December 1, 2010 | By Richard Esguerra

Secrets of the "New Music Industry" that the "Old Music Industry" Doesn't Want to Know

This week's news that the feds seized 82 websites based on allegations of copyright infringement demonstrated that government website seizures can silence innocent speech. But let's take a broader view for a moment. The domain seizure debacle, the COICA Internet censorship bill, ACTA, and many other short-sighted efforts to eliminate copyright infringement all depend on (a) the traditional entertainment industry's yowling wail that "piracy" on the the Internet is injuring the livelihoods of artists and (b) the US government's chronically uncritical acceptance of those complaints.

But the new services catering to musicians are struggling to tell their side of the story — a story that turns out to be substantially more optimistic and instructive. Jeff Price, CEO of TuneCore, posted a fantastic six-part series titled "The State of The Music Industry & the Delegitimization of Artists" that surfaces this new perspective that desperately needs to be heard in the debate.

Here are some key ideas from the series:

  • U.S. music purchases overall are up year-to-year, while album sales are down. In other words, artists are making more money, while the labels are making less.
  • Price presents some insightful back-of-the-napkin math comparing (a) an artist's take from selling and distributing CDs with a label, to (b) an artist's take from selling songs and albums online: "By selling just two songs on iTunes for $1.98, the artist makes the same amount of money as if a $16.98 full length CD was bought. An artist sells one digital album for $9.99 and makes 500% more than a signed band."
  • The traditional music industry insists on measuring artist success via album sales, which harms artists that are nonetheless popular, interesting, relevant, and profitable.
  • Outdated copyright and trademark laws can actually impede independently successful artists from capitalizing on all available opportunities.

The takeaway? Thanks to technology and Internet-enabled services, more music is being purchased, more music is being heard, and artists are getting paid. But the traditional music industry measures success using a bygone standard, leading to a lopsided perspective of how artists can achieve success in this day and age. And in our view, this leads to an undervaluing of the broad, actual advantages of the Internet — and innovative services using the Internet as a platform — in rewarding artists for their creativity.

We hope that Congress and other decision makers think twice before accepting that dangerous Internet censorship measures like COICA actually represent what's best for artists. And Jeff Price's series ought to be required reading for anyone thinking of legislating or giving over government resources to copyright enforcement on websites.

From the story that Jeff Price is telling, updating the laws to help artists take advantage of new opportunities would provide far more value without also threatening free speech, damaging the technical underpinnings of the Internet, and limiting innovation.


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