The definition of insanity.. The Music Industry

There is an old saying that the definition of insanity is, “Doing the same thing over and over again expecting the outcome to change”

I think of this saying everytimeI hear about music industry efforts to impact piracy.

Insanity is thinking that kids with more time than money will stop finding ways to get music for free. Even if the industry found the end all be all DRM solution that stops 100 pct of duplication, kids will sit in front of their radios with recording capability or redirect digital music from any source to their hard drives and then spend the time to pick out the music they like and burn it.

Insanity is thinking that piracy is the reason music sales are down and then focusing most of your business on selling music to the exact demographic that has the most time to spend on finding free music and most energy to spend on cracking whatever protections you introduce.

Insanity is ignoring year after year, the demographics with more money than time. Those who aren’t willing, or don’t have the time to troll through the net to figure out which network has the most music to download, searching for songs, picking out which peers to try to download from and then hoping it all worked out right. Those who would prefer to just buy music in the easiest way possible so they can get on with enjoying their music and their lives. Isn’t that why we buy bottled water? It’s easy and convenient?

Hire someone from Starbucks who understands selling music to demographics who are happy to buy the music they want in a setting they enjoy.

Insanity is repeatedly telling everyone that piracy stops the creative process by preventing artists from making a living and then time and time again, going out and giving advances to bands. Hello McFly, every start up band thinks the money is in getting the advance of a record label deal, not from selling music. They are just as motivated as ever to make music.

Insanity is continuously trying over and over again to “fix” the CD ripping problem hoping to find DRM software that makes the process more difficult and deters the “good people”from creating illegal copies, while completely ignoring DVDs as a solution. A DVD only allows you to use its increased storage capacity to add more value through more music, games, video, pictures, software, whatever, at about the same cost of a CD, while being far more of a pain to rip than any DRM/CD combination the industry has ever come up with. Dual release on DVDs and CDs and over time elimination of CDs will have far more impact than any DRM on CD solution.

Insanity is watching the digital download services develop customer relationships with music buyer after music buyer, while year after year the labels have none. When are you going to learn that it’s not only about hitting the numbers for Wall Street every quarter but investing in your customer base. ITunes, Amazon, Netflix, CinemaNow and others have my credit card on file and can find me and sell me something in seconds. Create your own services and sell the music at a deep discount to Itunes and the others. Make it easy to buy, cheap to own. The short term pain will be well worth the long term gain

The music industry has a very unique opportunity to really re-establish itself as a growth industry. It’s not like they don’t know all of the above. For whatever reason, they just love to do the same things over and over… Which to me is just insane

72 thoughts on “The definition of insanity.. The Music Industry

  1. Comment #57:

    Have to agree with Dana. I turn the radio on and all I get is old stuff that sounds old. Plus ENDLESS amounts of advertising.

    I do not have timee to spend hours searching for good songs at any point in a week, in any week in a year.

    An intelligent businessman would revive radio by combining a label that screens artists with an internet AND broadcast radio station. Would need to be uber funded to be effective and successful.

    Mark, please do this so I can once again ride in my car, listen to FREE radio, listen to a new song that reasonates, then buy it when I get home and talk about MUSIC again with my friends.

    Music has become dead to me in it\’s current state, and my old 4,000 record (then CD collection) contains most of the music currently on most broadcast radio stations. Really pissed off that music has exited my lifestyle. Used to be a big part daily.

    Can\’t you do something? I don\’t want to have to.

    Chris

    Comment by Chris Caffee -

  2. Do any of you people know what the future of music will be? Nothing but crap artists making no money and putting out crap home recordings. And why will this happen? Because when nobody wants to pay for music any longer then I hope you all get what you deserve. CRAP MUSIC. I just feel sorry for all the artists whose sole source of revenue has vanished thanks to MP3 theft. 95% of artists never see any money from sales. They will all end up sleeping under bridges with this new \”business model\”.

    Comment by Roger -

  3. Mark- You hit the bullseye. The music business does have an opportunity to re-position itself as a growth industry however they are choosing to play victim instead. I\’m not shocked by this whatsoever. The music industry wants as much as they can get and because there are so many channels for artists they are losing control. Artists don\’t need labels anymore. Bottomline is that if the industry doesn\’t start playing nice they could find themselves in a serious situation.

    Comment by Max -

  4. This just in! I just found the way to combat piracy and encourage the purchase of CD\’s and it\’s the reason I still buy CD\’s even if I download I still buy the CD\’s I like because what happens if my computer crashes or my iPod burns up in my back pocket? I will lose all the music on my electronic systems but I can still go into my music room and pull out my favorite CD and load it up again without paying again!

    It\’s a shame when you have over 40 songs on your iPod and its gone in the blink of an eye.

    Comment by Sencera Bright -

  5. The music industry is not dying. The record business is! Content is everything these days and hedge funders and private equity investors are gobbling up copyrights like crazy and running the new companies. At the executive level the conversations are never \”Have you heard..\” but \”Did you see who bought…?\”. Modern technology has made the possibilities for distribution endless. This combined with the lack of creative types in high level positions has resulted in intellectual properties being traded like stamp collections.Let music people run the music business!

    Comment by Dave Durocher -

  6. The music industry as we knew it 10 years ago is dead. Most everyone knows it except the companies themselves.

    What I’m more curious about is the proliferation of free phone service from services like Skype. It will take the remaining pieces of the landline phone industry that wireless hasn’t taken already and crush it to bits. Even worse, they don’t even have the phony intellectual property arguments that the music biz had. Will the baby bells (Verizon, Qwest, etc.) continue to fight a losing battle or will they just pack it in and focus on leveraging their assets? We’ll see.

    Comment by Greg -

  7. The music industry as we knew it 10 years ago is dead. Most everyone knows it except the companies themselves.

    What I’m more curious about is the proliferation of free phone service from services like Skype. It will take the remaining pieces of the landline phone industry that wireless hasn’t taken already and crush it to bits. Even worse, they don’t even have the phony intellectual property arguments that the music biz had. Will the baby bells (Verizon, Qwest, etc.) continue to fight a losing battle or will they just pack it in and focus on leveraging their assets? We’ll see.

    Comment by Greg -

  8. I agree on the DVD ripping. I recently bought a CD/DVD DualDisc (one side DVD, one side CD). The CD had some sort of DRM, and rather than mess with it, I simply ripped the AC3 audio tracks off the DVD. Those can easily be converted to whatever format you’d like, or alternately played in their original format.

    Comment by Nick Reed -

  9. You are two steps ahead of everyone else as usual. I guarantee you that all of the research to develop a CD technology that is unrippable yet works on all players is completely fruitless. Not only are the people you speak of with more time than money smarter than the average record label exec, they are smarter than the people paid to develop the technology. Present them with a lock and they will swarm to be the first one to pick it.
    If I owned a record label, I would embrace technology, accept the fact that some people will not pay to listen to my music, and cater my business around those consumers who actually do want to pay for music. Hiring a guy who thinks like you do wouldnt hurt either.

    Comment by Rob -

  10. Well, yes, the songs suck..
    especially when people are using crap like polyphonichmi and thier “Hit Song Science”.. when the studios don’t bother to listen to the song unless HSS tells them it scores somewhere in the acceptable range.. When musicians have to pay each time they record a song to have the song run through HSS so it will even be considered..
    it is not science, it is music…
    and billions of dollars, “created bands”, bribes to radio and television and the battle of the biggest budget is all sucking the soul from it..
    They complain about pirates taking the music, yet they post record earnings..
    I can’t wait for some new labels to supplant the current labels.

    Comment by joeldg -

  11. Business history shows that the “Music Industry” is doing what all changing/eroding/evolving industries do – they fight.

    Look at the food preservation and photography industries. In the advent of refrigeration, the ice industry vehemently fought, to no avail, to maintain the status quo. Kodak, once the dominant force in photography, is a shell of itself and a fringe player in the digital market.

    The companies you mentioned (ITunes, Amazon, Netflix, CinemaNow) are some of the candidates to capitalize on the changing environment.

    Even though music companies have the resources and impetus to adapt, they will chose litigation and anti-piracy techniques – all while customers flock to new, emerging channels of distribution.

    It will be interesting to see who survives and who thrives in the next few years.

    Comment by Wade -

  12. I definitely agree that they are not marketing the right people to buy CDs. Those of us that work our rears off, try to find time for a social life, and then have to some how find time to relax a little are not going to spend 10 hours a day fooling around on the computer and downloading music. I just pick up the CD at Wal-mart while I am getting my groceries. It is easy.

    I have never looked at it the way you described, but you are right…they keep going down the same road to solve the problem, forgetting that road is a dead-end. You would think somebody in the industry would have a better idea and not be grid-locked into the same thought processes that haven’t worked thus far.

    Comment by Bee -

  13. The issue is “fear”. It’s #1 on everyone’s motivation list and everybody uses it: goverment, churches, parents, as I look down on the street corner below, two bums are competing for one spot. I’m guessing fear will determine the victor (though it looks like a bag of doritos has now entered the negotiations).

    Having worked in the music industry as one of those who has some influence over the Billboard charts, as it were, I can tell you that fear has always driven it. Here’s why:

    A) The major labels bowed down to the retailers who threatened to squash anyone developing a digital download system that would threaten the distribution chain status quo. Year: 1999. To this day less than 10% of music is sold online, so this issue still applies, and will continue going forward — WalMart, Best Buy, etc. are rough to deal with when you’re talking about even a penny out of their pockets.

    B) Downloading lawsuits are a knee-jerk reaction (and I might add, according to my lawyer who represents several majors, not all that costly to enact, unless it all goes to court — which would be an interesting class-action countersuit by the downloaders if they found a firm to take the case on contingency)

    C) You see so much emphasis placed on the advertising of young artists, right? Reasearch tells us (yes, even the major labels do a little of it) most base fans develop when the act is young. Then once popular, others jump on the bandwagon. It’s very difficult to create a fan base for a 1st time older artist (there are exceptions). Believe me, it’s been tried a thousand times because the labels really don’t like being beholden to a bunch of brats; they’d rather work with older professionals, but it rarely adds up.

    D) Humans are creatures of habit. Music DVDs will replace CDs; but remember how many people complained about “what do I do now with my vinyl collection?” Sales volumes are already bad enough without adding yet another medium to the customer’s already confused mind.

    The label solution: The labels are hoping to become one company with one computer sitting in the middle of one room. Sure they might have one executive making the ten necessary calls a day (Clear Channel, Infinity, WaltMart, Best Buy, etc.); The rest of the tasks: publicity, marketing, etc. they can just farm out. A&R they began farming out in the late-90’s to producers who develop projects and bring them to the label finished — that continues today. So what’s left? Only the shareholders, who hope to cash in on valuable catalog and an occasional new release.

    Artist solutions: If you’re Madonna, etc. you can easliy hire your own executive to make the necessary 10 calls per day, execute your own DVD deal with WalMart and Best Buy, do your own promotions with Clear Channel (Lord knows you’re doing enough free concerts for them anyway), and keep everything for yourself. Most artists don’t like dealing with this stuff, but with some independent financing and a little business management on their side, the opportunities are endless.

    Mark — the ball is literally in the court of guys like you who can see the big picture as the labels recede. While the labels are reeling, and every penny they make goes to pay off the interest on the expansion loans they took out in the late-90’s, there is a chance for established artists to partner with established entrepreneurs. If the labels are so insane, which they’ve always proven to be, lets show ’em how it’s done.

    Comment by Sean Sullivan -

  14. In response to Damon, it is because FillinyourbrandofSchlockhere sells. If you could come up with a product that costs you 5 cents to make and could sell 2 million of them for one dollar, wouldn’t you?

    Sure, I can’t stand that music as much as you do, but that doesn’t mean there aren’t bands out there that are good. Don’t depend on the music industry to tell you what to like or deliver to you what you should like. Get online, do some searches to find some music that is up your alley and buy it directly from the artist. They will appreciate it and you will have bucked the system.

    Comment by Dave -

  15. Isn’t it fair to argue that the industry’s lack of a sensible and effective approach to selling music in the digital age is a reflection of the fact that – although they complain about piracy, dropped sales, etc. – the industry is still making a mint?

    I think what’s happening is that they are trying to ward off a significant intrusion into their business model while poking around the fringes of new sales channels, but overall the industry hasn’t changed much because it doesn’t really need to.

    Yet.

    Comment by Zon -

  16. Mr. Cuban,
    I agree with you whole-heartedly. To support your arguement, I present this website:

    http://www.billboard.com/bb/charts/airplay/contemporary.jsp

    This is the top-20 Adult Contemporary chart; the chart which is most focused at the people who have money and do spend it.

    What you’ll notice is that EIGHT of the top 20 songs have been on the charts for more than FORTY weeks. Not only are the “next big things” not getting exposure because “Heaven” is in its 59th week on the chart, but we the public are being tortured with the same old songs to the point that we either seek other means of entertainment or desperately seek new music through unconventional means. How are we supposed to go buy new music if we never are exposed to it on the almighty radio? How would TV stations do if they aired the very same episode of Seinfeld every night for 59 weeks?

    My prayers are that the payola thing will get full-time professionals at local radio stations to regain control of their playlists and add more good new music instead of leaning heavily on the stale charts.

    However, I know better, and I’ll continue my curiosities with talk radio and podcasts in the meantime.

    Dana McCall, DDS
    Raleigh

    Comment by Dana McCall, DDS -

  17. Two things: First, how about getting the music industry to go back to producing bands who could actually make good music, instead of constantly looking for the next Brittney Spears/Madonna/98Degrees/FillinyourbrandofSchlockhere? Music today sucks because Sony is depending on payola for success instead of quality.
    Second, ripping from DVD’s isn’t nearly as difficult as you are making it out to be. Two steps to .wav, one more to .mp3 or .wma.

    Comment by Damon -

  18. It would be interesting to see what artists would rise to the top, if the music industry died and all that marketing muscle was gone. I think most bands know by now that the recorded company advance is nothing but a scam. You can read what really happends to new bands in this paper by world famous producer Steve Albini.

    http://www.negativland.com/albini.html

    Comment by Dirty Muffin -

  19. Wow, this post would’ve had a lot more importance a few years ago back before the topic had been discussed to death. Since then, you’d basically just repeating what the rest of us have been saying since day one.

    That said, I do take issue with a small point. You suggest that the music industry deal with us directly. That is not and never will be thier business model. They get the LARGE majority of every song downloaded on iTunes. $.55 of every $.99 song goes directly to the RIAA. And the best part is… they’re getting the lionshares, while Apple is left to use their ($.34) to pay for the bandwith and service costs. Your idea that the RIAA is missing some business opportunity is assuming that the record label is something other than what it is. Think of it as a leech that rides on the back of a larger creature it needs to survive. It lashes on to an artist and then gets paid to let other people sell the music… in other words, they get the lionshare for doing almost nothing. They have never been about selling products to consumers. They just reap the profits that retailers make by selling the music.

    See? The RIAA isn’t missing any opportunity. The made money from people buying CD’s at Best Buy… and now they’re making a boat load of money from people buying songs on iTunes. Think about it… they’re making $.55 for each song. They don’t even have to pay production costs… Apple handles all the costs when it comes to distributing the files. Basically, the RIAA gets $.55 just for allowing Apple to sell the music. To top that off, iTunes has sold over half a BILLION songs thus far. Online music sales are still increasing at an incredible rate.

    The RIAA are a greedy bunch, yes. They don’t really have any purpose in the music industry, true. But missing an opportunity? Hardly. They may be greedy but they aren’t stupid. They’re making $.55 for doing nothing. Why would they possibly want to give that up, there’s no way they could keep that profit if they provided the files themselves. And secondly, they simply aren’t in the business of selling directly to the consumer, they let companies like Apple and Best Buy do that. The RIAA just collects the bigger check at the end of the month.

    Comment by James -

  20. agreed, entire is just crazy….so crazy i’m going back to my wine, cheese, and book (Manhook by Ken Ratcliffe) <--- great corporate thriller by the way if anyone is interested.

    Comment by Joshua -

  21. You are absolutely right, that entire story definitely is insane. Hopefully, anyone of the music industry will wake up one day (though this requires certain luck, I fear).

    Comment by Jens Meiert -

  22. #13,

    Try going on some of the p2p networks and you will see some christian music being illegally shared.

    Comment by eddie -

  23. I know this wasn’t the main point of your post, but I have to comment on one line:

    “Hire someone from Starbucks who understands selling music to demographics who are happy to buy the music they want in a setting they enjoy.”

    As a web developer in Plano, I spend quite a bit of time at Starbucks. Until recently, I enjoyed the music that they played and even took pride in hearing artists that I had “discovered” months before.

    Then they put Alanis Morissette on a continuous loop. I was a fan of Alanis a decade ago, and I can still stand some of her music now, but her songs dominate 50% of the music that I hear at Starbucks.

    I understand that music sales have generated significant revenue for them, but is it worth killing the brand of “cool” that they’ve so painstakingly built? I can no longer spend more than an hour or two at a Starbucks before leaving in disgust.

    Last week I submitted one of only 2 complaints that I’ve ever sent to a major corporation. When I called their complaint line I was put on hold. The song that was playing… “Isn’t It Ironic?”

    Comment by Matt Dean -

  24. Been reading the blog for a long long time, always enjoy what you have to say Mark. I must say you really hit the nail on the head this time! The Music industry, like many others of the past has begun using only a strategy of protectionism and nothing more. No innovation. That is why they are dying. I hope more people realize it.

    BTW – I am one of those young geeks who for years had plenty of time to scour P2P and build a large mp3 collection, but with Yahoo Unlimited, it was too tempting to not go legit. Never again have to deal with messed up ID tags or sound quality. The subscriber music model is pefect for me. I even get to put all the files I want on my Zen Micro player for use in the car, work, or anywhere else. I don’t know if I will ever buy another music cd in my life. I support bands by watching them live and through merchandise.

    The music industry just doesn’t get it. You say they do, but I don’t feel it. The “digital download services” are innovating, and that is just what music needs.

    Comment by Chris -

  25. DRM experience just tonight. My daughter purchased a CD and wanted to move the music to her iPod Mini. She couldn’t understand why iTunes wouldn’t “upload the CD,” so she brought said CD to dear old dad. DRM was the reason, naturally. Sony BMG Music label, not surprisingly. Somewhat ironically, the CD is Christian music. Like, my daughter is going to illegally share her Christian CD? I told her I’d set her up with an allowance on iTMS, and next time she can just purchase the music online. Way to go, Sony! Score one for DRM.

    Comment by Brian -

  26. Mark, I agree . . . . . . . now come on and get into the the music biz.
    rh

    Comment by Roger Hoges -

  27. I can’t pretend to speak for the majority of the people who are interested in music, or even for all of my peers. From my perspective, here are some fundamental things that are making the music industry completely nuts at the moment for consumers:

    1) Radio has been abandoned in most markets as anything other than a promotional channel by a few large corporations. FM radio, anyway. Doesn’t seem to matter which genre, either. This excludes things like talk radio. XM/Sirius have potential, and seem to be depending on the programming talents of actual people, not committees.

    2) It would be nice to hear music created by groups or individuals who formed on their own, not as a product of some musical assembly-line who put formula elements in place accordind to what a collection of accountants tell them. This approach is more filled with the danger that something new and different will be created, and that’s hard to package. This is also why most contemporary Disney movies are not interesting – the predefined elements are in place, but they lose the story in the process.

    3) iTunes and the like are wonderful, and have the potential to become the standard distribution path for most digital content. The problem I have with iTunes, for example, is that the resolution of the delivered product isn’t much better than metal cassette tapes were 20 years ago. As bigger pipes become more common, why not deliver the highest-quality music or video possible to those who purchase it? 60 cents for a single track, $1 for that same track at full resolution? Is it that most people can’t tell the difference, or that they don’t care for nuance?

    I’m a musician, and have a great deal of hope that we are always going to have a vital and energetic creative culture making music and art. I just want it to be a little easier to find the things I want to hear and see, without resorting to the peer-to-peer worlds (which don’t really connect you well with qualified content, just known content).

    Comment by Metropolitan -

  28. The Quote is usualy sourced to Einstein:

    “Insanity: doing the same thing over and over again and expecting different results.”

    Wiki Link
    http://en.wikiquote.org/wiki/Albert_Einstein

    Ice Rocket
    http://www.icerocket.com/search?tab=blog&q=insanity+doing+same+thing+Einstein&rss=1

    Comment by PRoales -

  29. DRM is perhaps one of the most snake-oil cures I’ve ever seen in my life.

    Meanwhile, new and upcoming bands are using Creative Commons–giving them less control–and some are damned good. Perhaps a new and fascinating marketplace will emerge from it. At least, that’s what Tryad is hoping…

    http://www.tryad.org

    Comment by John -

  30. Organizations always have an inertia. Every individual of an organization might see the writing on the wall, the fact that things have to change to avert extinction, but still an organization will sometimes not change. Actually I should not say “sometimes” because mostly that’s the case.

    People in the Soviet state knew that their system didn’t work as early as the seventies. They knew things would only get worse, but that wasn’t enough to make them take on the risks of change. It’s not the threat of disaster that usually lights a fire under people’s asses, it’s the disaster itself.

    I don’t know enough about the music industry, but looking at the way they continue with their old ways, one can only imagine that the pain they feel now is not very severe. If it was severe, then they’d be taking drastic action the way airlines are for example.

    Am I wrong?

    Comment by Horsey -

  31. The music industry has never cared about anything but profit. They still have high hopes for electronic music where they can just have machines make the music and get rid of people.
    I’ll stick to the indie scene.

    Comment by Warchild -

  32. Ah yes, and let us not forget that internet radio is a huge help for record sales and promoting artists.

    But alas Mark, it will end soon for the small guys thanks to you and your backdoor deal that broke the small webcasters back. Give me a break and tell me 1 thing good you have done for internet radio? Dont take to long thinking now…. anything….anything….BUZZZZZZZZZZZZZ Times up…. you cant think of 1 good thing because you have never given back to what made you millions. You only made it hard for the next person to be successful in the streaming world.

    Comment by Joel Platfoot -

  33. Mark, although I agree with you in that the music industry is a nasty beast that seems to ignore logic and reason (I was a band manager in 90’s in Dallas and do I have some stories!), I feel it necessary to address only one thing. It appears that the public loves to semantically smooth out concepts that are hard to take on for face value. When we kill our pet, we tell ourselves we are “putting it to sleep” or “putting it down”. When we go out and get a buzz from a few beers, we tell ourselves we are “having a social drink”. In a war, when a missile kills the innocent, they are “casualties”.

    !!When we steal music and software, we tell ourselves we are “downloading” and “burning”!!

    You said “Insanity is thinking that kids with more time than money will stop finding ways to get music for free”, instead of “…finding ways to steal music.”

    For now, let’s call it what it is (and keep their lawyers happy): Stealing. Let’s also call the music industry for what it is: INSANE!!

    Time needs to tick along for you and I–and anyone else who shares our frustration–to be happy with the music ‘scene’. Time, armed with the exploding technology of the fast paced internet, will slowly subtract the middle men more and more just like we have seen in the travel industry and soon we’ll see in the real estate industry. Then we will not have to put up with lame joke bands and performers presented to us by this industry, and the music will be cheaper, and the bands richer.

    And bands like Pain of Salvation from Sweden will evolve at a faster pace…

    http://www.painofsalvation.com

    Comment by greg -

  34. Not only are record companies “selling music to the exact demographic that has the most time to spend on finding free music ” they are also SUING that same demographic for downloading music….and then expect them to come back to the fold. It would almost like you filing lawsuits against NBA fans and then expecting them to come back and see some games! I mean, no way! The music industry has been overcharging people for years, abusing and stealing from their artists, saturating the radio with crap using payola and ignoring the emerging technology. Now, it has come back to bite them on the ass. Satellite Radio, iTunes, how do I love thee, let me count the ways….

    Comment by michael d -a true mavs fan if there ever was one -

  35. Rock on Mark, I completely agree with you. It’s definitely a fine line to walk, by looking the other way you inherently condone the action, however, it is clear that the music industry has only hurt its reputation and the industry itself by targeting their consumers. Every business has theft, from the major retailers, to the mom and pop bottle shop, but you don’t beat theft by ‘catching all the bad guys.’ Can you imagine if the mom and pop bottle shop sent a chaperone to walk around the store with you as you browsed, or worse, frisked every customer as they left? The result would be a severe decline in sales.

    The only way to combat the criminals that are NEVER going to go away, is to provide a level of service, both in quality and price, that removes the incentive (or impact) of stealing. For the mom and pops, it’s knowing the names of the clients and sharing a passing moment. Who is going to steal from ‘Aunt Betty’ behind the counter that was selling you gum from the time you were 5? For the bigger players, it’s about value. I pay $15 for block buster movies that are packed with neat details about how things were made and who adlibbed a great scene etc. Why should I pay $15 for a crappy album that cost 1/10 the price to make?

    Personally, I don’t spend much time listening to music, and I pay for what I have, but I sure don’t buy albums chock full of crap for $15. When I do buy an album, it’s because it is SACD/DVDA (notice, I paid for quality) and a solid piece of music with incredible sound. The music industry should quit trying to get people to stop stealing and start giving them a reason not to.

    Comment by Rob Witman -

  36. That is a good point about trying to move towards DVD’s and away from CD’s. The average person is not going to want to figure out how to rip music/video off of a DVD, but even my mom who can barely use a computer can use Windows Media Player to get music off of a CD.

    Comment by actionBERG -

  37. A number of years ago you could get six to eight good songs on an album. Now all you get is one good song. Who wants to pay full price for a CD for one song. The quality of songs written and sung has declined in last thirty years across all types of music.

    Comment by Jim Sawyer -

  38. Mark,

    I think it’s silly to believe piracy is not the reason music sales are down significantly. When I was growing up almost everyone had a bunch of cds. If we could have gotten it for free believe me most of us would have done it.

    However, I agree with you that the ship has sailed and music companies need to adapt. But I doubt they’re spending that much time fighting piracy – hiring a bunch of lawyers simply costs them money which they can easily spare at this point.

    I will say I find it ridiculous that people claim LESS people will steal music if the industry will only put out a better product. Let me get this straight – you’re stealing a crappy product but if that product were better (meaning it’s worth MORE but cost the same) you would pay for it? So instead of stealing multiple singles off the same album you would actually shell out the $15 for the CD? It makes more sense to think that you would simply download all the singles(or album) for free.

    Laughable.

    Comment by jsho12 -

  39. If you’re Madonna, etc. you can easliy hire your own executive to make the necessary 10 calls per day, execute your own DVD deal with WalMart and Best Buy, do your own promotions with Clear Channel (Lord knows you’re doing enough free concerts for them anyway), and keep everything for yourself. Most artists don’t like dealing with this stuff, but with some independent financing and a little business management on their side, the opportunities are endless.

    Comment by runescape money -

  40. Artist solutions: If you’re Madonna, etc. you can easliy hire your own executive to make the necessary 10 calls per day, execute your own DVD deal with WalMart and Best Buy, do your own promotions with Clear Channel (Lord knows you’re doing enough free concerts for them anyway), and keep everything for yourself.

    Comment by wow powerleveling -

  41. Piracy it certainly полохо for manufacturers of music, films, games. But покаким to the high prices license disks are on sale. It is too expensive for poor people to buy such dear disks. Therefore the piracy was, is and will live, while manufacturers of disks will not make them more cheaply piracy spears!

    Comment by whales -

  42. That is a good point about trying to move towards DVD’s and away from CD’s. The average person is not going to want to figure out how to rip music/video off of a DVD, but even my mom who can barely use a computer can use Windows Media Player to get music off of a CD.

    Comment by Naz -

  43. Piracy is all over the world. All I can say is, If there is no demand, nobody will take effort doing this kind of business.

    Comment by showertrailer -

  44. If these moronic record labels don’t wake up soon, they are going to be losing a lot more money real quick. I agree that moving to DVD’s with value added content is a smart move. But on the whole these guys sure are slow to catch on. how long did they think people would keep paying 15 bucks for a drink coaster. They flipped when radio came out too, now the DJ’s are getting paid for spins… is anyone surprised at this madness?

    Comment by The Record Deal Doctor -

  45. Mark, you are an idiot.

    Your one dimensional arguement completely disregards the anxiety at a lot of small labels that they are being robbed blind. Not just by some kids in IRC/P2P, but by gangsters up and down the country making serious cash from their CDr/DVDr business on eBay and in markets. Millions of pounds worth of pirate music products are seized every year by the industry and the criminals behind the piracy are put behind bars.

    Is this “insanity”?

    Tens of thousands of eBay auctions for pirate product are taken down without any need for criminal sanctions. The same goes for IRC, ftp and http content.

    A perfectly rational, sane, proportional approach, surely?

    As for p2p, what exactly is your problem? If you had to make your living from copyright alone, you’d want to sue people who were undermining your ability to do business. People in these networks are traffiking in illegal copies prior to release, thus reducing sales. I just don’t understand why people like you don’t see the fundamental economic damage piracy does and why the music industry as a whole has to tackle it.

    Comment by Brian -

  46. Comment #59 (foam head) hit it on the mark. look the record companies know that with the digital explosion happening in the recording process as well as the distribution process, its a matter of time before established artist such as (Prince, Madonna, korn and several country artist) just bypass the major labels and go directly to people like steve jobs (itunes) and anyone else that will digitally distribute there music. they already have a fan base and there are lots of different industries that will put up marketing money to be in business with any of these established artist. the companies also know that with digital distribution all there contracts MUST be changed and more geared towards a true partnership with the artist, which means sharing the bottom line, and you they don’t want to do that. now is the time for artist that have always complained about how unfair the industry is to now do something about it. if a few major artist go directly to services like, itunes, napster and all the rest of them, lots of artist will follow, and the brick and mortar music business as we know it would crash and burn with in months. change hurts, when your financially invested in the old way of doing things.

    Comment by Chano -

  47. Stop helping the music industry, Mark. Someone might actually listen and change. The industry has had every chance to do it right but instead they’ve chosen to hurt their customers whenever they can. Screw ’em all and let ’em die. Let the industry get obsoleted by artists selling directly to services like iTunes and Napster and then we can sit back and enjoy the bliss of universally accessible and reasonably priced digital music.

    Comment by Foam Head -

  48. You know what’s insane is the fact that there are so many great bands out there today (including a bunch in England, including Razorlight, the Kaiser Chiefs, and many others), but they never get airplay because their music won’t help the shareholders of the company.

    How did we get to this point? And, as someone earlier said, how come there are no more great albums? That is, there may be CDs out there with 3 or 4 good songs, but no CDs that are cohesive and solid from start to finish.

    It’s very sad to see the wreckage of the music scene out there today. I have to search hard to find the truly great bands out there, and many of them just have 1 album because they can’t get any recognition.

    Comment by Travel Guide of America -

  49. what’s DRM?

    Comment by music -

  50. Dam good posting.I read some of you’re articles and they are really nice.
    I enjoyed reading them

    Comment by Paul -

  51. The stagnation of the music industry is single-handedly the most frustrating environment I’ve ever had to endure. My only wish is that I could find the acumen to be able to fill this gap in the music biz. “What a wonderful world it would be”!

    Comment by Rod Murray -

  52. The stagnation of the music industry is single-handedly the most frustrating environment I’ve ever had to endure. My only wish is that I could find the acumen to be able to fill this gap in the music biz. “What a wonderful world it would be”!

    Comment by Rod Murray -

  53. Music today is “substitute porn”. It’s more about sexy bodies, dancing, editing, and camera angles, than music. Something I noticed about music today: music used to be therapy for the audience. Now it’s therapy for the artist. Which is why it’s so unsatisfying, for the audience.

    Comment by Brian -

  54. Hi Mark, et al.

    This isn’t really a new topic for you. I applaude you bringing this issue to the forefront now and again.

    Is this an arena where you could provide some help? It seems like you have some very strong beliefs about how the music industry needs to change and have some very good ideas on what exactly should happen. How strongly do you feel about it?

    As strongly as you felt when you decided you could do better with the Mavericks? Do you believe you could do better with the music industry?

    If so, buy a good record label that produces a number of artists that are in demind. Effect change. The music industry is covering their ears and yelling “LA LA LA LA LA” and not listening to anything anyone has to say about music-stupidity.

    -Tor

    Comment by Tor -

  55. I second that you should get into this business. I enjoyed what you had to say at the AlwaysOn Innovation Summit, and I think you were the only one of the bunch with a good understanding of reality. I’d like to talk with you about my company which is a music industry replacement for both artists and consumers, and I’d bet my left nut that you’d jump right on top of this. Hope to hear from you soon,

    Scott
    http://www.tubesmusic.com

    Comment by Scott -

  56. 49 was an interesting post… Some really intelligent people on this blog.

    GEEEZ where to begin???

    First, the labels should have worked with Napster. Guess what? They tried! Napster’s founder’s uncle screwed it up in the venture rounds. Shawn’s big purpose was to work with the record labels all along and make it legit but the vision got destroyed by greed.

    Okay, so now to my real comment. Here’s what is killing the industry:

    1. DRM – – – When you purchase music online, you don’t own it. When you get it from p2p, you do own it. This means you get to do whatever you want with it. Give it to Grandma, burn it to CD, transfer to a portable device, etc. DRM damn you! Guess what – DRM is here to stay and will even be included on your next DVD purchases (coming with the new formats).

    2. MEDIA CROSS-OVER – – – Telecom, Internet, and Television (Cable) are merging into one big channel. Communication, audio, and video are all together. Again, this means that the little guy gets a better shot and can screw up the big companies’ plans. The problem is that the little guy doesn’t have a million dollars to market himself! PS – Watch out for podcasting – you’ll see the cream rise to the top for the underdogs, then they’ll get swooped up by the big marketing machines for transfer to XM or Sirius. The little guy can win, just not very often.

    3. High Prices – lower your damn prices and you’ll have a digital song go digitally platinum in the first day! How about reviving the album model again by selling albums for $4.99 or something?

    One solution? Get it from the Russians. They’ve got the perfect business model. They charge you for bandwidth and the music is free. Guess what again? They are cleared through the Russian version of RIAA and are actually paying the appropriate licenses to make it legal. Although it is questionable, it was challenged by Russian courts and won via a nice loophole. The American RIAA has talked with them but cannot touch it!
    http://www.allofmp3.com

    What a great idea. Offer it like Mark C said – bottled water. It’s cheap and easy AND I can get it in whatever quality I want – FLAC, .ogg, mp3, etc. What a brilliant idea!! Different formats? Duh!

    4. FEAR AND GREED – the entertainment industry is full of these traits. One minute it’s fear, the next it’s greed. There’s no happy medium here and they never really want a WIN-WIN situation. If they had more scruples they would be better liked (maybe they’d be bankrupt though)…

    5. LACK OF CONTENT – the music industry needs a major change… Someone like Snoop to say. You know what? I’ve made my millions and the next album is going to be completely free and I don’t care if you copy it! Spread the love!

    Keep in mind that several distributors are focused solely on the digital market. Unfortunately, they work on a fee basis so there is no real screening involved with the artists they distribute. So the little guy falls further into the bottom of the pack because the digital retailers are inundated with crappy music. The fact that anyone can record now and ANYONE can get distribution both helps and hurts the little guy.

    The bottom line is that some real stars need to take the bull by the horns and inspire a change. You can go on your own now and get distribution through digital retailers and literally keep half of the gross monies made!

    Although I’m still searching for the solution as to how the longtail gets put into play finally! There’s the future of the industry and what will break the strong camel’s back – longtail! If people stealing billions of files that are your products and your label is still open, then you’re obviously price gauging the crap out of the consumer. The consumer is indeed a sleeping giant and p2p was the wakeup call.

    Peace in the east and I welcome comments and/or further discussion🙂

    Rio
    rioworld@usa.com

    Comment by Rio -

  57. This whole single song download thing that seems to be getting out of control… I’m an engineer and producer in the music industry & I went to that ‘Death of the Record Business’ seminar that NARAS put on in Nashville. After attending that and hearing what everyone had to say, I feel that we, as an industry, have been going about the download thing completely wrong… and here’s why:

    In hindsight, it’s my opinion that, we (the music industry) should have found a way to work with Napster, and other ‘rip sites’ instead of ignoring them initially, then when they actually seemed to ‘supposedly’ threaten our livelihoods, the industry tried to kill them. All this did was make a cause for kids who, up until that point, were rebels without causes. Fight the man! And so on… Now that the flood gates are open, and hemorrhaging ripped downloaded material, the industry is trying to shut them with services like I-Tunes etc., then suing the kid in his bedroom that is ‘stealing’ ripped free downloaded material. To me, this is a lose, lose situation because other people see this and it makes the music industry appear greedy to the kids, so in turn, they fight the evil oppressors (the music industry) and hence the illegal downloads continue to grow. I’ve also come to recognize that given the standard deal that the artist makes for single song downloads, the artist is making about a penny per download… not that much unless you’re talking enormous quantities.

    Having said that, here is what I purpose… Be ware, this is a radical proposal, with almost insurmountable obstacles, which is why I’m posting it to get other people’s thoughts on it. Ok, here goes… Conventional radio is dead… I think we all know this. I think the internet is the next ‘radio’. The music industry should offer all music downloads for free, and instead of worrying about the mechanical licensing, treat each download as airplay with the proper royalty, or make up a new royalty that is specifically for downloaded music. This eliminates all the little single transactions that everyone & their brother take a little piece from.

    Here’s the way I envision it working: Each internet service provider (ISP) company pays into a fund, the amount depending on how many users they have that download music, and after the first year or two, the approximate amount of downloads their customers had the last year. Each user will pay a yearly (or monthly) fee to the ISP, who in turn, allows MP-3 to be downloaded, and also tracks the downloads. The tracking of the downloads is the big question mark in my mind… can the downloads be at least fairly approximately tabulated? If the switch is made from mechanical royalties to airplay royalties, it suggests that ASCAP, BMI & SESAC could become even more involved, and possibly by embedding ISRC codes in each MP-3 file, each song and or MP-3 file would be able to be individually identified and therefore tabulated.

    This is just an overview of an idea that’s still in it’s infancy, but I wanted to get your thoughts as fellow producers, musicians, humans.

    Comment by Chris Milfred -

  58. The Consumer Is NOT Always. I can’t walk up to the ticket booth at a Mavs game and tell them that the price of Floor Seats is $5.

    I buy bottled water because of the fassad that tap water is contaminated and because I dont like the taste of chlorine. Bottom line is I want it, and I want it cheap. So if someone offers it to me for free, bootleg or no bootleg, and the quality is even close, Im taking it.

    However, that does not make it right. I agree that the industry needs to embrace technology and offer customers a better service for downloading the music that they want. But, the public wants the music for free and while that would be great for me and you in the short run, ultimately stripping copyright owners of their protection has the potential of stifling creativity.

    Remember, while the entertainment industry gets all of the attention, the protection of IPRs in general is what is really at stake.

    Comment by JR Hensley -

  59. I definitely don’t feel sorry for the music industry or the bands. If bands want to make money they can get off their ass and go on tour. I haven’t bought a CD in years, yet I’m going to see Tom Petty and the Heartbreakers three times this summer because I love their shows. That’s about $200 in tickets I’m spending on one band, but I’ll never buy a CD again.

    Comment by mark -

  60. Mark,
    You were recently on CNN and you said “when you start giving consumers what they want when they want it” you can stop piracy. you are one hundred percent correct. The problem of piracy stems from prices being to high, and the majority of the money not going directly to the artists (in the music and movie industries). Heres how you fix both those problems at once: Bittorrent. this new software allows for virtually free distribution of media of any size and popularity, and with it artists can sell their work directly to consumers and minimal cost. For instance, musicians can sell cd’s online for 2 dollars (less than a file of fish sandwich, of which a dollar goes to production costs, and a dollar goes directly into their pockets (which is 94 cents more than they usually get with recording companies.) Using bittorrent, you don’t need to get a record deal to be a successful musician, you just need an inexpensive website and talent. The effect of this revolution of media distribution will be that we can support 10 times as many artists as we do now, and get 10 times the amount of content for the same amount of money we spend now.

    The technology for what I’m talking about has already been developed, it requires no investment, only implementation. It has already been widely used in impressive demonstrations of the technology, but so far no one has realized its legitimate economic potential. The website, btefnet.net operated for about a year as a kind of internet television network, allowing hundreds of thousands of people to download every episode of their favorite tv shows in high definition without commercials almost immediately after they aired. An episode of 24 would routinely be distributed from one individuals computer to 80 thousand people in a matter of hours, without anyone paying a dime. I am sure that its popularity means that if shows like 24 (or even sports) were offered on line and on demand at a price that would be payed directly to the creators, millions of americans would gladly pay for their favorite shows without commercial and network interference. In the other instance, a closed community (demonstrating the ability to limit who can and cant download content based on whether or not they have payed for it) of 200,000 people use a website called Emporium to distribute terabytes and terabytes of porn to each other (they distribute everything from divx files to full size, burnable dvds.) A ratio requirement means that the casual user often downloads and uploads hundreds of gigabytes of data, again without anyone paying for servers.

    I am not emailing you out of financial interest. I hope only to gain the satisfaction of seeing the distribution revolution happen as soon as possible, because it will strengthen the american economy and make life more enjoyable.

    I would like to be able to discuss this with you via email or phone in depth, because I am sure once you see the possibilities I am confident that you will desire as i do to see this become a reality.

    My email is mrandretti@gmail.com

    Comment by Robert Cheren -

  61. cool post, Mark.

    the topic has a lot to do with our new documentary, “alternative freedom.” making the film, we discovered that the real insanity is that the big content companies are refusing to change their business models in order to keep control over the industry. these companies do this mainly by manipulating congress into making laws that make it illegal to participate in building and sharing in the joy of culture and technology. it’s long been understood that “piracy” actually helps sell more music and movies- it’s free advertising for the product on the shelves or in the theaters. if these ideas interest you [shameless plug] check out our blog and link to our trailer:

    http://alternativefreedom.blogspot.com

    thanks Mark for calling out the insanity. it’s good to know that someone out there is trying to make a change.

    Comment by Project Free Zarathustra -

  62. Larry Jacobson, manager of Aveneged Sevenfold and one time Senior Vice President of Capitol Records responded to here-
    http://www.worldaudience.com/blog/

    Comment by Jacob Henry -

  63. I don’t think it would be a good idea for the record companies to invest in itunes-like applications of their own. People are not going to install and run ten music apps. Really, each person is only likely to run two at most. Due to Robinson Patman, the record companies couldn’t give each other lower prices than they give itunes. If they price gouged, therefore, they would just lose a lot of money in an ultimately doomed effort.

    Comment by Executron3000 -

  64. I agree with your comments – “they just love to do the same things over and over…”
    This is there way to control the industry/money and their status.

    Comment by jay -

  65. I could not agree with you more. The music biz full of a dinosaurs just waiting for the meteroite to hit.

    How many years of anonymous transactions can this industry endure?

    The end is ‘soon come’

    Comment by Wes Jack -

  66. I could not agree with you more. The music biz full of a dinosaurs just waiting for the meteroite to hit.

    How many years of anonymous transactions can this industry endure?

    The end is ‘soon come’

    Comment by Wes Jack -

  67. I think the reason that record companies continue with this insanity is simple: they can see the future as easily as anyone else. And it doesn’t include them. They are a marketing machine. And if you remember the 4 Ps of marketing- Product, Price, Promotion and Distrabution…..the internet can do all that without them. Or, MUSICIANS can do all that via the internet without them. So they are trying to protect a dead cash cow. I don’t blame them. I wouldn’t want to give up a billion dollar industry either.

    Comment by Jason -

  68. This is a topic which has been festering in many of us. My take on this is how the music industry has indeed abandoned its customers and how the customers just leave — they don’t make a huge sound when they go, they just go.

    Record companies and radio are large corporate conglomerates, more interested in the bottom line than their own product. The old record execs were music fans and music collectors, whereas the Clear Channel executive boards view their product no differently than a snack-food company: demographics and manipulation to maximize profit from small amount of product.

    Consider the album “Songs About Jane” from Maroon 5. Once the radio beat “Harder To Breathe” to death, they moved on to “This Love”, and now “Sunday Morning”. The DJ’s announce each new hot song as “new” Maroon 5. However, the album came out in 2002 — three years ago! Each track is as old as the other. But, in an effort to squeeze as much as possible out of the record, the radio execs only exclusively play one track at a time, for months on end. I think that the consumer is smarter than that.

    Record companies could get away with this until the invention of the mp3, and since then instead of adapting to the natural evolution of things, they’re investing their resources in maintaining their monopoly. Between the litigations and the lies (did they EVER deliver on their promise to have CDS prices go down over time?), the consumer has gotten smarter and moved elsewhere, and has done so with absolutely no fanfare. Now, without that feedback, record companies are blaming external sources (i.e. piracy) instead of fixing the wrong environment they’ve created. Any wonder why I haven’t bought a new CD in over a year?

    Comment by Banzai -

  69. I agree with your comments. Maybe if they spent more money developing acts, instead of spending money on lawyers to go after young kids, they might have a more vibrant industry.
    On http://www.tommygun.memebot.com, they have not addressed this issue, but one day it will given the space it deserves.

    Comment by Tom Snider -

  70. Mark, you’re right on. Only point missing is that , like all forms of culture that impact us, we all find out music through various channels (radio, mp3s, musak at retail stores, bars, live shows, friends at the water cooler… wherever).

    If a player in music is only in one channel which is shrinking, they can either sell (Warner Music), be “insane” with continually flat or shrinking revenues (all the other labels) or diversify. Why not capitalize the costs of touring or get into management?

    Comment by Chip Brown -

  71. Mark,

    right on!

    classical or traditional entertainment, ie. movie theatres,and CDs are in decline. Mostly cause the entertainment landscape is shifting and consumers now have many options.

    managing change seems the issue. entertainment execs don’t want to work. it’s hard to embrace evolving technology, to understand your demographic. to admit that sueing your future customers, (currently have time/no $, eventually lot’s of money) is stupid. to make adjustments, sign cooperative agreements, to substitue elbow grease for propoganda and congressional payola.

    In Asia, CDs are < 0.50, DVDs 3.00. Metric, fact. Asian incomes are a fraction of those in the EU and US. Does it make sense to expect a Chinese worker to pay 20.00 USD for a DVD, who makes 100.00 USD/mo. this is the market adjusting price. if legitimate product was available at realistic prices, Asia would be all over "real" product. Doh! this is the "market" providing entertainment feedback. A corollary, could be, insanity is observing (metrics) things changing and thinking or doing nothing to adjust or improve your circumstances.

    Comment by kurt -

  72. I actually came up with a solution to this problem that would both work with the music industries existing desires, but at the same time, tie into a social network method of distribution.

    You can read about it here: http://www.opinionatedbastard.com/archives/000452.html

    Comment by Pierce Wetter -

Comments are closed.