Is it legal to download music from Canada? Maybe. Read this update on the debate. The author, Jay Currie, also offers an excellent update on file-sharing and the RIAA suits, plus some analysis, consider this:
The record companies could use the P2P networks to publicize their clubs. They could flood Kazaa with current tunes, branded with their label, with a five to ten second promo at the beginning and end of the file. If you want to download Trick Daddy you can get a clean copy with the Trickster himself shilling for his record company’s club.
Adapting to the new digital, P2P reality may be painful. But in this case it is adapt or die. There will, no doubt, be deaths. I would not want to be in the retail record store business at the moment. But the creative destruction unleashed by new technology is already creating new alternatives for artists to reach their audiences.
As Terry O’Reilly pointed out in his 2002 article on P2P “Obscurity is a far greater threat to authors and creative artists than piracy.” And, as 32 time Grammy Award nominee John Snyder suggests in his Salon article, P2P file sharing represents the greatest marketing tool the music industry has ever come upon.
My take: I agree, but let’s get ready for a music industry with far lower marketing expenditures. This will not be pleasant or convenient in every way, as middlemen are not mere parasites, and property rights are not easily disposable. Our best hope is that Internet marketing can replace costly marketing campaigns, which will become increasingly unprofitable.
Addendum: Today’s Wall Street Journal, Money and Investing section, had some interesting figures on Apple’s iTunes service. You are charged 99 cents per song. It costs about 65 cents to license the song. Credit card fees are about 25 cents a transaction (which can include several songs), minus the two or three percent. Right now the service, extrapolated across a year, would bring in only $25 million in annual revenue. When the service is extended to Windows users, this could boost revenues to the store by as much as $600 million, profit by about a tenth as much.
Therefore you spend more money in restaurants, for the full story click here. You spend less when you hear Britney Spears, although you still spend more than when you hear no music. And how about Led Zeppelin? Co-blogger Alex noted not long ago that German music makes shoppers buy German wines, and French music makes shoppers buy French wines.
Here is a link to the original research, also connecting you to a variety of other pieces on music and psychology. Music also makes you more willing to wait in line. And people like pop music more, the more attractive the singer.
A search on Amazon.com yielded 276 distinct performances of Beethoven’s 5th symphony, many at bargain prices. Attendance at classical concerts is steady or slightly up. The classical share of the CD market is roughly constant at 3 to 5 percent. On the other hand, many orchestras are experiencing financial difficulties, and some are closing.
Complaints about the economic fate of classical music have been common for many decades. In fact parts of the 1980s and 1990s — not long ago — were a financial golden age for the classics, driven by The Three Tenors, Gorecki, and replacing albums with CDs. The entire story comes from the Federal Reserve Bank of Boston, click here.
In my view, the biggest single dilemma is whether the next generation of philanthropists will have any loyalty to classical music institutions.
How about classical music on the radio?
Classical music stations have disappeared in many cities; one-third of the nation’s top 100 radio markets do not have a classical station. After 63 years, ChevronTexaco’s radio broadcast from the Metropolitan Opera House will be off the air next year.
I suspect that the future of classical music on the radio lies in satellite radio, read this article from today’s Washington Post. XM satellite radio has about one million subscribers and its classical stations are excellent, long pieces with high sound quality, not just another rendition of a Telemann shortie or a Boccherini guitar quintet.
Thanks to William Sjostrom for the pointer to the article.
Addendum: Kevin Brancato tells us that fewer than one percent of American symphony orchestras have gone bankrupt in recent years.
It’s not surprising that background music can have a significant effect on how people shop (fast versus slow has the expected effect on shopping and dining time, for example). I am amazed, however, that the style of music can affect what people buy. British researcher Adrian North (includes many abstracts of North’s music research) and colleagues split up a wine shelf into French and German wines. On alternate days they played French and German music.
When the tape deck wafted French accordion tunes down the aisle, shoppers bought a total of 40 French wines and only eight German wines. On days when the pounding beat of a German oompah band greeted shoppers, they bought only 12 French wines but 22 bottles of German wine.
Lawrence Solum tells us no.
Here is an early part of his insightful, multi-tiered post:
On the one hand, the RIAA simply cannot bring enough lawsuits to create a real deterrent effect. First, the number of suits is so small that the actual risk of becoming a defendant times the cost of settlement equals a miniscule amount. Second, the perception among users of P2P programs is that one can avoid any risk of suit by keeping the number of files shared on any one service below a threshold (usually thought to be 1000 files). On the other hand, there is no evidence that the RIAA is changing copynorms.
When the RIAA sends the message, “copying is theft,” they are fighting the norms. No one believes that copying is the moral equivalent of theft, because everyone thinks that private, noncommercial copying is just fine. Even the RIAA seems to have thought that when they agreed to the provisions of the Audio Home Recording Act that permit noncommercial analog copying. And the fact that copynorms diverge from norms about theft is rooted in the underlying economic reality–consumption of intellectual property is nonrivalrous, whereas consumption of tangible property is rivalrous.
So here is an alternative message that the RIAA could try:
Share with your friends, not with strangers!
In other words, the RIAA could try to get the public to see that P2P programs are the moral equivalent of giving away hundreds of videotapes or compilation tapes. Those activities are not socially acceptable. They may not be socially unacceptable either. Mass giveaways are rarely a social problem, because the cost is high enough to deter the behavior without either legal or social sanction. That is what the P2P technology changed. P2P enables the low cost mass gift.
It is worth reading Solum’s whole post, I might add he is one of the smartest bloggers out there.
Click here to hear an Internet radio show about the role of market capitalism in supporting the evolution of the musical. The site offers some remarks on capitalism and the arts more generally. Thanks to Carl Close for the pointer.
No, I am not one of those people who thinks you can fund an entire music industry through the sale of T-shirts. But file-sharing appears to have been a boon for some indepedent labels, which otherwise have a hard time getting their music to customers. Here is a money quote:
Today he [Mr. Egan] says – seemingly counterintuitively – his label simply would not exist without file-sharing services like Napster and its successors KaZaA and Morpheus.
Even as the major labels of the music industry pursue file traders for copyright infringement through lawsuits and the court of public opinion, Vagrant and many other independent label owners cheer them on. File sharing, these owners say, helps their small companies compete against conglomerates with deeper pockets for advertising and greater access to radio programmers.
“Our music, by and large, when kids listen to it, they share it with their friends,” Mr. Egan said. “Then they go buy the record; they take ownership of it.”
The New York Times offers the full account (registration required).
Why not use web technology to charge people very small bits for downloading songs, or reading blogs for that matter? An earlier note of mine discussed mental transactions costs — having to ponder the small charge each time — as a potential problem. An excellent post by Daniel Davies provides further, and better, ammunition against the micropayments idea. His key point: at some point micropayments have to clear through real financial institutions and the real shuffling of paper. Right now we don’t have the technology to do this more cheaply than credit card companies do, and they don’t find very small transactions to be worth their while.
Addendum: Here is a good response in defense of the practicality of micropayments.
It is a common economic puzzle why the prices for various events, such as Super Bowls and rock concerts, do not always clear the market. Why sell tickets cheaply, thereby allowing scalpers to buy them up and later resell them at higher prices, reaping the surplus for themselves?
Canadian Ticketmaster wondered the same, and now they are doing something about it. For many concerts they will auction off some tickets at market-clearing prices. Most groups, however, will auction off only a few of the best tickets, rather than all tickets.
One concert promoter had reservations about the scheme: “From a fan’s point of view, I don’t think this would be fair,” he said. “Obviously, everyone should have equal access to tickets, especially if you’re a fan that lines up overnight. It should be fair and equitable.” Comments of this kind show that either he or I, or perhaps both of us, do not understand this market very well.
Thanks for Eric Crampton for pointing the link out to me. And speaking of musical concerts, it is sad to report that Johnny Cash has died.