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After 35 years as a recording artist John Cougar Mellencamp felt compelled to reflect on today’s art.

People remember when music existed as an art that motivated social movements.  Artists and their music flourished in back alleys, taverns and barns until, in some cases, a popular groundswell propelled it far and wide. These days, that possibility no longer seems to exist.[1]

Distinctions can easily be drawn between calls to action like Bob Marley’s “Get Up, Stand Up” and calls to complacency like John Mayer’s “Waiting On The World To Change.”  As Mellencamp points out, music is in a sad state.  Furthermore Barlow suggests “[c]reative people may have to renew their acquaintance with humility.”[2] Artists should write songs because they need to, not because they fit in shrink-wrap and generate revenue.

Pitchfork, an uber-respected music-criticism site, playfully rated “Music“ a 6.8 out of 10.[3] According to the review, authored by Pitchfork editor in chief Ryan Schreiber, the popular medium that predates the written word shows promise but nonetheless “leaves the listener wanting more.”[4] While obviously created in jest, there certainly exists some truth behind this point.  Perhaps this young generation of technology embracing pirates are nothing more than the product of the vacuous state of today’s content.  If the record industry provided goods that had intangible social value, as music purportedly used to have, their concerns of declining perceived value would be instantly alleviated. Continue Reading…

The Fall of DRM

In an effort to combat piracy the music industry has experimented with alternatives in the physical medium on which music is sold as well as piracy thwarting technological blocks.  First, the industry tried to upgrade from the standard CD format to more difficult to pirate high audio quality SACD or DVD-Audio albums.  These were largely viewed as superfluous and costly because they often required the purchase of a new player to listen to them.  Next, the industry adopted DRM, a technological system limiting the total number of devices a song would play on. This system failed because fans continued to illegally download millions of mp3s and quickly found ways to convert their DRM protected files to unlocked mp3s. Barney Wragg, head of digital music for EMI and former Senior Vice President for digital music at Universal Music, had an epiphany in summer of 2006, I realized that as an industry we’d kind of been smoking crack.”[1] After eight years of fighting the mp3, major labels were beginning to accept that selling DRM-free music was necessary for survival and, with Mr. Wragg pioneering the way, EMI was the first major label to become DRM-free.  Other major labels were soon to follow.  Universal Music abandoned DRM in summer of 2007, and a few months later Warner and Sony BMG had no choice but to join the movement by making their entire catalogs available DRM-free via Amazon.[2]

Upon realizing that no adequate technological protection system existed to effectively stop piracy, the record industry shifted its approach.  Rather than protecting their music files with DRM or by threat of litigation, record labels would simply provide enough incentives to induce consumers to purchase CDs.  Once such incentive is added value content. Alicia Keys’s hit album As I Am was released in late 2007 chock-full of added content, including: 30-second audio files for ringtones and ringbacks, mobilephone wallpapers, and digital videos, which were also distributed through YouTube and MySpace.  Inducement through added content proved to be a smash for Ms. Keys when As I Am sold more than 3.5 million copies.[3] Ian Rogers, former general manager of Yahoo! Music, articulated it well when he said “[t]he record companies are all realizing they’re not in the CD business anymore.”[4]

Much to the surprise and luck of the record business, another income stream emerged.  Continue Reading…

Basic rules of economics dictate that once supply and demand for a good are at equilibrium, the price point and supply levels are at the most efficient levels to meet demand.[1] Where supply has grown into abundance and demand remained stagnant the value of goods must be decreased to correct the market back to equilibrium.  The supply and demand for entertainment content behaves in precisely the same fashion.  Today the supply of music is greater than ever before.  Supply has been significantly increased by technological innovation drastically lowering production costs of content, which has caused both professional and amateur content to be in abundance. The modern consumer is inundated with content unlike any other time in history.  Additionally, the very way consumers entertain themselves is shifting due the fact that much of this fresh pool of content is primarily available online.  Scores of teens are turning to the Internet as their primary source of entertainment.[2] In a study conducted by www.cybersentinel.co.uk, researchers found teenagers spend an average of 31 hours online per week.[3] These are consumer entertainment hours that only a few short years ago would have likely been occupied with off-line traditional creative media.  This indicates there is a fundamental and substantial change occurring in young consumers preferred method of entertainment.

As consumer demand is changing the entertainment market from the ground up, businesses are in a constant state of trial and error attempting to recapture consumers’ increasingly diluted and unpredictable interests.  Today’s Darwin-esq digital wild west is undoubtedly powered by demand.  The entrepreneurs at Amiestreet.com are taking this concept quite literally.  They have created a website that prices mp3s on the basis of consumer demand. The site allows artists to upload their material, which is first offered for free and as more people purchase the songs the price goes up, with a maximum of 98 cents per track. This model has attracted the participation of some big name such as Johnny Cash and Sarah McLachlan.[4] Amiestreet.com’s mantra is “we’re committed to giving every artist a shot at being the next big thing, and you the chance to discover them first.”[5] This philosophy is one that describes the sentiment of many tireless music aficionados and musicians alike. Continue Reading…

The record industry’s poor financial state has received frequent but shallow coverage by the media.  Most often the headline is followed by a sound byte about pirates and the music-stealing teenagers that support them.  While the proliferation of piracy is certainly a factor in the industry’s financial health, it may simply be a symptom of a much greater war; a struggle between two industries that has been largely ignored by the media, Content vs. Technology.  Some savvy pundits have described the battle between California’s content and technology industries as an economic civil war.[1] Here, the virtual Mason-Dixon line divides southern California, the historic capitol of content creators and rights holders, from northern California’s Silicon Valley, a potent cluster of technology juggernauts like Apple, Facebook, and Google.  Although content currently appears to be losing ground to technology’s blitzkrieg in this most public of battles, both content and technology will need to find an amenable compromise -a treaty of sorts – to thrive together in the marketplace.

The value of content is much broader than its oft-celebrated sociological, psychological, and cultural benefits.  Content is a source of not only geopolitical capital and influence abroad but also tremendous wealth for our Country.  Some might be surprised to learn that intellectual property, including compositions and recordings of music, is the United States’ number one export. [2] In a time where much of America’s manufacturing has relocated to more cost-effective locales, such as China, intellectual property has maintained its position as a dominant source of revenue.  Maury Yeston, Ph.D, a multiple Tony Award-winning Broadway composer and former director of undergraduate music studies at Yale University, encourages us to “consider the massive and disproportionally [sic] positive influx of income the export of our intellectual property has on our nation’s balance of trade, not only in song, but also in film and theatrical products.”[3] Intellectual property is one of a shrinking number of “products” America exports with a positive trade balance but for some reason it is losing the consumer adoration and respect it once had. Continue Reading…