze the industry’s transition.
Radical change in the music industry has been a hot topic in the Thirdi office over the last few weeks as well. We have been deeply discussing the possibilities for new models to reshape the world of music distribution with one of our clients. In this short essay I’d like to discuss what Terry thinks about the future of the music business, as well as what I took away from our internal discussions.
The days of thinking of music as a rights-managed, packaged, good are over. The current business model that the industry is clinging to was shaped by the fact that:
A) Music cost a significant of money to distribute
B) Shelf space, and album length, were finite
In that world, looking at music in terms of copyright made sense. You needed to control the number of people who could distribute music because otherwise nobody would take on the risk of bearing these costs. Neither of these two points are true in today’s world, however. Terry says that represents an opportunity, and so do I. The old model was defined by businessmen and lawyers, the new model will be defined by artists and fans.
You see, music is about situation and relationships far more than it is about distribution. Songs have meaning because of the way that they become a part of your life. As a teenager, Terry used mixtapes to win the affection of girls he liked. The medium of Cassette, LP, CD, or iTunes Download is not the important part of the story. What matters are the relationships that these gifts fostered. The context of the mixtape is far more important than the content.
The fact that he was breaking a copyright law by doing this never even registered in young Terry’s mind. He pointed out that most of the lawyers who are now helping record companies sue teenagers likely engaged in that same form of copyright infringement in their youth. You cannot litigate teenage behaviour, and you cannot legislate it either. People’s connection to music is too strong to be broken by scare tactics and arcane rules. I would add that you cannot DRM teenager’s behaviour either. DRM is designed to take away one of the core functions of music, to share it with your friends. Taking away that ability severely lowers its value to listeners.
There is more new music being created today than ever before. It has never been cheaper to record an album and distribute it, which completely upends the relationship between artist and record label. The old model assumed that even wealthy artists could not afford to record their own music, promote it, and get it distributed to all of their fans. In the analogue world, that was too hard. The label’s grips on the distribution network forced independent artists to the fringes, and put a ceiling on their success.
It is now possible to release music at a fraction of its former cost, which is likely why Terry is recommending so many of his artists start their own labels. It is a general economic rule that as the friction of coordinating a business shrinks, so does the size of the firm. In the case of The Barenaked Ladies, and a growing horde of other acts, the size of the firm has become a single artist (and a number of organizations they hire to help them manage and accelerate their success). Artists can interact more directly with their fans today, and don’t need to communicate through middle-men like labels. In this model, the artists are not constrained by copyright law because they hold the copyrights themselves. That affords lots of new opportunities.
Anyone who grew up around file sharing has become accustomed to free or very cheap music. That has changed the context that music exists in. Listeners can experiment more, and delve deeper into new genres, because there is no penalty for picking the wrong album or song. Terry talked about Spotify as the future of the music industry. It is true, there is a lot to love about the service. I wrote about it a few months ago on this blog, and still love the freedom it affords. Managing a music collection is usually a burden. I have spent hundreds, maybe thousands, of hours managing my 20,000 songs. Only a tiny, High Fidelity inspired, minority like myself actually enjoys that time. When most people want to listen to an artist, or a genre, of music they are not concerned with whether they ‘own’ it; they are concerned about how easy it is to access. In that sense, Spotify is a near-perfect service. You can listen to anything you want within seconds, and not have to think about where it came from.
I would argue that Spotify is far from a perfect product however. Music is inherently social, and Spotify’s social features seem tacked on at the end. Sure, you can share links to Spotify songs, but there is no way to play them if the receiver does not have the downloadable client and an account. Music is meant to be a shared experience, and while Spotify’s shared playlists are nice, they are neither central to the service nor universally accessible. Last.fm is closer, but still has little to offer the teenager looking to impress a girl. Spotify is still trying to replicate some aspects of the ‘individual-centric’ music model of the past.
Terry also talked about a push versus pull view of looking at recorded music. Vinyl records had to be played in sequence without risk of scratching them. That led to the “concept album” which took advantage of this reality and the length available in the LP format. When the Compact Disc was released, it allowed listeners to switch and repeat track easily. Artists adapted their work to this medium, as they have for every medium that preceded it, and created works that emphasized individual tracks. The concept album is a push-centered idea. The artist compiles a full-length work that is to be listened to in their specified order. The CD (and digital download) allow the listener to control the order of play. The effects of this transition are still taking shape. My question is: what will inherently social music look and sound like?
The talk was rich in personal stories, and new ideas to move the industry forward. Here are a few thoughts that I took away from his talk:
- Listeners don’t want to be threatened or controlled by corporations. They want to control their own experience.
- Artists are freer than ever to set their own course
- Context and relationships are a core part of listening to music
- Format, and business structure, affects art
- The fan will take a far more central role in the creation and distribution of the music that they listen to
- It is a good time to be a music fan, and an even better time to be an artist
For more information on some of these ideas, check out these articles which inspired me.
