It's about time I got back to some of my more serious articles, so I'm starting a new series about how the internet is changing the economic aspects of the arts.
THE NEW CREATIVE ECONOMY: PART 1
Don't Sue Your Customers!
The internet has undoubtedly changed how we engage with the arts, particularly in relation to music but also in other forms of creative expression. There's no question that many sectors of the arts need a new funding model - but suing your customers isn't it!
Ongoing battles between the entertainment industry and illegal downloaders are contributing to a damaging fall in consumer trust, according to new research from the PR agency Edelman. The number of UK consumers who said they trusted the industry fell from 47% in 2007 to 31% this year, with confidence disturbed by moves by the music industry to track down and punish illegal music copying, and high-profile scandals in broadcasting.
All quotes are from this article in The Guardian by Jemima Kiss.
Ah, the sweet sound of chickens coming home to roost!
The internet can be a disaster or a boon to the arts, it depends on how willing you are to embrace change. If you can see the potential and are willing to engage with your audience online, you can do well. If you resist the online changes and particularly if you treat your customers badly - as the mainstream music companies have been doing for several years now - your customers will return the favour.
Surveying younger consumers aged 18-34, Edelman found that 55% would take "direct action" against a company if they objected to its practices, 53% would share negative opinions with friends and 46% would ignore a firm's marketing and advertising. Even more damning, a further 39% said they would not invest in those companies.
I've been predicting this for years - anyone with half a brain can see what's happening, except the entrenched and outdated big music companies apparently. If they don't change, they will die. The only reason they've survived as long as they have is that musicians and music consumers didn't have a choice before but conditions have changed. Musicians are no longer so reliant on record companies to fund, distribute and promote their music; computers and the internet make it cheap and easy to produce and then promote your own music online. In addition, there are now there are new online music companies who use different financial models and who treat both customers and musicians much better:
Magnatune is an ethical record label based on downloading MP3's. You choose the amount you want to pay and the artists get 50% of the price. You can then legally share your download with three of your friends. This article by John Buckman about why he started Magnatune is well worth reading because it exposes the problems with the traditional record companies.
The Podsafe Music Network is a promotion network that allows podcasters to download music that they can play on their shows for free without restrictive licensing agreements. Links back to the musicians from the podcasts allow listeners to buy music that they hear on podcasts; I've done this several times when I've heard something that I love.
Independent online record store, CD Baby only sell CD's that come directly from the artists, who receive a large percentage of the cover price. I recently bought two Amy Steinberg CD's from them after hearing one of her tracks on a podcast. My CD's cost about £7, allowing me to return to joy of buying albums on spec, something I used to do a lot as a teenager when music was a more reasonable price than it was in the 90's. In addition, the emails I got from the company were charming and funny and the CD's arrived quickly from the States. I'm hugely resistant to buying music from the mainstream record companies because of the way they behave but I'd definitely buy from CD Baby again because they're cute, well organised and they treat musicians well.
Although prices of CD's have dropped recently for several reasons, musicians signed to major labels still only get a tiny fraction of the profits and may even lose money on record deals. The mainstream record companies still rip off both customers and musicians and then have the nerve to constantly bitch in the media and sue people. As is now becoming ever more apparent, this is a bad long term strategy.
The question I've been asking myself lately is "if I'm willing to buy Fairtrade to ensure producers in the third world are treated fairly, why am I supporting unethical music companies who mistreat musicians by underpaying them and trapping them into restrictive contracts where they often lose the rights to their own music?"
My solution has been to boycott the major record labels whenever possible and buy the music they produce secondhand but this means that the musicians don't get anything at all, which I'm not happy about. There has to be a better way and hopefully some of these new online music businesses will provide a way forward where everyone is treated fairly, especially the people who make the music in the first place.
Let's end on a positive note:
...the survey showed 56% of young UK consumers would rather buy legal content, if it was at a reduced price, than download illegally. That compared well with the 27% who refused to pay for content, and the 17% who said they might pay, but could continue to download illegal content as well. Much piracy, this would suggest, is fed by the lack of a legal online alternative.
If the mainstream music companies start treating their artists fairly, stop suing schoolkids, adapt to the changing conditions of their industry and do a lot of grovelling, then they may have a chance to survive. If they don't, they're history...
Maybe you're asking yourself what this has to do with the visual arts, but as my dad says, "everyone's useful, if nothing else they can always serve as a bad example!"
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