I have been listening and nodding away in agreement at Chris Anderson’s Free and reading Don Tapscott’s position on Digital Britain. In particular it was interesting to hear the history of the music industry and how is has shifted since the 1930’s. Each step challenged by the incumbent powerhouse, though the industry flourishing and growing despite that.
I paraphrase part of chapter 3 of
Free: The Future of a Radical Price: The Economics of Abundance and Why Zero Pricing Is Changing the Face of Business
In the 1930’s radio emerged.
Artists were paid for a single live performance, though this seemed unfair when compared to a concert hall of ticket paying audience when in fact it was broadcast to millions.
ASCAP insisted on royalties based on gross advertising revenue of the station at a high rate.
They wanted to raise the rate in 1940 when contract expired, which caused the radio stations a problem.
Whilst negotiations were on more stations started to use recordings as the technology had evolved and now had a use.
The record industry responded by stamping “not licenced for radio broadcast” on records.
Th US Supreme Court ruled if the station bought a record it could play it.
ASCAP persuaded major artists to stop producing records, hence cutting the content flow to the radio stations.
Stations were faced with either crippling royalties, or no content.
So they self organized their own agency BMI
This became a focal point for those niche artists and styles previously ignored by ASCAP.
Country & Western and R&B etc.
These “niche” musicians just wanted exposure so let the music be played for free
Radio then became a prime marketing channel for music not a direct revenue engine
Artists made money from records sales and concert sales and it moved back to live performance again.
With a combination of a smaller royalty formula and the rise of the Disc Jockey the top 40 era emerged. The music industry grew because of this.
Now the industry is about merchandise and live performance in concerts and still thriving.
Now of course we have the ability to both buy digital music at relatively cheap prices, and also for people to share them with one another for free. The powerhouses will say that this will kill music. It will if no one ever pays of course. However then no one will have any music and the human need for that will drive the creation of music. Live performance however still needs to be live, the tech will improve to allow the experience to get closer to the real thing as we see with virtual worlds. It then becomes about being at the event, being part of the event not just being broadcast too. The artists get to perform and get the adrenalin payoff for delivering to a crowd. Money will change hands, people will make a living.
The sands will shift, new patterns will emerge?
Of course piracy is a constant conversation and battle, but if something is good some people will show their appreciation , either by paying, donating, or spreading the word and acting as a salesperson to reach the people who will pay.
I am writing this as a someone who seeks to get paid for what I do, those things are very often about live performance of some sort. Generating ideas, inspiring people, explaining. Equally though lots of people expect that turning up to talk and generate ideas should be free, but they may pay for a “deliverable” some code, documents etc. Likewise much of what I share here is obviously giving away some ideas. Something that traditionally has been regarded (before the ability to share so widely) as something you keep close to your chest. Now blogs and twitter are my radio station playing my records that I create myself in order to help people know what I do, what I think and how I can come and perform for them and build their ideas in emerging tech and virtual worlds.
The various conversations about Digital Britain and clamping down on people worry me greatly. They have elements of the ASCAP example above, though I suppose this sort of restricted practice is needed in order for the industry to flow around it and grow. Having an threat or an enemy brings great resourcefulness. The danger is that the powers that be manage to crack down so much that we set the business innovation back too much.