Free Music and the Future of the Recording Industry

Posted in 2012 The Gnovis Blog  |  Tagged , , , , , , , , ,

As part of Social Media Week DC I recently attended an event in which Derrick Ashong, musician, entrepreneur, and host of “The Stream” on Al Jazeera English (full disclosure: I work with him at Al Jazeera) spoke about “The Million Download Campaign”. This effort aims to give away a million copies of his most recent album, Afropolitan.  Ashong spoke about his motivations to start the campaign and the broader implications of open source music, a topic he has been interested in since graduate school.  Hearing him speak, I learned more about the economics and behind the scenes dealings of the music industry in an hour than in 23 years of actually listening to the music eventually produced.  This realization led me to wonder why such a huge industry of producers, managers, and musicians has so far failed to adapt to the rise of new media, or rethink its outdated business model.
It doesn’t take a lot of digging to find that the complex economic relationship between an artist and his or her record label often results in waiting years to receive any sort of compensation from record sales. And those who get any money from record sales at all are the lucky ones.  Before seeing any profits, an artist must pay back the record label the money it has spent on promotion, advertising, production costs, etc. This means that even some successful artists, such as famed country singer Lyle Lovett, never make anything from album sales, generating their income instead from touring profits, merchandise sales, and promotion deals.  With the rise of digital music and distribution through online platforms such as iTunes and Amazon and streaming services Pandora and Spotify the industry is evolving, and yet record labels still use old standards to exploit artists.  For example, money is still taken out of revenues for “breakage,” a holdover from when a significant percentage of vinyl records could expect to be broken in transit, hardly a concern with digital files or even CDs.
New media and online file-sharing have also made it easier for artists to release their music without the backing of a major label, which Radiohead demonstrated in 2007 when they released “In Rainbows” exclusively through their website under a pay-what-you-want model.  However, new artists without an existing fan base would find it hard to gain recognition without the help of radio promotion, advertising, and publicity campaigns. As a result, they are forced to seek the help of a label, which will sign them into a multi-album contract, preventing them from breaking out on their own after one hit album.
Of course, “giving away” content comes with strings attached as well–questions of copyright and fair use immediately come to mind.  Sites such as Creative Commons are attempting to make more content available for adaptation and use by anyone, but the amount of content that is “owned” by a specific person or organization remains huge.  An artist may be willing to give away his music to fans, but he wouldn’t want it appearing on an advertisement or other commercial entity without specific permission and reimbursement.  Changing the way an entire industry operates is not a light undertaking, but more artists would do well to bring attention to their plight through campaigns like “The Million Download Campaign” or by otherwise informing their fans that reform is needed to keep up with changing times.
Top image from Flikr user cogdogblog, licsenced under Creative Commons. Bottom image from