Why Does The Music Industry Suck Today?

Don’t Panic

I’m not going to talk to you about the Bieb, Ms. Spears, or anything like that. This isn’t about criticizing the pop music that I know you genuinely love. This is about criticizing the industry that’s responsible for popularizing that awful crap you love.

Big Music: A Schadenfreude Cornucopia

The (big) music industry makes my job here easy. I don’t even have to try to convince you that the (big) music industry is out of touch and incompetent. Hell, you probably know of a few key points that I missed in this obnoxiously long rant.

Anyways, what’s with me writing (big) before music industry? Well, because there are two entirely different music industries today and I want to make sure you know that I’m talking about the one that deserves this article’s existence.


Meet The Scumbags

RIAAThe RIAA is a collective made up of many music labels including Sony, Universal, Warner, and all of their subsidiaries. EMI used to be in the picture, but they sold their publishing branch to Sony, and their music catalogue to Universal at the end of 2012. On their website they claim:

RIAA® members create, manufacture and/or distribute approximately 85% of all legitimate recorded music produced and sold in the United States.

If you cringed when you read “legitimate recorded music”, I implore you to stick around for the rest of the show.

Meet The Exceptions

While one might argue that every member of the RIAA is guilty of at least enabling the RIAA to do the stupid and terrible things that they do (I’m getting to that.. be patient,) I do want to give credit where it’s due because, indeed, that would make me one of these accused enablers, and I cannot deny that I work with a lot of great people who may be genuinely upset at me if I don’t mention that:

Many member organizations and individuals associated with the RIAA are hard-working, honest folk just trying to make money the way that they know how to, with the opportunity they have.

It’s not my intention to slam those who regrettably work with the RIAA. In fact, I hope I’m offering up a heaping dose of knowing validation to these good people who otherwise reluctantly swim with the sharks.

So, What Actually Is So Bad About The RIAA, Mr. AutomateAllTheThings Guy?

The RIAA T Your Money With The Help of The U.S. Government

Hold your horses Mr. Tinfoil hat guy! I am not a conspiracy theorist, so just hear me out on this one:

For years, The RIAA lobbied the U.S. Congress  until they successfully got them to pass the Audio Home Recording Act of 1992. (See? Real stuff. You can relax, now.)

So, what did the RIAA convince our government to do for them?

  1. Every time somebody buys an analog OR digital audio-recorder (including  in the US, $2 goes straight to the RIAA.
  2. 3% of revenue from blank media like CD-R & CD-RWs goes straight to the RIAA. (This also includes DAT, Mini-Disc, Cassette Tapes, etc.)

These fees are passed onto the consumer (that’s you), in the form of a price hike. So, even though it was Sony or Maxell that created those reels of blank CDs you used to burn all of the time, you were secretly forced to cover the cost of the RIAA’s fee for no other reason than that of the RIAA having lots of money and time to lobby Congress until they did what they wanted.

This Sounds Unconstitutional, Mr. Things. Why Did Congress Do This?

Why yes. Yes it does sound unconstitutional. In the eyes of the 1993 Congress, however, it was a “fair” law to allow artists to get a cut of the blank media money to offset the effect that piracy had on their revenue, but..

The Artists Rarely See That Money

Okay, the RIAA doesn’t get the money directly, but it is given to AARC (which the RIAA shares office space and employees with), and AARC then gives the money to the RIAA who is supposed to divide this money among artists (33%) and record labels (66%). They even have a fancy chart to break it all down for us:

Dart Flowchart

So, according to this chart.. if I wrote a hit song.. I would get 50% of 33.3% + 40% of 96% of %66.6, right? Ah crap, did I carry the? humbug.

I don’t want to bore you with the math (that’s my fancy way of saying that I don’t understand the math and can’t explain it to you), but I do have examples, such as the band that sold a million songs, and ended up owing $500,000 to the RIAA in the end, or Lester Chambers of the Chambers Brothers (pictured on the right) that didn’t see a royalty payment from the RIAA for his 7 albums for 27 Years, and still hasn’t seen a penny for his other 10 albums.

Lester Chambers Facebook Post

What The RIAA Does Best

The RIAA is great at taking credit for others’ successes (like Lester Chambers), and blaming others for their failures. This allows them to maintain the illusion that they’re somehow still responsible for driving music sales growth, but this is a big, fat lie.

If Apple could, they would sell the music without paying the RIAA and instead giving the artists a 70%+ cut. If the device manufacturers could, they would sell devices without paying the RIAA. If the consumers could, they would buy music from an outlet that isn’t tied to the RIAA (like ThePirateBay, hmmm), because the RIAA increases the price of music by 90% of what it needs to be to deliver.

The RIAA’s mission statement is:

  1. to protect intellectual property rights and the First Amendment rights of artists;
  2. to perform research about the music industry;
  3. to monitor and review relevant laws, regulations and policies

By my count, they’ve achieved only 1 out of 3 of their stated goals.

  1. Piracy is ubiquitous with music, so they really aren’t protecting shit.
  2. They missed every single major trend in music history (which I will prove to you in the next section).
  3. To their credit, they do an exceedingly great job at monitoring and reviewing relevant laws. Heck, sometimes they even draft them secretly for lawmakers.

As for performing research.. well that’s where I’m going to show you their biggest failure of all.

The RIAA Missed

Every Major Music Business Opportunity Since It’s Founding In 1952

Concert Tickets

James Brown Concert TicketIn 1976, the RIAA missed out on clinching control of live music show revenues when Ticketmaster was founded and quickly gained dominance that the RIAA could never buy back. These days, the RIAA pays more money to Ticketmaster than vice versa, so I coult this as lost empire #1.

Portable Music Players

walkmanSmall, transportable music players really became popular in the ’70s when Philip Magnavox released a battery operated cassette recorder (originally intended for voice recording). This made the RIAA very nervous because some people used them to record music played on RIAA mediums.

This was the RIAA’s opportunity to control the portable music market and render moot any worries about sales losses. It’s called diversifying, and the RIAA has no idea on how to do that in a big way. Count this as Lost Empire #2.

By the early 80s technology had caught up to the point where portable music recorders could make a perfect 1:1 recording of music licensed by the RIAA. This really pissed the RIAA off, so they did what they do when they’re the loser and lobbied against the top technology of it’s time: Sony’s Digital Audio Tapes (DAT).

Yep, one of the Big 3 Member Labels in the RIAA was once a target of it’s lawsuits and lobbying! If the irony isn’t good enough, just wait until you hear how Sony got out of it.

It was Sen. Al Gore and CBS Records, that instigated the Digital Audio Recorder Copycode Act of 1986 was introduced and subsequently shot down by Congress. CBS wanted all copyrighted recordings to have a notch filter applied to them to detect if the music was legally obtained or not. Besides obviously distorting the music by applying the filter, it was also found to be ineffective at preventing piracy anyways.

So, what did Sony do? They bought CBS; Changed their name to Sony Music, and that’s all I got to say about tha-at.

Music Videos

mtvTelevision was wildly popular before MTV made it’s debut in 1981. The RIAA lacked the foresight and research ability to see the popularity of music videos coming. Instead, MTV nabbed the RIAA’s lost empire #3.

Recordable Media

cdsWith Sony on their side The RIAA had an opportunity to clinch control of recordable media. They made the CD-R with Philips which made the DAT obsolete, then went on to popularize it worldwide.

The obvious downside for them was making it easier than ever for consumers to copy music, and having a format that could be easily duplicated with slight variations by other manufacturers. So, they made another run at Congress in 1993, got the Audio Home Recording Act of 1992 passed, and forced an extra $2 out of every consumer & device manufacturer in the U.S.

You know how sometimes there are music and data CD-Rs at the store? Ever wonder what the difference is? Physically; nothing. The music CD-Rs will cost $2 extra to cover the cost of the RIAA’s fee. I didn’t fart, but I smell bullshit.

In the end, digital formats came and rendered CD-Rs deprecated, then obsolete. The RIAA had lots of time to see this coming, and you would have expected them to since the 2nd item of their mission statement is: to perform research about the music industry. Instead, they ignored purely digital formats because they perceived little revenue from it in the absence of packaging, distribution, and retail outlets.

The RIAA still gets money from the music players if they have a recording function, but due to revenues from their legislative efforts being inadequate to sustain them, I count this as lost empire #4.

Internet/Satellite Radio

internetradioIn 1988 and 1990, two companies were founded with the dream of deploying a nationwide satellite radio service to consumers. Why only 2? Because there were only 2 licenses available for such a service from the FCC. Of course, the RIAA could have also acquired these companies had they seen the market demand.

XM beat Sirius to the punch in 2001 by launching first after having worked for 13 years to jump through all of the hoops necessary in setting up such a service.

In 2006, the RIAA sued Satellite Radio provider XM for devices that allowed radio listeners to save songs for later listening. The RIAA contended that XM must pay huge fees and fines. Judges sided with the RIAA, and XM was in big trouble.

In 2007, XM and Sirius merged together to survive the onslaught of exhorbitant fees imposed by the RIAA & Congress. Ultimately, the RIAA gets the boobie-prize of fees from Sirius, but they are not in control of the satellite music industry, nor do they have a friendly partnership with the established player. Lost empire #5.

Downloadable Music

availableonitunesInstead of embracing mp3s like Apple did with iTunes, the RIAA decided to try and squash it with lawsuits and lobbying (like it always does). They successfully destroyed Napster (I got to meet the Napster folk. They were good people, not ravenous pirates like the RIAA made them out to be.), Kazaa, Limewire, and any other company that attempted to embrace digital music technology. That was their whole plan: stop mp3s from happening, keep the CD popular.

This is where I came into the picture; a young musician/opinionated asshole completely in love with the digital revolution. I joined up with a digital rights lobbying group in Washington D.C., setup an anti-RIAA booth at Bonnarroo, and actively did anything I could to stop the RIAA from imposing compulsory licensing, putting DRM chips in our computers, amongst other pro-indie-music-business agendas.

I just couldn’t believe that the RIAA wanted to kill such a great technology, instead of embrace it for the glorious tool it would someday inevitably become. I couldn’t believe the power that this company wields with Congress to pass something like the Digital Millennium Copyright Act of 1998 that would allow the RIAA the ability to sue anybody they deemed was pirating their music.

Well, the RIAA got their just desserts from Mr. Steve Jobs when he popularize the iPod, then coaxed the RIAA into a deal where Apple would sell music for them.

Again, the RIAA could have made their own online service for selling music, but instead… they missed the ball, and somebody else swooped in to nab lost empire #6.

Streaming Music

spotifyThe story of Streaming music is like a hybrid of the Satellite Radio and Downloadable Music stories. In a nutshell, they sued internet radio stations then imposed exorbitant fees on each play of each copyrighted song. Today, they get streaming revenues, but they have no control over their own streaming music future, and so they lost empire #7.

The Independent Music Industry

indieSee, there’s a divide between the RIAA and, well.. the rest of the musical world. That’s not to say there aren’t some bridges here and there, but the divide is clear and present to (almost) all musicians, and most of today’s neo music lovers.

The RIAA and independent music industries subscribe to vastly different schools of thought on how to make money from music. Don’t be naive, it’s still all about the money if you want your stuff to be heard. This is true even in the independent music industry, but money is and always has been a great thing for music.

The problem isn’t in trying to make money off of music; it’s in how you go about doing it:

  1. The RIAA and it’s true supporters believe that music has value because they say it does, and that the best way to make money is to force people into buying their music with threats of litigation.
  2. The independent music industry knows very well that they cannot compel the consumer to pay for music because the consumer has caught on that it is not a finite commodity; it is an infinite commodity that can be copied at will without anybody losing their copy. So, rather than fight the trend, they embrace it by treating the music as a free promotional commodity to boost sales of things like show tickets, branded products, and yes, even physical copies of the music as well.

So you see the main difference is that indies are literally giving the music away so that it finds it’s way to fans that will pay money for commodities to support the band. This is in contrast to the RIAA’s approach of continuing to fight consumer behavior by secretly lobbying the government to prosecute people that download their music without paying.

While the RIAA pays millions of dollars every year on focus groups to try and find these fans, the indies just let everybody hear their music as loud as they can so that true fans can hear it from a mile away. Oh, and they do come a’ runnin’, too, because it worksit worksit worksit works.

Crosby & Zappa

Two Names Your Kids Will Have To Google While You Cringe

Out of deep respect for Frank Zappa & David Crosby, I will refrain from any attempt at explaining who they are, or why they are important.

Instead, let me just tell you about two interviews that defined the starting point of my music industry education well before I joined their evil ranks: The first interview of Zappa is from August, 1993, and the second is Crosby in March, 2004. Separated by 11 years and the invention of the internet, both interviews come from very different times, however both sing the same tune: a major factor in the suckification of commercial music came when the old school “Cigar Chompers” of the past gave way to their young, hip executives.

Young, Hip Executives

From the 1993 Frank Zappa Interview:

zappaNow, look at who the executives were in those companies at those times: Not hip young guys. These were cigar-chomping old guys who looked at the products and said, “I don’t know. Who knows what it is? Record it, stick it out. If it sells; alright.”

We were better off with those guys than we are now with the supposedly “hip young executives” who are making the decisions of what people should see and hear in the marketplace. The young guys are more conservative and more dangerous to the art form than the old guys with the cigars ever were.

From the 2004 David Crosby Interview:

David Crosby And Graham Nash Perform In AmsterdamWhen it all started, record companies — and there were many of them, and this was a good thing — were run by people who loved records, people like Ahmet Ertegun, who ran Atlantic Records, who were record collectors. They got in it because they loved music. …

Now record companies are run by lawyers and accountants. The shift from the one to the other was definitely related to when the takes started to get big. Somebody in a forensic accounting job could probably establish the exact moment at which it reached the level that brought in the sharks.

Change in attitude, change in management, new management. You’d just be dealing with different people. You know, you’d go to a meeting with a record company and it wouldn’t be a guy there who knew that you had written a new song and thought that was cool. It would be a guy who knew that he had moved 40,000 pieces out of Dallas this month, and he had no idea, pieces of what?

Both of these opinions came from men that made millions of dollars off of their music, but would not even be considered for release today by the RIAA. In the words and pantomiming of Mr. Crosby:

If you brought the Byrds right now, took them to a record company and said, “Hey, these kids are great.” [throat slashing noise] To Crosby, Stills, and Nash. To Crosby, Stills, Nash, and Young! Any record company right now. [throat slashing noise] “Sorry, these guys are too weird, and that’s too inflammatory, too political.” That’s the truth. We wouldn’t get a contract. We would not get out.

The other peculiar thing to notice is the apparent contradiction between Crosby and Zappa’s interpretation of what went wrong. Zappa says it’s because the hip kids took over for the cigar-chompers. Crosby says it’s because the cigar-chompers took over for the hip kids.

So, who’s really to blame?

The RIAA Is To Blame

riaa_logoIn my opinion; Zappa and Crosby are talking about the same thing, but from different perspectives.

  • To Zappa, it was the taste-blind executive that took a chance on him, and the hip executive that judged his music and forced him into the obscure bins of the record stores. (My first Mothers album was a $1.99 used copy from a recycled music shop in Wichita, Kansas)
  • To Crosby it was the hip executive that appreciated his music enough to popularize it, and the taste-blind cigar chomper that couldn’t.

Here’s my take:

  1. The (big) music industry began to flourish because of the passion of early entrepreneurs.
  2. The pioneers were passionate about what they did, whether they did it for money, or they were in it for the music, they were also in it to grow the marketplace of music.
  3. When the pioneers really made it big, it attracted many people to the wealth of it all. Everybody wanted a piece of that pie.
  4. These people were not interested in growing the market to make it a better place that is more profitable to everybody. These newbies were interested only in getting a piece of the pie that the pioneers had meticulously baked with love.
  5. When the pioneers got old, they sold.
  6. The new guys moved in, systemized A&R (looking for new talent), and have been working ever since to stabilize and control the music market in the United States by whatever means necessary.
  7. It didn’t matter if the new guys chomped a cigar in front of Crosby, or they looked hip to Zappa. They were always the same guy.

So there you have it. That is why the music industry sucks today, and why I think it is worthy of public ridicule.

Predictions For The Future

I predict that the brave young entrepreneurs of today will become the retired old people who sell their empires to the young of tomorrow, from which the cycle will begin anew.

History has a way of repeating itself.

One Comment Add yours

  1. The Wandering Mouth says:

    Cool post, it was interesting. I’ve never thought too deeply into before. Thanks 🙂

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