A few weeks ago we blogged about the future of the music industry and the shift away from music sales as the main revenue source given the inevitable changes to the old business model caused by the internet. While we consider this to be a signal that the music industry is accepting the new market dynamics and support the idea that some artists may benefit from giving music away for free, one of our readers, Nemo, responded with an insightful point of view. Nemo said that while big bands can easily rely on touring income, indie bands face many challenges in getting fairly compensated given their lack of bargaining power. Additionally, relying on merchandise sales can backfire as fans may consider that “selling out” as seen with MSI per Nemo’s example.
With that in mind I wanted to take a deeper look into the artist compensation debate and came across some interesting articles and perspectives from the likes of Bono, Electronic Frontier Foundation, Krist Novoselic, DJ Shadow and Glenn Peoples of Billboard.biz.
The first main debate is over the level of technical tracking that should be utilized to ensure proper compensation for an artist’s work. Bono is of the opinion that a high level of almost invasive tracking should be used to curb piracy through increased technical enforcement through ISP monitoring. The Electronic Frontier Foundation respectfully disagrees given that increased enforcement on a moral level hurts the poorer nations through the limitations it puts on distributing content with the fewest number of barriers. Their main issue is that Bono’s argument goes against what he normally stands for in his open disagreement with the unfair impact of pharma drug patents on poorer nations.
The second debate focuses more on how market forces should determine the price of music. Novoselic’s point of view here is that free content, while good for promoting an artist, will eventually resemble well “free content”. That is, content limited in quality by the fewer number of artists producing content and decreased motivation to take risks for the big payoff that in the past was more of a reality. DJ Shadow agrees and brings up the point that many of the most famous and at some point considered risky artists in our history generated that content in return for substantial compensation. Today, big labels are hesitant to support risky artists because the payoff is lower. Economically speaking, it makes sense that labels would rather opt to support the safer “embarrassing pop tripe” as the payoff is more predictable.
The solution proposed is one in which music is priced based on what the market forces will allow. That requires a change to the purchase model that prices songs based on their demand and what the market will allow. That is of course one solution, other solutions include ones that we’ve discussed here on the Giglog such as finding alternative revenue sources like premium album sales, merchandise sales and of course live performances. For some other income stream ideas for artists check out this great article by Hypebot titled A List of Income Streams for Musicians. This debate of how musicians will be compensated for their hard work will continue to pan out with potential governing body regulations and a music industry business model that will continue to evolve over time.
Either way we will continue to monitor the debate and post additional commentary as we come across it.
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Tags: Billboard.biz, Bono, DJ Shadow, Electronic Frontier Foundation, free music, future of the music industry, Glenn Peoples, income for musicians, Krist Novoselic
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