Sunday, January 10, 2010

It’s a long way from home / welcome to the Pleasuredome

There were two great scams in the 2000s (assuming the decade is’s technically not of course).

One, it almost goes without saying, was the drive to war scam pulled fairly successfully by the Bush administration in concert with a few compliant governments (the UK and Australia come to mind) whereupon clear and known fraudulent data was placed in front of not only the public as a whole, but whole layers of elected officials and lawmakers across the US and the UK. It was the WMD scam and arguments continue as to whether it cost the lives of 100,000 or a up to million Iraqis (as if the lower figure is somehow better) and the wholesale dispossession for millions more. From a US perspective, I guess it was hugely successful.

The second, whilst it existed on another, less deadly, level altogether, was no less successful, and involved the large media companies, many smaller media companies and assorted copyright administration bodies. This we will call the Piracy Scam.

Why am I revisiting this now? Well the piece briefly excerpted below pissed me off:

How to help prop up the ailing music industry? Tax Google, suggests a new report commissioned by the French government.

I’m close to speechless at the stupidity of this.

It will make no difference. None at all. Nothing will boost the revenues of the wholesale industries beyond a complete 180 on the part of the customer back to the buying habits they, in increasing numbers, left behind during this last decade. One has to remember that the folks making these rules, and the ones crying foul over the alleged lost revenues are either people in their mid-40s onwards, who if they buy music, were educated to buy it in album format, in the decades since the recording industry invented the format in the late 1940s, or they simply don’t buy music.

And they’ve been told that revenues are down (true) because people are simply stealing the music online (extremely arguable).

Are people taking music in large quantities online…yes, of course they are, there is no doubt of it. Is this causing the crash in revenues? I’d argue yes, in small part, but that’s all.

And that’s aside from the glaring and oft stated fact that a downloaded tune does not equal a lost sale, despite the rampantly loony figures the IFPI happily touts (and are gobbled up by the media).

The primary reason revenues are down is because the primary target for recorded music are people under 25. And they no longer buy albums. Mostly they don’t even know what they are. They buy MP3s..the new singles. They don’t want albums. They want tracks. And the evidence to support this is voluminous. Last year in the United States there were 1.16 billion (yep, billion) digital tracks sold. That is the equivalent of 1.16 billion singles purchased, because that’s what the MP3 is..a single..a 45, in the old language. Add to that just under 400 million albums (of which some 3.2 million were actually 14 album box sets by The Beatles, so add another 40m or so to that figure!) and you have a very, very large number of units purchased by customers in 2009…far higher, in fact, than at any time since Soundscan began recording accurate figures in 1991.

Throw into that mix two other factors, firstly that the digital figure removes the cost of manufacturing, distribution and warehousing, and secondly the huge drop in recording costs over the past decade as digital became the norm, and a rather different picture emerges.

On, and one more figure to toss into the mix: the decade long rise in performance income received by performing rights organisations as many different income streams, driven by technology, plus the massive advances in collection techniques and the sad story that both the media and the lawmakers happily trumpet without question, looks increasingly shaky. The Times did an analysis using a few, but not all, of these factors a month or two back which was interesting.

The truth is that in 2009 there was a massive jump in income from music worldwide:

Thanks to new collecting bodies, more music users buying licences, and a big rise in US revenues, global performance rights payments increased by 16% to $1.5bn (£940,000) in 2008, according to industry newsletter Music & Copyright.

Performance rights revenues come from the public playing of music across various locations and platforms, from radio stations and nightclubs to supermarkets and hair salons.

Such income has become more important in recent years as music sales have fallen. The UK is the largest territory in terms of performance rights distributions and total payments rose 11.5% to $220m (£138m) in 2008, according to Music & Copyright. It compiled its global figures through data from collecting societies worldwide, including PPL in the UK. The most played song was Mercy by Duffy.

The largest increase was in the US, with payments surging by 176% to $100m (£62.7m) as digital and internet radio services were licensed.

Mix all that together and toss in the now accepted monstrous myth that musicians are now unable to survive off their royalties (performance is up, and less than 1% of all acts likely survived from master copyright royalties, due to the inequities in the way the recording industry handles recoupment, despite what Bono and Lily Allen would have you believe) and have to struggle. They’ve always struggled.

So, yes, as we roll into three strikes legislation the world over, and labels moan poverty because the playing field and the rules have changed, a little sanity would perhaps be appropriate as we reflect on how well the Piracy Scam, has been sold, as I repeatedly hear people that should know better commenting on the Facebook generation that won’t, so they say, pay for music. That steals and destroys the livelihoods of those that make the music.

It’s bullshit.

And it didn’t even take a speech from Colin Powell.

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