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  • Music Piracy

    Posted by Mitch Townsend on August 25th, 2004 (All posts by )

    I’ve been following this story for several years. The major record companies, with the connivance of the union representing the performers (AFTRA, the American Federation of Television and Radio Artists), failed to pay into the artists’ pension fund. This came to public attention when some of the great R&B performers of the 1960′s went to retire and found they would get either nothing or very little from the AFTRA pension plan, which was supposed to be administering the funds. Sam Moore, of Sam and Dave, found out that from 1965 through 1992, Atlantic Records had contributed exactly nothing towards his pension, and he was entitled to only $64 per month. Jackie Wilson and Mary Wells died in poverty and without health insurance. In 1994, Moore, with Lester Chambers (Chambers Brothers), Curtis Mayfield, Wilson’s estate, and others, brought suit against the RIAA and the record companies. USA Today had an update a couple of months ago. The suit is still going on, ten years later.

    Also, the recording industry had been holding on to about $50 million in royalties owed to artists they could not find, and so could not pay. The missing artists included David Bowie, Dave Matthews, and Sean Combs. NY State Attorney General Eliot Spitzer persuaded them to try harder.

    I was reminded of this when I read this story about the RIAA suing another 744 people for file sharing, along with about 4,000 others in the past year. This is the sort of thing that gives capitalism a bad name.
    The RIAA website has an anti-piracy statement with this noble sentiment:

    Finally, and perhaps most importantly, the creative artists lose. Musicians, singers, songwriters and producers don’t get the royalties and fees they’ve earned.

    It’s nice to know they care.

     

    6 Responses to “Music Piracy”

    1. Andy B Says:

      Unfortunately for the record companies, they are pursuing an elephant with a pea-shooter. 500 people here, 3000 there, will not put an end to file-sharing, especially with hyperactive teenage minds continually producing new ways to do so in an untraceable way. Eventually, artists will come to realize that the most personally lucrative distribution channel for their product is their own server or website.

    2. Mitch Says:

      Good point, Andy. It’s going to be disintermediation on a big scale. A lot of bands are also following the Dead’s model of touring for income, and handling all the back office chores in their own organizations. The jam and punk bands, especially, are doing it this way.

    3. Andy B Says:

      And there’s another HUGE benefit to the music buying public here. Bands that produce great product will sell directly to their fans, collect the lion’s share of the profit, and benefit from the viral marketing opportunities that the web offers. The over-produced, over-hyped, label-built performers will see the sweet deals diminish as the big label’s business models progressively weaken. End result: The product (music) will have to stand on it’s own merits.

    4. Ken Says:

      “End result: The product (music) will have to stand on it’s own merits. ”

      On the contrary. The music stands on its own merits when the music itself is purchased by those who like it. If people are required to go on tour, sell tickets, and handle associated logistics in order to be paid for the music, then it becomes far less the case that the music stands on its own merits.

    5. Mitch Says:

      Ken, sorry I compacted two or three things into one thought. The practice of making money from touring — which is a difficult life — came from the difficulty of making a decent living from recordings. It wasn’t because it was more lucrative that bands started living on the road, but just because that was something harder for the studios to control. Some bands started handling their own ticket sales to escape a similar situation with Ticketron as they had with the studios: essentially a monopsony (opposite of monopoly; only one buyer, so the producer rather than the consumer is a price-taker). This was step one.

      Step two will be when bands are able to sell their music directly to the fans, either over the internet or by other means. It wouldn’t surprise me to see the functions of the record labels split out and bought by artists as they need them — promotion, production, video, etc. It would have already happened if musicians had a clue about how the world works.

    6. Andy B Says:

      Ken,
      The marginal costs of selling another digital copy of a song or entire album are very small, hence the marginal profit of an additional unit is large. The costs of planning and executing an entire tour are very large. Most musicians producing content which can “stand on its own merits” will be much better off financially through additional song sales of which they are getting nearly all of the profit, not through touring. The behemoth groups are the ones who generally can make money off of a tour, not the smaller bands.