Stealing Music-Bob Lefsetz

[sventvkg]

What do you think of these apples? I agree with him.

 

The following is reprinted by permission © Bob Lefsetz

 

Once upon a time, you had to go to the gig to hear the music. You had to go to

Fred's cave, or the agora, or the synagogue or the concert hall. Then came the

ability to record and reproduce. Suddenly, you could take the music with you. Play

it at will, assuming you had a turntable and electricity nearby. Hear it on the

radio... Many people could hear music on the radio, it increased demand.

 

An entire industry was built around recording. And exhibition via the airwaves.

And the live business was affected thereby. Instead of the tour being the big

daddy, the recording generated ticket sales. The record company was king. And the

record company wants to remain king.

 

Most people don't want to give up what they already have. Hell, the Republicans

have done a good job of making progress by saying that you should pay fewer taxes.

Is this ultimately good for you in the long run? I don't want to get into economic

theory here, I just want you to contemplate...is it better for society, the greater

good, if there's a pile of money that can be spent for the benefit of all?

 

The major labels want their money. All they had and more, forever and ever. Is

this good for the public?

 

No.

 

What's best for society is if more people have more music. If everyone has access

to music at a fair, low price. If everyone can own all the Beatle albums and the

Stones', along with the right to sample everything new. This is what the Net

affords.

 

 

Think of it this way. Twenty years ago, only rich people and traveling salesmen had

mobile phones. The devices cost a grand and calls were a buck a minute.

Furthermore, there was essentially no portability beyond the car. Now, kids have

cell phones and you can literally talk as much as you want for $100 a month. Hell,

most people can talk for free every night and every weekend for a lot lower buy-in.

Furthermore, you can now get your e-mail on your phone and surf the Web. What is

this doing to the landline business? Decimating it.

 

Now some of the landline providers are in the cell phone business, they've hedged

their bets. Some of the major labels are trying to survive in the twenty first

century. But that doesn't mean the cell phone revolution shouldn't have happened to

maintain the landline paradigm. The future happened. There were some losses along

the way. Not all the players in the new world are the same as those in the old.

But one thing's for sure, society at large, the public, has benefit greatly by the

introduction and the commoditization of cell phones.

 

Although you can buy digital tracks at the iTunes Store, in truth, it's not much

different from the old paradigm. Albums of twelve tracks used to cost $12. Now you

can buy a track for a buck. Bottom line, users can buy only what they want, but

labels are making a hell of a lot less. But iTunes generates no experimentation.

The iTunes model actually delivers LESS experimentation. At least when you

purchased the album you had a chance of discovering stuff you liked on it other than

the hit. But now you don't buy the album, and you're not exposed to much.

 

Think about this world. Terrestrial radio has 22 minutes of commercials per hour.

Is heavily formatted. Everyone complains that they can't get on. If the only way

to spread the word was radio and the iTunes Store, we'd be screwed. But because of

the easy availability of tracks online, which can be acquired P2P, because of the

easy ability to rip CDs and e-mail songs, we're in an era of burgeoning discovery.

Albeit of a vast number of tracks/acts. It's now easier to discover and spread the

word on music that is not controlled by the major label, by the record company/radio

symbiotic game. What money flows...is not always to the usual suspects.

 

But, you say... If the labels had been smart, they would have copy-protected the CD

and there could be no transfer, like the movie business did with the DVD.

 

I ask you... Would that be good for music? How many times do you watch the same

DVD? Does a DVD go on the road? Is a DVD a closed enterprise, with a career? I

just wrote that I listened to Walt Wilkins' "Wrapped" ninety times...are you about

to watch "Pirates Of The Caribbean" ninety times? And then be desirous of going to

the theatre to see it again? And again? Like seeing your favorite act live? No.

 

The more music that's distributed at a low cost, the better it is for acts in

general. Is it as good for major labels, who no longer have a lock on distribution?

No. A new act can go it alone and get paid, the usual toll taker has been...

Let's just say you don't have to take the old road at all. And the major labels,

like Mafia families, don't like this.

 

Not that the majors should be ripped off. It's just that they shouldn't get a free

pass, with the ongoing longevity of the old paradigm. They must figure out how to

play in this new world. Chances are, new players will eclipse them, like Microsoft

did with IBM, but it's a level playing field. If IBM had been smart, it could have

purchased MS DOS. The major labels can compete with the newbies...if they can get

their heads out of the sand and adapt to the new world, which so far, they have not

been eager to do.

 

Music should not be free. People should pay for acquisition. But how they acquire

music and how much they should pay...that's up for grabs.

 

Music acquisition should be free and easy. You should be able to get a lot for a

little. As of now, there's no legal solution that fits these criteria.

 

As stated above, iTunes is not the answer.

 

Nor is Rhapsody. It may be cheap, but it's not easy. The interface is complicated

and the hand-held players suck. Furthermore, if you don't keep paying, you lose

everything. A bad system? No. But it's been proven most people don't want it.

And the consumer is king.

 

People want to own. Maybe not forever, but now. That's a necessity, it's immutable.

 

People don't want to pay much. Somewhere between a couple of bucks and ten a month.

That's it.

 

People want free transferability. They want no hassles utilizing what they've

already paid for and they want to be able to turn others on to what they like.

 

This system presently exists. It's called P2P. Although ease of use could be debated.

 

But the original P2P, Napster... That was very easy to use. But the labels killed

it. "Blender" says it's the biggest record company mistake of all time

(http://www.blender.com/articles/default.aspx?key=18696). Even Hilary Rosen says

Napster should have been licensed.

 

So all that's happened in the last nine years is the major labels' business has been

crippled, and all those in the food chain under them have been hurt. Performers,

writers, managers...even employees.

 

Let me restate... Going back to the past is a mistake. It can't be done.

 

So where are we going in the future?

 

One solution... As my friend Jim Griffin always says, "monetize the anarchy".

Issue licenses to those who trade P2P. License at the university level. Collect

revenue instead of suing!

 

Should every broadband customer pay a fee, otherwise described as a tax? I'd say

that's okay. But if most don't agree, sell the aforementioned license. If you

don't get one and trade, then you'll be sued.

 

Do I have a problem with Universal's Nokia deal?

 

Not conceptually. I'm all for trying new ideas. But not with the goal of

protecting the usual suspects' monopoly, not with the goal of limiting consumer

usage.

 

You're right. He who owns property has a right to deal with that property as he

sees fit. The only problem is, the public has moved on, to deny the free trade of

music in today's marketplace is akin to continuing to fight the Vietnam war, or the

Iraq conflict. It's history, you've got to move on to the new reality, facts have

changed.

 

But essentially none of this change has come from the major labels. Michael Eisner

ignorantly derided Apple's Rip/Mix/Burn campaign, not knowing that ripping your own

CDs was legal. This ignorance is derided by the common folk, who just don't

understand how a generation of fat cats can be so out of it.

 

Finally, you must know, there's no change without theft/law-breaking..

 

MySpace rips off the music, then the labels get into bed with the service.

 

Hell, the labels sued to kill the Rio, the predecessor of your beloved iPod.

 

If you stop stealing, if everybody stops stealing, we're going to have a pretty

awful world. Where people buy less music at the iTunes Store and it's hard to hear

new stuff.

 

I have a $167 cable bill. I barely watch TV. Tack on ten bucks a month for music.

I'll pay without blinking. I've said this for almost a decade. But my plea has

fallen on deaf ears.

 

Only by continuing to download P2P, by everyone acquiring more music, filling up

their iPods, will the labels be forced to capitulate. To license new distribution

schemes that benefit all. I urge you to protest. Just like we did in the sixties

against the Vietnam War. What some tried to do regarding the Iraq invasion, but

were shouted down by those with a different, ultimately controlling agenda.

 

More music for more people. Everybody benefits. Even the major labels. The easier

the distribution, the healthier the industry.

 

Distribute the pot of money a la ASCAP/BMI. Majors will make plenty, they've got

great catalogs. Will they control the future?

 

We'll see.

[sventvkg]

Continued:

 

If you're arguing against theft, if you're arguing for higher prices, you're showing

your ignorance, you're shilling for the man. Please open your eyes to the overall

game. The distribution lines must be redrawn, for the benefit of artists and

society. Don't let the usual suspects tell you otherwise. They're just afraid of

the future. Which will benefit them too, if they're willing to hunker down and

compete, just like everybody else

[Rabid]

... I have a $167 cable bill. I barely watch TV. Tack on ten bucks a month for music. I'll pay without blinking. I've said this for almost a decade. But my plea has fallen on deaf ears. ....

 

I for one, would turn a deaf ear to someone that pays that much for cable and barely watches TV. Maybe he can pay my 10 bucks too.

[pasteface]

Technogoly Marches On!!!! Me I listen to my old records and tapes and don't pay too much mind to it. Its all the Music thats whats important I say!

[Dean Roddey]

 

Music acquisition should be free and easy. You should be able to get a lot for a little. As of now, there's no legal solution that fits these criteria.

 

 

He says this as though it's fact and obvious. It's not at all. I say that whatever the company he works for makes should all be free and easy to get. It still costs money to make music, and a lot of that money is completely thrown away because people never really decide they like it. There's just no comparison to a business like music, movies, and books to other more commodity type products. It will always be expensive because you can never guess what's going to be accepted and what isn't, so it's always very possible, if not likely, that most of what you spend the money to create will never make a penny back.

 

And of course he ignores the massive issues that havng some sort of global tax in return for allowing everyone to get music for free would entail. Who is going to decide how it's distributed when it's done so via completely untrackable channels?

[GVDub]

I've been an eMusic subscriber since they first started in 2000. $19.95/month for a wide variety of music, much of it new and from bands that are lesser known. I've found some great stuff that way (although it was better when it was unlimited access for the $20 and it was easier to decide to grab some music just because you thought the band name sounded interesting or you just wanted to dabble in listening to a new genre). Now that it's 90 tracks a month for the money, it's still a good deal (though not quite as good) and there's never been a month where I didn't find more than enough interesting stuff. Just to name a few, I found bands like Tipsy, The Moog Cookbook, and Screaming Headless Torsos through eMusic.

[Super 8]

Did anyone catch the email exchange Lefsetz had with Kid Rock? Quite fun!

[Geoff Grace]

What do you think of these apples? I agree with him. The following is reprinted by permission (c) Bob Lefsetz Most people don't want to give up what they already have. Hell, the Republicans have done a good job of making progress by saying that you should pay fewer taxes. (snip) Music acquisition should be free and easy. You should be able to get a lot for a little. As of now, there's no legal solution that fits these criteria.

 

Which is Bob -- a republican or a communist?

 

Sure, when you can "get a lot for a little" of housing, insurance, food, cars, and gasoline, then come talk to me about getting "a lot for a little" of music!

 

Best,

 

Geoff

[MrKnobs]

 

But one thing's for sure, society at large, the public, has benefit greatly by the introduction and the commoditization of cell phones..

 

 

There's so much wrong with this post that I'm not sure to start, but I'll start with the above.

 

True, the people have spoken, that much is clear. The cell phone is king. But the benefit to society is far less clear cut.

 

Like most societal changes, we've swapped one paradigm for another, which always gives both costs and benefits. In the case of the cell phone, all else has been slaughtered at the altar of convenience. The one place you really need a cell phone (car broken down or a health problem on the road) you can be pretty sure that if you're not near a metropolitan area or on the Interstate, your cell phone won't have service. You can also be pretty sure there won't be a public phone within walking distance; more are being removed every day due to lack of quarters in them. To be blunt, you're just {censored} out of luck if you need to use a phone in a remote or even rural area.

 

Clearly, cell phones are less reliable that landlines. Everyone has experienced frequent dropped calls, no service, etc. Ever witness the dance of a cell phone user trying to find the "sweet spot" in a building or parking garage? Of course you have. And landlines, unlike, say, voice over IP or cable phone continue to work when the power is out because there are stations everywhere with huge batteries.

 

Are cell phones cheaper? Seems like it at first glance but that's also in question. Most people I know with cell phones spend around $100/month not counting the cost of the phone, which must be exchanged from time to time as the phones die, the service changes, etc. All you had to do with landlines to keep it cheap was to keep the duration of long distance calls down to minimum.

 

And yeah, I know, "pay as you go" phones. I have one. Guess what, you have to keep putting money in them constantly or else you lose your unused balance. What a racket!

 

So that's what we've given up as a society, and it's a lot. Now what have we gained?

 

We've gained the familiar phenomenon of useless calls and texting. You know, the "I'm in the grocery store getting the coffee right now" or the teenage favorite, texting something like "I luv u 2 omg 111!!!" every few minutes. We've gained the delightful experience of people's cells going off in the theater during the movie, in church, people actually talking on their cell and ignoring the cashier in a check out line, we've gained the ubiquitous phenomenon of cars weaving in traffic, driving erratically, the driver's ear solidly glued to a cell phone (proven a worse hazard than a couple of drinks), etc. etc.

 

So, clearly, Mr. Bob Lefsetz's judgement is already in question having written that line. I hope that society isn't counting on him to judge what's useful.

 

Now back on topic:

 

I can't write anything better on piracy than THIS (which was a bit off topic and killed the other sticky thread).

 

For those of you who can't be bothered to read that excellent article, or THIS ONE by Derek Sivers of CDBaby, let me just briefly summarize that piracy is here and it's not going away. I agree with Mr. Lefsetz that there's no going back to the past.

 

But Mr. Lefsetz seems to believe that the problem can be fixed; I don't think it can. I think we're seeing nothing less than the reversal of the last paradigm shift in the music business, which occurred with the advent of recording.

 

Recording, as you may or may not agree, was the un-democratization of music. It replaced the musicans in every town making a modest living with a few superstars who now make an obscene living, since now musicians don't need to be present to have music at an event. The epitome of this came with ASCAP and BMI, who essentially take all the money assessed to radio and club play, pay lesser known musicians nothing, and give most of the pile to Britney Spears, Michael Jackson, Garth Brooks, George Strait, etc.

 

Now guess what? Who is more likely to be ripped off in a significant way by pirating? You, or Britney?

 

This new paradigm is nothing less than progressive taxation of the big fish. For those of us who aren't Britney (sorry, I know there are other and newer pop stars, I just like typing Britney), this is actually kind of a good thing, or at least a neutral thing. Our problem isn't piracy, but, as Mr. Sivers et al say, obscurity.

 

We should have seen this coming, really.

 

When I was growing up, there were three radio stations, period. Well, OK, there was also an obscure station playing drippy old fashioned country music, and a Spanish language station. But the three mainstream stations played the same dozen bands' latest hits pretty much non-stop. In those days, it was "Do you like the Beatles or Elvis?"

 

Now, if you ask young people what their favorite bands are it's likely you'll get dozens of different answers, and, at least some of the bands named you'll never have heard of and a few of those won't be signed to any label at all.

 

It's a new world, and it's a good one.

 

Unless you're Britney.

 

Terry D.

[Geoff Grace]

There's a lot more than Britney involved. There's all of us who worked for people like Britney, or for the studios they recorded in, or for the record stores that sold their music, or for the record labels, or for their lawyers, or for the major recording studios, or the songwriters, or ASCAP or BMI, or rack jobbers, or equipment rental companies, and so on, and so on, etc., etc.

 

It was a BIG economy, and now a lot of it is scattered to the wind...

 

Best,

 

Geoff

[fetishfrog]

 

I can't write anything better on piracy than THIS (which was a bit off topic and killed the other sticky thread).

 

 

Like all articles of similar ilk, it fails to provide any solution to the ultimate question, 'how does an artist get paid so he/she can eat?' I mean it's great that people want to 'share music' (to use the euphamism of the day), but, since musicians have to eat, and now have an even smaller chance of getting paid for their work than before, it's not going to be long before they decide that eating is better than playing music.

 

Therefore I have to say that's one of the worst things I've ever read on piracy.

 

 

1) Copying, as I

[slight-return]

 

There's a lot more than Britney involved.

 

 

How Dare you sir!!!

 

There is only Britney and one day she will realize she truly loves me. I think I'll send her a dead cat in lingerie to let her know I will accept her when she's ready

[fetishfrog]

How Dare you sir!!! There is only Britney and one day she will realize she truly loves me. I think I'll send her a dead cat in lingerie to let her know I will accept her when she's ready

 

That's the funniest thing I've read in weeks.

[sventvkg]

Lotta anti-Lefsetz on here...Very interesting. Younger guys coming up I think understand where he's coming from more. The old Paradigm is over and all our old jobs and income streams are over and people are going down screaming...

[Geoff Grace]

The industry has taken a serious hit, but it's far from over.

 

As for younger people -- they may have a perspective that older people lack, but the reverse is also true.

 

Best,

 

Geoff

[Dean Roddey]

The whole comparison to cell phones is silly anyway. The cell phone is basically dongle. You can't get the service without it, and you can't get the service without paying for it. The scheme used by people giving away cell phones so as to make money on the servie you access through it is meaningless to musicians because there's no longer any dongle for them.

 

And all one has to do is ask why aren't people stealing the services provided by cell phone companies? Because they cannot. It's not possible for them to do it in any reasonably easy way, so they don't.

 

Most folks out there making money has basically gone one of two ways. Either you get people to pay you to put their ads in the stuff you give away, or you get people to pay you for the stuff. If you can't basically fit into one of those two categories, you are probably going to have problems. You can't compare any other industry, where they can enforce one of those two paradigms, with the music and movie industries where they cannot.

 

Is there one single other industry out there that has ever had this sort of situation? Well, I guess every industry had it before copyright and patent and other laws were created. And anyone who has studied the situation at all knows why they were created, because you can get people to create and innovate at hugely greater rates if you allow them to prosper when they create something a lot of people like. Russia and China pretty much proved conclusively that the other way doesn't work. They ran that experiment.

 

So I think that people either come to their senses and stop stealing (not likely), they get forced to stop steal (not likely), or the music world goes ad based and start building in add placement into the songs. I can't see any other way out of it, other than just getting out of it altogether.

 

The people who think that others are going to work their butts off so that everyone else can get free music or movies are spitting in the face of human nature. They are going to be hoist upon their retard (pun intended), and destroy the whole thing. And of course they'll continue to rationalize it as ripping off the big, evil RIAA even when they are stealing food directly out of the mouths of artists who are trying to sell their own stuff.

 

The outlook that young people are missing is that they've never had to work for a living. They still believe that food appears on the table by magic.

[Anderton]

Lefsetz makes it clear that people should pay for music:

 

"If everyone has access to music at a fair, low price."

 

"The more music that's distributed at a low cost, the better it is for acts in

general."

 

"Music should not be free. People should pay for acquisition."

 

I've been reading his stuff for years, and what I think he believes (and yes, I'm oversimplifying) is that if songs were a quarter apiece on iTunes instead of a dollar, they'd sell more than five times as much and actually make more money. He believes that a lower price will increase volume dramatically. I have no idea if he's right or not, but it probably would be a good idea to find something between "stealing" and "a buck a song."

[modeerf]

very interesting stuff guys.

[Geoff Grace]

 

I've been reading his stuff for years, and what I think he believes (and yes, I'm oversimplifying) is that if songs were a quarter apiece on iTunes instead of a dollar, they'd sell more than five times as much and actually make more money. He believes that a lower price will increase volume dramatically. I have no idea if he's right or not, but it probably would be a good idea to find something between "stealing" and "a buck a song."

 

 

The thing is a buck is worth so little these days, and its value is falling so rapidly, that a buck per song is practically stealing.

 

I used to spend almost that amount in the sixties on a 45. That's like spending about $7 now; and yet unlike then, now a dollar is considered too much!

 

I get Lefsetz's contention that more than five times 25 cents is worth more than one times a dollar, but his theory that sales would increase enough to compensate for the per unit drop in profit is just speculation.

 

If you look at the software world for an example, there are plenty of companies that make cheaper products than Microsoft, but none of them rake in Microsoft level profits.

 

If you decide to go cheaper and cheaper, where does it end? The end of that road is free.

 

Best,

 

Geoff

[Beck]

 

...are you about to watch "Pirates Of The Caribbean" ninety times?

 

 

Actually yes. I have two young sons. :poke:

[rasputin1963]

Anyone remember The "Rio"?

[slight-return]

as in the diamond MM products?

 

yup, I was an audible subscriber pretty much from the get-go

 

 

 

"Hey look - this iis a revolutionary device called a 'iPod'"

"What?!? I can't hear you, my rio is playing"

 

I really liked the 500s design -- the form factor, UI, the AA battery

[rasputin1963]

 

Actually yes. I have two young sons.

 

 

My mom's a child psychologist... she says that young children derive immense comfort from intense repetition: seeing the same movie over and over, reading the same book at bedtime over and over and over...etc.

[sventvkg]

 

The thing is a buck is worth so little these days, and its value is falling so rapidly, that a buck per song is practically stealing. I used to spend almost that amount in the sixties on a 45. That's like spending about $7 now; and yet unlike then, now a dollar is considered too much! I get Lefsetz's contention that more than five times 25 cents is worth more than one times a dollar, but his theory that sales would increase enough to compensate for the per unit drop in profit is just speculation. If you look at the software world for an example, there are plenty of companies that make cheaper products than Microsoft, but none of them rake in Microsoft level profits. If you decide to go cheaper and cheaper, where does it end? The end of that road is free. Best, Geoff

 

 

Look, here's the deal. Lefsetz is all about cutting the majors out and with that in mind, $5 a CD is a good deal..Even $3 if it's downloadable and there are no middle men...The old Guard is cut out...This is his contention..Where he is going...The artist would still Make more then he would if he were on a major label.

[Dean Roddey]

Well, as has been pointed out over and over again, there are no non-major label artists that have reached the point where they can really put out their stuff on their own without a big marketing and promotion budget and get people to come to them. The people who are doing that got to that point by way of the promotion machine of the labels. That's what labels do for their acts. They aren't just leaches. They have the means to get you known. Try that on your own. It's not easy.