profiting from music recordings from now on

By Robbie on May 5, 2010

Two of the most interesting and comprehensive articles I've seen on the problem of making money from intellectual property in the digital age came out in the last couple weeks, Megan McArdle's "The Freeloaders" in the Atlantic and Ken Auletta's "Publish or Perish" in the New Yorker. Miss McArdle looks at present trends, of young people consuming illegal downloads for free, a concert industry driven by oldsters, and a decadelong decline in label revenues. She envisions the entertainment industry's present fragmenting and contracting ending in a youtube-y bazaar of cheapo, for-the-love-of-it projects, with in a few monetized mega-entertainments sprinkled in. Tomorrow will be like today, but more so.

Mr. Auletta's essay is on the woes of book publishers in the dawning age of of Kindle and Ipad, and of online sellers' competitive inroads against not only brick-and-mortar retailers but publishers (there are six big ones, and four big music labels). The parallels between the music and the book industries are clear and several, and the trend lines are such that the burden of proof is squarely with the optimists, if that's what you want to call people who think these businesses can continue into the future, maybe smaller but more or less maintaining their present structures. The two realities -- intellectual property rights, mushily delineated and hard to enforce; and public expectations, of music and books that are fast to get, easy to carry, and either cheap or free -- impose a logic that looks implacable. Against it the invisible hand may be helpless, or, if not helpless, incapable of improvising a response before the slumping businesses collapse altogether.

This instantly raises the question, is this something to mourn, or try to "correct"? Online retail has effe ctively removed a barrier between creators and buyers. Given that mad geniuses such as myself can now easily set up their own retail arrangements, are publishers and labels (P&L for short) in any way necessary?

I am tempted to say "yes" at once, for a few reasons, which I'll state then examine critically. P&L help creators carry out and maximize profit from their labors -- ideally, anyway, ahem ahem -- and, as one who consumes as well as creates arty stuff, I find the archetype of the good-shepherd editor or A&R rep appealing on philosophical and self-interested grounds both. There is a dashing glamour and even augustness that is easy to conjure from names like Maxwell Perkins, Bennett Cerf, Mo Ostin, and Ahmet Ertegun -- widescreen people like that this grubby world can always use more of.

Another reason is that, as a consumer, I am saved by a label or publisher brand on a product from combing through buckets of type and music clips; the brand is an endorsement and implies significant selectivity.  And a final, not-so-reasonable reason: I don't like when things change. I am always happier thinking that tomorrow will be exactly like today, even with all of today's imperfections and sorrows, than imagining some hypothetical improvement that will shake things up.

So much for my pathologies. Let me look at my experience, which is in music. Over 23 years of putting out records I've amassed, without really trying to, a certain amount of empirical data that sheds much doubt on the above so-called reasoning. First of all, there may be no particular point in continuing the discussion past the phrase, "given that creators can easily set up their own retail arrangements." If I can afford to record myself and can get it without much fuss to where people who might want to buy it can, why on earth would I want to pay an intermediary? What would it be doing? Some of my friends in bands would say, labels are useful for helping with the endless petty labors involved in releasing a record, and there are a few things individuals can't do that companies can. This is true enough. When I self-released, ten years back, Couples in Trouble, I bought into a Borders program that put my record into all of the chain's listening stations for 3 months. It cost about $4000 and looked like a good deal, a conservative risk. What I didn't think about, and discovered upon visiting random Borders stores in various towns, was that some stores, here and there, for whatever reason, would fail to display my CD. Or that they would display it, but just for a month. Or that the listening station headphones would be broken. I was reminded that at the major label for whom I had previously worked, tribes of low-paid, fast-talking lackeys would daily descend upon the poor managers of these stores to bribe, flatter, and harass, and that this made a very rational case for taking down a Robbie Fulks disc from display in favor of a Rob Zombie disc. As a lone operator, I had the leverage of my few thousand dollars -- not nearly enough.

But digital has largely cleaned this mess up. These days, chain retailers aren't much of a force in music; Amazon isn't hard to do business with; and digital distributors such as Tunecore have proved to distribute effectively and pay reliably. More importantly, every year since Couples in Trouble came out, the digital share of the pie has grown. People aren't listening to CDs that much anymore. Why use a label to reach digital consumers? I asked that of an indie company that was interested in owning and releasing my latest record, Happy. They told me that they would be able to use their clout to get prominent acreage on places such as the itunes homepage. I reflected that, although it was cheering to think that I could attract more buyers this way, I hadn't as a general rule earned any royalties through label-worked digital music in the past, so that the profit to me of an expanded fanbase would be largely symbolic. If the "itunes-homepage" argument is the best argument labels can muster for their continued usefulness, then to hell with them.

Royalties: here lies a crucial, much-noted distinction between the book and record businesses. Authors get (going by Mr. Auletta's figures) a royalty equal to 15% of the cover price of a book -- $3.90 on a $26 book -- and own their copyrights. Music artists, as Courtney Love noted in her excellent 2000 speech to the Digital Online conference, don't get or own any such. A typical deal historically extended by a label to an artist is a 10% royalty, which is paid only after the label's expenses have been recouped, most of them, amazingly enough, out of that 10% share. "Zero" is a simpler way to say this. So music makers haven't come to be invested in the traditional structure of their business to nearly the extent that writers have; they're more often antagonistic to it, and justifiably so. The fact that most music artists haven't profited from their recorded work has doubtless hastened the decline of the label-oriented structure -- we don't see that we have much of a stake in it.

The New Yorker quotes a former CEO of HarperCollins as saying: "An author needs a publisher for nurturing, editing, distributing, and marketing." This heavy quartet of gerunds got my attention. I thought of the A&R and other significant label operators and employees I've worked with through the years.

Nurturing. There is something to that. A&R people and personal managers excel at projecting gentle sympathy and calm assurance. Unless you thrive on spikiness and ill-will, or have an aversion to capitalists in disguise, there is not much bad to say about being in the midst of smooth-talking, encouraging professionals. You feel better and work harder. If you contract yourself to one of the four majors, you will find yourself on the phone or in an office with these caring souls, many of them vegans, for an hour or more every day. Before long you will start to see yourself as the center of a grand communal enterprise. Well, take away the community, and that feeling is hard to keep alive -- it would require a sort of madness, really. There are times when I honestly miss having all that hubbub hourly encircling me. There's nothing like the feeling that you are piloting a great craft that is moving, by the common labors of a hundred strong men, through rugged waters to some glittering destination.

But when you are working for a huge company specializing in sales of recordings of popular music, you may find the joy in shared enterprise to be offset by certain dark suspicions. To be as delicate as possible, let's extend the metaphor above. If you start seeing the ship's swab dressed in naval-officer attire and lurking about the bridge, you may start to wonder, not only whether the captain's work is being aided materially, but if in fact the decks are getting even a minimal going-over. Does this sound horribly Ivy League of me? Let me dare further into blunt anecdote. When I was with a major label, the "passion" of all its employees was a matter of great pride. "He's our main accountant," said my A&R man to me one fine day, by way of introducing me to a swarthy, dull-eyed youngster at the Los Angeles office, "but don't think of him that way -- he's actually very passionate and creative." The same applied to the radio promoters: "You'll love working with Gina, she's pure passion!" And I did love working with Gina, who looked like she had been squeezed into her jeans with an icing gun.

In fact, every single sales and promotion person I worked with was sociable and pleasant in the extreme. And young, and handsome, and in-the-know. Many wore the "artist" badge much more convincingly than I did, dressing in earrings and white T's and four-day-old beards, slouching, showing off an easygoing familiarity with dozens of obscure musical niches. (Not mine -- country -- but many.) Amid all the pleasantness, however, I started noticing that nothing exactly was getting sold. Certainly not my records, which the salespeople discreetly but firmly discouraged radio program directors from listening to. "Why aren't you helping sell my record?" I would ask. "Well, honestly, we are trying to sell Rob Zombie's record," they would reply. "After which, old sport, we will give your little bauble our full attention." But they weren't very good at selling Rob Zombie's record either, and the company collapsed shortly thereafter. The problem, it turned out, wasn't that they were conniving capitalists in disguise, but that they weren't capitalists at all. Nor were they disguised; they were just what they appeared to be, good-natured smooth-talking twentysomethings afire with enthusiasm for pop-music trends and jeans with dippy stitching.

So I think that the overall value of soft human virtues such as nurturing and compassion is quite limited in the rough-and-tumble world of business.

Editing. Good editors like Mr. Perkins and William Maxwell are a matter of legend, and you hear now and then of A&R dynamos who helped birth masterworks by helping singers through hard times or disabusing them of some weird notion, or putting their fingerprints on mixes. I've gotten a lot of solid improving advice from producers, engineers, musicians, and friends, but hardly any from label people. I mean, they've said some bright things, I'm sure, here and there. But these have been swamped in so many crude, irrelevant, or patently false remarks, you could get a random-comment-generator for the same results and, I'm guessing, at a much lower price.

Distributing. Not anymore.

Marketing. This is a wide, blurry category -- getting the product in front of the right people -- overlapping somewhat with "distributing." I'm no Alvin Toffler, but I think P&L might have a marketing role in the digital market. Someone, at any rate, needs to give meaningful shape to the flat, boundless ocean of compressed data. The selectivity exercised by the old businesses, and the orderly hierarchy their influence produced in the marketplace, benefitted consumers considerably. When three networks delivered all the televised news, we understood that we were perilously dependent on the minute-by-minute judgments of an elite, a small-group of east coast men churned out of the same handful of colleges and training institutions. But we also understood that that we didn't care to pore over wire reports from foreign lands to figure out what was more or less significant, didn't have to ask our friends and neighbors what news they were following to make sure we weren't missing something, we didn't have to stitch together six slanted takes on a given event to compose a roughly objective view. The danger of the too-narrow funnel was offset by a benefit in efficiency and time.

If normal people have an hour of the day they can devote to finding out who's rioting in Cyprus and why the president is meeting with the majority whip, they surely can't devote any more than a small fraction of that to finding out about the hottest new grindcore bands out of Nebraska. Back when we'd shop for records in stores, what was given prominent display not only benefitted the scurrilously self-aggrandizing corporations who paid for the space, but us buyers, whose eyes were turned by bright graphics, and whose lives were, every so often, improved by music that we might otherwise have missed. The record companies weren't, of course, the only ones sorting out the thousand bands and singers trying to attract us. There were magazines like Rolling Stone, which signaled new music it considered Momentous and Essential. Remember those pompous rhetorical tactics of yesterday's top-down pop culture?It was pretty silly; but much of what a few tastemakers proclaimed as momentous really became momentous. The official endorsements sanctified products that we might have dismissed, on our own untutored listening, as unexceptional. The dilemma of always having to decide for yourself was partly lifted from our shoulders. Books and records were unambiguous status markers, souvenirs of your passage through the common culture.

With dead-tree writing and polycarbonate-plastic vibrating on the outs, with the digital bazaar buzzing around us and ever-spreading, the need for filters, for direction and shape, is greater than ever. I have no idea what kind of company might provide the service -- maybe not a label or a magazine -- or whether it will emerge before the waning models are long-interred, but I feel certain that we'll need for-profit companies to offer sorting and impregnate with status, to point us toward bright needles in the digital haystack. Their judgments won't be unimpeachable, but their higher task will be to give us a little order and some shared meaning in our art, even an imperfect order, even a meaning imposed from without.

Consider the economic utility of a Maxwell Perkins. Because of one man's firm conviction and insight -- a man working for a big publisher, Scribner's -- Ernest Hemingway and F. Scott Fitzgerald were elevated from their peers and given a prominent spot on the bookseller's shelf, excluding thousands of other writers. The average reader now puts these two names, along with Mr. Faulkner's and a few others, in a mental spotlight, with a placard, "Great American Writers, Jazz Age to World War II." A pretty big gloss on the truth, but it spares us from having to tote around wobbly craniums full of names like J.P. Marquand, John Galsworthy, Glenway Westcott, Sigrid Undset, and E. Phillips Oppenheim, and thereby from constantly bumping into lamps and houseplants from the attendant neural noise. Elevating the life's work of a few artists to eminence and immortality is false to a spaceman's view of things, or a puppy's, but very useful to the everyday, socialized, non-specialist citizen in terms of clarity gained. So I'm an optimist, believing, not only the obvious, that music and literature are fundamental human needs, and that markets are endlessly creative, but that people will pay good money for clarity and simplification.

Postscript: I went over this again today to try and improve it in places, and noticed that I hadn't explicitly addressed the title issue as it concerns creators. A little oversight! The book industry, Ken Auletta's piece points out, with its small elite of big earners, spreads the wealth around and keeps afloat the majority of humble plodders we know as writers. Same with the music business. If we want to have a society with a lot of full-time writers squeaking by, as we now do, someone will have to act fast, it seems. The lot of the common writer looks to be headed from bad to worse. But, to repeat, musicians, who have never enjoyed a writerly royalty share, have no "worse" to head to. I never made much money from record sales, and still don't. I will have to keep playing private events, touring, selling shirts online, enjoying the occasional TV or movie use -- all the things I do to keep my kids in earrings. The difference in today's landscape is that, if I ever do hit an unexpected goldmine and capture the interest of 100,000 record buyers, I'll be able to enjoy the profits. I think music makers will do fine in a label-less world.