You move on

thu5jul2007—27w186d50%— 17h42m00s—0utc

Fascinating Economist article on the music industry’s new developments. Very reminiscent of Dyson’s thoughts on intellectual property:

“[…it] is dead; long live intellectual process. Long live service; long live performance.”

and anime’s general stance towards piracy:

“If it succeeds, milk it; if not, try something different. And if the fans are into file sharing ”p">(which they are), keep the lawyers leashed and find a way to make piracy work for you."

Seven years ago musicians derived two-thirds of their income, via record labels, from pre-recorded music, with the other one-third coming from concert tours, merchandise and endorsements, according to the Music Managers Forum, a trade group in London. But today those proportions have been reversed — cutting the labels off from the industry’s biggest and fastest-growing sources of revenue. Concert-ticket sales in North America alone increased from $1.7 billion in 2000 to over $3.1 billion last year, according to Pollstar, a trade magazine.

Frustrated record companies have responded by trying to get their artists to spend more time promoting records and less time touring and endorsing products, says Jeanne Meyer of EMI, another big record label. “Sometimes you’ve got a tug of war going on,” she says. Yet the more labels spend on marketing pre-recorded music, the more they raise their artists’ profiles and boost their other, more lucrative, sources of income. Pre-recorded music, no longer the main cash cow, increasingly serves merely as a marketing tool for T-shirts and concert tickets. The best seats for The Police’s world tour this summer cost over $900; the group’s entire catalogue on CD costs less than $100.

The shift away from recorded music is due in part to the recognition that touring and merchandise are more lucrative. But it may also be a consequence of internet piracy, as free downloads give music fans more money to spend on other things. Jwana Godinho, the director of Música no Coração, a concert promoter in Lisbon, thinks many music lovers have a “mental budget” that they are prepared to spend on music, and have switched their spending from CDs to tickets and merchandise.

The logical conclusion is for artists to give away their music as a promotional tool. Some are doing just that. This week Prince announced that his new album, “Planet Earth”, will be given away in Britain for free with the Mail on Sunday, a national newspaper, on July 15th. (For years Prince has made far more money from live performances than from album sales; he was the industry’s top earner in 2004.) Outraged British music retailers were quick to condemn the idea. As far as the record industry is concerned, it is madness. But for the music industry, it could well be the shape of things to come.

The Economist, A change of tune

I’ve always hated, with a passion, moral-indignation ads against piracy — not only because they’re manipulative but because they’re stupid. And the best defense for piracy may be how hard it is to make an argument against it that doesn’t stink of moral indignation — if maudlin pleas are the best you can do, you’re probably rotten. (On a related sidenote, I found it mighty interesting when The Economist circuitously referred to Kazaa as “a file-sharing program that was widely used to download music without paying for it” — as much as ads want to make us believe pirating is stealing, there are crucial differences, which is why such circumlocutions are essential.)

To solve intellectual property’s malaise I’ve long sought for grand economic solutions (new innovative schemes or perhaps even a new concept of property rights) rather than grand political ones (which are just, ugh, imposed moral rules). While there has been plenty of both, I’m starting to see these days that maybe the solution will be simply to move on. Piracy is just another (admittedly extreme) form of commodification WP. You don’t fight commodification by outlawing it, you take the next thing that hasn’t been commodified yet, you offer value however you can, you move on.

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