Building a new music industry?

[skyrefuge]

In 1998 they likely lacked the right financial incentives. I suspect they couldn't foresee how impactful the shift would be.

No, I was following this really closely at the time (reading about developments weekly in my engineering trade journal, in fact!) and the record companies knew what was coming, and were scared shitless, even back then.

Many music fans like to portray the record companies as bumbling fools that were taken by surprise with the new economy of the Internet. I disagree with that interpretation. 40 years ago, when the major labels were still run by guys who knew how to make records and not much else, yeah, that could have been true. But in this age, the major labels are subsidiaries of major multinational corporations, filled with plenty of brilliant business minds. The problem was not that they weren't clever enough to think of a solution, it was that there is no solution.

The labels knew that the mainstreaming of mp3s would be dangerous to them, and that's why SDMI was created. The electronics manufacturers didn't give a shit (and still don't); they would have happily churned out mp3 players with no protection, but they didn't want to get sued by the record industry, or get screwed when the record industry came up with their own incompatible protection schemes, so they figured it was in their best interest to play along and coax the record companies out on the Internet. "Don't worry, we'll make it safe for you!" The record industry remained skeptical, and only condoned the Internet market years later when they really had no other option.

So again, they only players who would have any motivation to reinstate DRM are the record companies, and since they gave up on it only *after* they had plenty of data about the effects of the Internet on their bottom line, they clearly ain't going back. Presumably, they assume they can make *more* money without DRM, otherwise they wouldn't have dropped it.

You very well may be right. However, at some point, they either stand up and fight to take their sales back or decide all music will be free.

I think you underestimate both the morality of consumers and the difficulty of stealing music. As I showed in my other post, it's pretty clear that there are still plenty of young people paying for music. And as the industry shifts from a consumer-focused approach to an ISP/distributor-focused approach to combat piracy, stealing music becomes more of a pain. Yeah, every time one torrent tracker gets shut down, another appears, or you can hack some workaround, but most people really don't have the skills or interest to keep up, and they'll give up and just pay the $1 for the song they want.

And "free" music wouldn't necessarily be the end of money in the industry. Other industries, such as television and radio, have provided "free" content for decades and done just fine. That's already what is happening via ad-supported streaming services, or YouTube, Vevo, and the like. The numbers probably aren't what the record companies would like, but they aren't 0.

Neil, I'd like to better understand what you think the #1 culprit is (if not piracy).

I'm smart enough to know that I don't have nearly enough information to give a strong answer to this question. There are simply too many factors at play and too much unknown data to be able to nail anything down. Conversely, I seriously doubt anyone who claims they know what "THE problem" is with the music industry.

Certainly the increase in piracy enabled by electronic distribution is a factor. But there are too many other potential factors that need to be considered as the explanation for decreasing revenue:

- Unbundling of the album
- Removal of the gatekeepers and flooding of the market with competition
- Macroeconomic conditions: a decrease in disposable income means a decrease in music industry revenue
- Entertainment competition: the rise of video games and 1000 TV channels means that entertainment dollars are being divided over more options, and maybe even to kids today music just isn't as entertaining as it used to be when comparing to Halo. Kids don't play Kick the Can anymore either.
- The end of collection-conversion to Compact Disc (probably a minor factor)
- The inability of the industry to create a Michael Jackson-level star (I generally reject these sorts of "music isn't as good as it used to be" arguments, but who knows?)

All those factors (and others I can't remember right now) need to be examined and eliminated before I'll be convinced that piracy is the #1 factor in declining revenue.

And even if it is, it's far from clear that the invention and implementation of the World's First Unbreakable DRM system would do anything to increase revenue; it could easily have the opposite effect.

Neil

 

[skyrefuge]

Additionally, although much of what is said by you and skyrefuge is right on the money in my opinion, I'm not a fan with the idea that "nobody is making money" in the music industry.

Oh yeah, totally. That's why I always bring up how old the piracy "crisis" is. If the theater was truly burning down as the industry wanted us to believe starting more than a decade ago, it would have been ashes, gone, paved over, and forgotten years ago. Businesses and industries don't survive for a decade while constantly losing money.

Neil

 

[Pelata]

Now, I know (or am assuming) that you don't literally mean that there's no money in the music industry, and that you're just being general. And that's true to an extent. In the grand scheme of things--of the hundreds of thousands of bands these days, most make no money.

That's exactly what I mean.

There is always money to be made if you're willing to do what it takes to to so AND are supremely lucky.

The numbers probably aren't what the record companies would like, but they aren't 0.

Best statement in the whole thread. Record companies want to go back to the bygone days of having money to burn and it's just not going to happen...doesn't mean they're starving.

 

[Dustin]

It's obvious that as the numbers of artists putting out music and touring increases, each gets a smaller piece of the pie to fight over. Less obvious is the fact that this causes the pie to shrink as well. It does this by two methods, one straightforward, and one more speculative. First, artist competition, like in any industry, drives prices down. This lowers the price consumers need to pay for music, and since music purchases are generally not limited by the monetary factor (they're limited by time available to listen to music, interest in new music, etc.), cheaper prices don't mean that people will by more music, they'll simply pay less for the same amount. Second, music is a social phenomenon, and popularity is hugely important in determining what people buy. In a world of overwhelming choice with fewer obvious blockbuster artists to signal to consumers that they should spend their money on music, people won't, and to some extent will opt out entirely. Just as many people only buy lottery tickets when the jackpot gets above $300 million, many people only buy music from mega-stars, and as mega-stars fall off in number and scale, industry revenue shrinks with them.

Hammer? Meet the head of the nail. Thank you!

What you are saying here, is pretty much a MUCH better, more lengthy and detailed version of what the original topic was mentioning. I also tried to expanded on this, but I think my rant didn’t come across quite as eloquent as yours and everyone just jumped over it. I spent too much time slamming and lamenting about the “independant artist support systems” that are in place, which in my opinion, is a cancer as to why there is so much music out there.

So, forgive me for not jumping on the bandwagon of "illegal downloading is currentlly killing the music industry"...it just doens't make sense. Illegal downloading started a new era of how music is obtained. But what's currently killing/hurting the music industry is too much music (a whole other topic).

No need to ask for forgiveness, because the actual point of the thread/article was precicly stating that fact – there is too much music/too many artist. We can beat the piracy topic to death, only because it is still a real problem, it’s only a difference of opinion of how MUCH of a problem it is, but it is a problem none the less.

The bloated numbers the industry got used to cannot be the measuring stick of the current music business. It has already been proven that albums can be recorded/mixed/mastered/pressed for a small fraction of what it used to cost. If an album costs a fraction of its former cost to make, why does it still carry a price tag of $15-$20?

Thank you for pointing this out. This has been a question in my mind for the last few years as well. Seriously, WHY? Well, I’m sure there are a lot of excuses from the industries side, because, well… that’s what I would consider them. But truthfully, If the industry is so concerned with physical format sale losses, why not lower the price of said failing format by taking the gain from digital sales (which cost practically nothing compared to CD’s to distribute) and roll them over to the loss of the physical sales so that format is more competitive and enticing for consumers to buy?

Hell, now days as an example, (but not in all cases though) if you by a blue ray for $25-$30, it comes with a DVD copy AND a digital one as well! Or… you can pay half that for a just a Blue Ray, just the DVD or go online and buy the Digital. Needless to say, you can rip a CD effortlessly and have a digital copy rather quickly, so if that is the case, wouldn’t it be more lucritave to sell a CD for $9.99, the same price as buying the whole album in digital format, so the consumer not only has a physical pressed copy as “a back up” but can also create a digital copy at the leisure, all for the same price?

This wacky theory of mine is really not mine, and this is why - The FYE by my house started selling all standard CD’s for $9.99 as an experiment. Granted, limited edition CD’s, CD’s that came with DVD’s, double CD’s and the like were being sold around $15-$20, but it still caught my eye. I strolled over and located the store manager and had a very enlightening conversation with her and a distributor who just happen to be there. When I asked them why they were doing this experiment, they stated to me the same reason as I have above. She said they were only doing this regionally to see if price was indeed a factor in declining sales of CD’s. I went back a few months later and asked her how this experiment was going, and she said that in the pop/rock selection, they saw only a 4% increase in sales. But get this – in the Country and Rap departments/genres, they had a 13% and 11% increase respectively… and the metal section? 32% increase! WTF!?

Due to the increase in sales, she mentioned they were now able to increase their selection of artist/titles in their dedicated inventory, and have now stabilized their sales in CD’s, for the time being anyway. Granted, she said it hasn’t shot up again, but they’ve maintained a 1-3% fluctuation since, and their regional management could pull the plug at anytime.

And their inventory? Just ask Met-Al… I took him over there while he was in town recording, and he was squeeing like a little girl, and couldn’t believe this FYE stocked half the titles it did. He lives in a major city, and in his opinion, all the FYE’s near him don’t even come close.

Food for thought I guess?

The industry needs to re-tool itself..restructure...re-crunch the numbers. There is no need, at all, for a band like Metallica to spend $1 million making an album. If the industry as a whole would scale down, focus on making a living instead of focusing on printing money to burn and line birdcages with...in other words, be real, then it could re-stabilize and sustain itself...IMO.

Yes, yes, yes, YES! Agree 110%

 

[Pelata]

A couple of my local FYE's did that too...but then labels and distros started complaining and some refused to participate (which is why Iron Maiden were not part of the $9.99 deal)...the labels screamed about profit margin and these same FYE's had to stop the across the board $9.99...now it appears to be in a "floating" scenario from genre to genre as to what is currently @ $9.99...in my area, anyway.

 

[General Zod]

The problem was not that they weren't clever enough to think of a solution, it was that there is no solution.

There appeared to be no solution for many things, for which a solution was later discovered. The fact that this consortium did not unearth a solution in 1998, doesn't mean a workable solution can't be found in 2011.

So again, they only players who would have any motivation to reinstate DRM are the record companies, and since they gave up on it only *after* they had plenty of data about the effects of the Internet on their bottom line, they clearly ain't going back.

I would agree that it's the record companies who would want such a solution. And you're probably right, they'll likely never revisit the DRM option. However, in 1998, did they envision that people would be listening to MP3s on their cell phones, which contain the necessary networking technology to communicate with a server and verify an MP3's authenticity?

I think you underestimate both the morality of consumers and the difficulty of stealing music.

Understood. However, I believe you're doing the reverse (as I hope to demonstrate later).

As I showed in my other post, it's pretty clear that there are still plenty of young people paying for music.

I don't believe everyone is downloading illegally. However, without knowing how many people are, it's impossible to put your numbers into a proper context.

I'm smart enough to know that I don't have nearly enough information to give a strong answer to this question. There are simply too many factors at play and too much unknown data to be able to nail anything down. Conversely, I seriously doubt anyone who claims they know what "THE problem" is with the music industry.

I understand I'm not an expert on the subject. At the same time, I don't feel like I need a PHD in podiatry to see that someone is missing a foot.

For chuckles and grins, I took a quick peek at the Billboard Top 40 to see what the current, top selling releases are. I decided to use Rihanna's latest release, Loud, as a test case. This disc was released less than two months ago. I did a quick search for it on one of the torrent sites. To date, her new disc has been downloaded 370,000 from that site alone.* That's one torrent site. It doesn't include all the other torrent sites that are out there. Nor does it include newsgroups, blogs, IRC, FTPs, P2P, or files which were purchased legally and then shared amongst friends. According to SoundScan, the disc has sold 750,000 copies. Now, I get that SoundScan only tracks physical media. However, one torrent site alone has matched nearly 50% of her SoundScan numbers.

So while I appreciate that the industry currently suffers from a number of issues, I feel like I would need a compelling reason to believe that the most obvious issue, isn't the biggest.

*Note: I'm getting the number 370,000 from a column on the site called "Times Completed". I'm assuming this means the times the torrent download completed. I checked the FAQ and Googled it, but couldn't confirm. Does anyone know for certain? It does seem quite high.

 

[dcowboys311]

*Note: I'm getting the number 370,000 from a column on the site called "Times Completed". I'm assuming this means the times the torrent download completed. I checked the FAQ and Googled it, but couldn't confirm. Does anyone know for certain? It does seem quite high.

Your assumption is correct.

To compare, I just checked the same album on a private torrent site I go to. Keep in mind this site is somewhat exclusive and mainly targets the audience who wants high quality downloads, good tags, etc...aka not the main Rihanna audience. Throughout all formats (FLAC, various mp3 bitrates, etc) it's been downloaded 1430 times to date. However, this is a site that's much more likely to be interested in bands like Arcade Fire and Radiohead than Rihanna.

 

[halcyonwayband@aol.com]

Piracy is huge. We did the same "test" that Zod did on our first album, and it was something like 85,000 times. ******85,000!!!!!!******* If we had $1 for every illegally downloaded copy we saw on that test, HW would be able to sustain itself without constant out of pocket on the part of the members, indefinitely. Heck, if it was $.25 per copy we could have paid for a lot of expenses that we incurred.

HW paid for all of the production for both our albums completely out of pocket, and we will never see that money back. And as anyone that's heard Building The Towers (especially) can attest, we skimped on NOTHING. It was seriously expensive. As an artist, the results were 100000% worth it but from a business standpoint it was idiotic.

The tours we have done have all been money losing due to the buy-ins required and the lack of tour support. The label can't pay for the tour support because there's not enough volume of sales to pay for the pressings, the publicity, and anything else related, much less tour support on top of it...or the artist actually getting paid for anything once these expenses are recouped, because that would never happen.

Tour support is definitely a thing of the past UNLESS you're a young band living in an apartment together eating ramen noodles that the label can totally rape with recoupable expenses.....the band gets worked to death on the road, the tour support is recoupable against royalties and anything earned on the road, and when the band is worn down to a nub and implodes, they're done....on to the next sucker/band. A lot of the bands that get slagged for being on every tour package would probably fall into that category, watch and see. They make a subsistence-level living off of things while they're on the road, they're looking for a job when they get home because they probably didn't make enough on the road to pay the bills while they were gone, the albums are probably never recouping expenses so they're not getting paid for that, and the cycle continues until the band implodes from the financial & personal pressure.

Think about it.....the average royalty per CD sold for an artist on a label deal is about $1.

For those of you that have no idea what it costs to make a record (I'm going to ignore the fact that many bands have ProTools now - HW is one of them, I have a pretty decent and functional studio - but I'm leaving it out of this because it cost about $20,000 over time to build it), check this out:

Decent studio time: $40/hour - probably 2 weeks minimum to record an album properly - so call it $5000, which is pretty low really.
Mixdown with a good producer/mix engineer (say a James Murphy, Pete Wichers, Lasse Lammert, Jason Suecof, etc): $500-1000 per song - you want to call a Colin Richardson/Andy Sneap/etc, try double that or more.
Mastering: $500 for a cheapie all the way up to $2000 for someone with a good resume
Art: depends on who you get of course but it could be anywhere between $500-5000 depending on the artist.

So say a 12 song album runs you $20,000 total to make, just to round it off.

Then say the label spends $10,000 on a marketing campaign.

If the label spent all that on an artist's album, it would take 30,000 sales of the CD for the artist to break even and start getting royalties. Now, who sells 30,000 copies of their album? Not many bands. You guys would be really stunned to see some of the sales numbers for bands that you would think could sell that number of CDs that don't even come close. Some of the deals these bands that have been around for a while and sold a lot of copies of their catalog are getting deals with NO advances, no money to record, nothing except the promise of physical distribution and advertising. it's because of the piracy.

you could also look at it from the standpoint that the label sells the product at wholesale to the retailers, and they actually generate more revenue per CD than they actually credit the artist with on the royalty statements. Wholesale is about $5/unit, ballpark. So subtract about $1.50 from that for the manufacturing, and $1 for the royalty to the artist, and they make about $2.50 per copy. Then subtract out the overhead, salaries, etc.....oh, and the chargebacks from the distributor for copies that got sent back, the holdbacks, etc. Not much money left. So again, you're in 5 figures for sales for breakeven for the label.

So yes, piracy is a big freaking deal. Even if it lowered the sales by 10-20% gross, it would sure as hell help to have those sales back, because after all the expenses that would probably represent the PROFIT at the bottom of the label's income statement, which would encourage them to invest in existing and new artists a little more. To put this in a different context....if you're a retailer and you average about a 10% net profit margin after all expenses, then 10-20% of your inventory starts getting stolen out of your store, you're in the red all of a sudden. How sustainable is that for a business? That store would close as soon as they ran out of cash plugging the leak caused by the shoplifting, because it would only last so long.

To the people stating that piracy has always been here, but it's just easier now, and therefore it's not the real problem... Sure, that's 110% true, that it's always been there. But if you go back to 1985 where piracy was a dubbed cassette and you did tape trading, think about it. Those tapes were $1 each. And if you mailed it to your buddy, you had to pay for postage. And get up and walk to the mailbox. There was a cost to the pirate for this stuff. And the quality sucked so a lot of those people probably bought it in the end. And inconvenience...and time dubbing the tape, which wasn't that fast. So sure, it could be and was done....but the difference now is that I can YouSendIt my entire 500gb iTunes library with a couple of clicks, then go away for a day and play my Xbox while it uploads. I just pirated 3000 albums, with no cost to me, with the click of a button. So if you don't think the convenient/fast/easy nature of piracy today doesn't contribute to the amount of piracy going on, then that's just illogical.

For the record, I do completely agree that the internet and the advent of the home studio has made it incredibly easy for millions of crappy bands to put stuff out cheaply and DIY, then spam us all to death with it. And I'm sure in that static that some sales are lost. But quality music will get more attention over time and have staying power. The question is.....will anyone pay for it?

having said all that, buy my record: www.halcyonway.com/webshop - hahahaha

 

[adaher]

How are bands that pre-date downloading doing today compared to back then? I think that would be an important data point. Is anyone able to get soundscan data for some bands that got their start in the 90s, like Stratovarius, Edguy, Gamma Ray, Shadow Gallery, etc., and compare their sales now vs. their sales then?

I hypothesize that while the internet brings downsides, for our genre there's a net benefit because it enables bands to get exposure they'd never be able to get otherwise.

It's all well and good to imagine a perfect world where it's easy to market but hard to steal music, but that world didn't even exist in the 80s. If you put a single out on the radio, we taped it off the radio. For every single sold, there were probably 3 kids who had it on tape. Of course, it wasn't as bad back then, but then the marketing potential wasn't as good, either. It was pretty much non-existent for indie labels. I remember when the only way someone would know about a Magna Carta or Shrapnel records release was if they cracked open a Guitar magazine.

The more marketing potential you have, the more piracy you have, and there's no way to separate the two.

I think the question for a band to ask is not, "How much would we have sold if we could market on the internet but there was no piracy?", but "How much would we have sold if there wasn't an internet?" I worked with a couple of bands in the early to mid-90s, who you never heard of, not because they weren't killer, but because there was no plausible way to get the word out except locally. No one reviewed your album(assuming you could get one made), unlike today, where even DIY releases are adoringly reviewed by numerous dedicated metal review sites, which are instrumental in helping metal fans decide what to buy.

Finally, what are the chances that we would ever, and I mean EVER, see Blind Guardian or Stratovarius, or Sonata Arctica in the Western Hemisphere without the internet?

 

[dcowboys311]

Piracy is huge. We did the same "test" that Zod did on our first album, and it was something like 85,000 times. ******85,000!!!!!!******* If we had $1 for every illegally downloaded copy we saw on that test, HW would be able to sustain itself without constant out of pocket on the part of the members, indefinitely. Heck, if it was $.25 per copy we could have paid for a lot of expenses that we incurred.

HW paid for all of the production for both our albums completely out of pocket, and we will never see that money back. And as anyone that's heard Building The Towers (especially) can attest, we skimped on NOTHING. It was seriously expensive. As an artist, the results were 100000% worth it but from a business standpoint it was idiotic.

The tours we have done have all been money losing due to the buy-ins required and the lack of tour support. The label can't pay for the tour support because there's not enough volume of sales to pay for the pressings, the publicity, and anything else related, much less tour support on top of it...or the artist actually getting paid for anything once these expenses are recouped, because that would never happen.

Tour support is definitely a thing of the past UNLESS you're a young band living in an apartment together eating ramen noodles that the label can totally rape with recoupable expenses.....the band gets worked to death on the road, the tour support is recoupable against royalties and anything earned on the road, and when the band is worn down to a nub and implodes, they're done....on to the next sucker/band. A lot of the bands that get slagged for being on every tour package would probably fall into that category, watch and see. They make a subsistence-level living off of things while they're on the road, they're looking for a job when they get home because they probably didn't make enough on the road to pay the bills while they were gone, the albums are probably never recouping expenses so they're not getting paid for that, and the cycle continues until the band implodes from the financial & personal pressure.

Think about it.....the average royalty per CD sold for an artist on a label deal is about $1.

For those of you that have no idea what it costs to make a record (I'm going to ignore the fact that many bands have ProTools now - HW is one of them, I have a pretty decent and functional studio - but I'm leaving it out of this because it cost about $20,000 over time to build it), check this out:

Decent studio time: $40/hour - probably 2 weeks minimum to record an album properly - so call it $5000, which is pretty low really.
Mixdown with a good producer/mix engineer (say a James Murphy, Pete Wichers, Lasse Lammert, Jason Suecof, etc): $500-1000 per song - you want to call a Colin Richardson/Andy Sneap/etc, try double that or more.
Mastering: $500 for a cheapie all the way up to $2000 for someone with a good resume
Art: depends on who you get of course but it could be anywhere between $500-5000 depending on the artist.

So say a 12 song album runs you $20,000 total to make, just to round it off.

Then say the label spends $10,000 on a marketing campaign.

If the label spent all that on an artist's album, it would take 30,000 sales of the CD for the artist to break even and start getting royalties. Now, who sells 30,000 copies of their album? Not many bands. You guys would be really stunned to see some of the sales numbers for bands that you would think could sell that number of CDs that don't even come close. Some of the deals these bands that have been around for a while and sold a lot of copies of their catalog are getting deals with NO advances, no money to record, nothing except the promise of physical distribution and advertising. it's because of the piracy.

you could also look at it from the standpoint that the label sells the product at wholesale to the retailers, and they actually generate more revenue per CD than they actually credit the artist with on the royalty statements. Wholesale is about $5/unit, ballpark. So subtract about $1.50 from that for the manufacturing, and $1 for the royalty to the artist, and they make about $2.50 per copy. Then subtract out the overhead, salaries, etc.....oh, and the chargebacks from the distributor for copies that got sent back, the holdbacks, etc. Not much money left. So again, you're in 5 figures for sales for breakeven for the label.

So yes, piracy is a big freaking deal. Even if it lowered the sales by 10-20% gross, it would sure as hell help to have those sales back, because after all the expenses that would probably represent the PROFIT at the bottom of the label's income statement, which would encourage them to invest in existing and new artists a little more. To put this in a different context....if you're a retailer and you average about a 10% net profit margin after all expenses, then 10-20% of your inventory starts getting stolen out of your store, you're in the red all of a sudden. How sustainable is that for a business? That store would close as soon as they ran out of cash plugging the leak caused by the shoplifting, because it would only last so long.

To the people stating that piracy has always been here, but it's just easier now, and therefore it's not the real problem... Sure, that's 110% true, that it's always been there. But if you go back to 1985 where piracy was a dubbed cassette and you did tape trading, think about it. Those tapes were $1 each. And if you mailed it to your buddy, you had to pay for postage. And get up and walk to the mailbox. There was a cost to the pirate for this stuff. And the quality sucked so a lot of those people probably bought it in the end. And inconvenience...and time dubbing the tape, which wasn't that fast. So sure, it could be and was done....but the difference now is that I can YouSendIt my entire 500gb iTunes library with a couple of clicks, then go away for a day and play my Xbox while it uploads. I just pirated 3000 albums, with no cost to me, with the click of a button. So if you don't think the convenient/fast/easy nature of piracy today doesn't contribute to the amount of piracy going on, then that's just illogical.

For the record, I do completely agree that the internet and the advent of the home studio has made it incredibly easy for millions of crappy bands to put stuff out cheaply and DIY, then spam us all to death with it. And I'm sure in that static that some sales are lost. But quality music will get more attention over time and have staying power. The question is.....will anyone pay for it?

having said all that, buy my record: www.halcyonway.com/webshop - hahahaha

Ok not trying to be an asshole, but I have a really, really hard time believing your album was downloaded 85,000 times. You have 433 listeners on last.fm. This includes the first AND second albums. Can you take a screenshot? Maybe I'm completely wrong but that just seems ridiculous. I mean if 85,000 people are listening to just HW, why does ProgPower take more than 2 minutes to sell out?

Also I don't really see the correlation between home studios and crappy music...are you saying all music needs to have thousands and thousands of dollars spent on it to be listenable? That makes it sound like music is more valuable because of the production and not because of the songwriting. There are plenty of bands who use cheap recording options to release their tunes who are good...just like there are plenty who spend tens of thousands on their recording budgets who suck.

And really who cares if you download 3000 albums? Are you going to listen to 3000 albums? Would you have otherwise bought those 3000 albums had piracy not been an option? Most people can't even find that many to download.

 

[AeonicSlumber]

I also don't understand how a band is a "sucker" for taking in tour support. Yeah, of course they're not gonna make that money back initially. I don't think it's a mystery that being successful in the music industry is HAAARD. Did you seriously think it was going to be smooth sailing? Touring is a major financial loss any way you slice it, but if you don't sell the album the label will drop you and touring is the best way to sell the album. On top of that, touring long enough and hard enough means that your band will make more money in the long run. It's a 10-15 year investment/commitment though.

And yeah, almost no small 1-2 album band spends 20,000 on an album. That's another major financial mistake. Of course the costs won't be recouped if you spend that much. Your band has to be worth something to begin with in order to make people want to buy your product. That's not a knock to your band, I've never heard you guys but it's nothing like that, but it's just the reality of the economics here.

 

[adaher]

I can believe that Halcyon Way's debut album was downloaded 85,000 times. What I would not be able to accept is that the album would have a chance to sell 85,000 copies. What happened is that 85,000 people decided to give the album a listen. The vast majority deleted it after one listen. A small percentage kept it(theft), and a small percentage went out and bought the album.

Availability is also a factor. I don't download albums I can buy at my local music shop. Ever. I know when the release date is, and I'm there in the morning to pick it up. If I can order it easily, I'll do that(although I'll often download it early while I'm waiting). but if the album is out of print, or not otherwise easy to purchase, heck with it, I'm downloading the sucker.

 

[dcowboys311]

I can believe that Halcyon Way's debut album was downloaded 85,000 times. What I would not be able to accept is that the album would have a chance to sell 85,000 copies. What happened is that 85,000 people decided to give the album a listen. The vast majority deleted it after one listen. A small percentage kept it(theft), and a small percentage went out and bought the album.

Availability is also a factor. I don't download albums I can buy at my local music shop. Ever. I know when the release date is, and I'm there in the morning to pick it up. If I can order it easily, I'll do that(although I'll often download it early while I'm waiting). but if the album is out of print, or not otherwise easy to purchase, heck with it, I'm downloading the sucker.

I just checked the new Halcyon Way on the torrent site I go to.

Times downloaded: 5

so unless that site is strictly anti-HW, I don't believe the figure for a second.

 

[adaher]

You might be right. It's hard to track illegal downloads, because there are such a variety of ways to get them. Torrents, rapidshare, Russian mp3 sites(which a lot of reasonable people wouldn't even know are piracy sites, since they are paying).

But I'd always take any number you get with a grain of salt. I've downloaded albums I own already, either because I can't conveniently find them(I'm disorganized), or because the rip is higher quality than what I can get(since I've never taken the time to learn how to do high quality rips for my Ipod.).

 

[halcyonwayband@aol.com]

Ok not trying to be an asshole, but I have a really, really hard time believing your album was downloaded 85,000 times. You have 433 listeners on last.fm. This includes the first AND second albums. Can you take a screenshot? Maybe I'm completely wrong but that just seems ridiculous. I mean if 85,000 people are listening to just HW, why does ProgPower take more than 2 minutes to sell out?

Also I don't really see the correlation between home studios and crappy music...are you saying all music needs to have thousands and thousands of dollars spent on it to be listenable? That makes it sound like music is more valuable because of the production and not because of the songwriting. There are plenty of bands who use cheap recording options to release their tunes who are good...just like there are plenty who spend tens of thousands on their recording budgets who suck.

And really who cares if you download 3000 albums? Are you going to listen to 3000 albums? Would you have otherwise bought those 3000 albums had piracy not been an option? Most people can't even find that many to download.

I'm not sure where the numbers came from - Lance did the research on that because we were talking about how aggravating the whole issue was, and brainstorming on ideas on how to work around it. It was about a year ago, wish I could tell ya.

On home studios? Not at all, totally not. What I meant was that I didn't want to go there for purposes of a recording budget because it was a whole other topic. But having said that, you have to compete with the Andy Sneap & Colin Richardson produced CDs of the world these days. So if you want to get your music presented in the best way possible then you have to spend money on the process, *most* of the time. I have a pretty solid ProTools rig, high end preamps, good guitar gear, blah blah in my studio. However, that's only a part of it. To be able to self-produce an album and do it well, you have to have the necessary skills as a producer/engineer, which most musicians don't. So for myself, I can track most instruments just fine and get solid results as an engineer, but I can't mix myself out of a paper bag. So as an artist, you have to step back and go "ok, I just spent the last X months' of sweat and effort recording this thing....do I go DIY and cheap and mix it myself when I know I can't do it right, or do I pony up and get a superior mix engineer to do it for $$$?" Some bands can do it all self-contained and get the high-end results....but most can't. And it depends on the genre too, to a large degree. If you're a doom band, that music is typically characterized by a certain production value, and you could realistically record it live in the studio and be done with an album in a week if the musicians were good. But in this particular genre, the general requirement for production value keeps you from being able to do that. And another consideration as an artist is that you only get to make an album once....so for us it was very important to do it right and not have regrets because we tried to save a couple bucks.

For the record, to save money, we did about 75% of the basic tracks in my studio. We tracked drums at a good studio intown, and diverted the money we saved by using my home studio to things such as gear, tracking real strings & choir, guest musicians, and hiring the best producer we could to come to GA and make the album.

On the 3000 albums, that's not my point bro, all I was getting at is that piracy is much more widespread now because of the ease of it. And yeah.....that's my music collection going back to when I was about 15. In the time it took an old-school tape trader to dub one cassette, you can now do what I described.

 

[halcyonwayband@aol.com]

I also don't understand how a band is a "sucker" for taking in tour support. Yeah, of course they're not gonna make that money back initially. I don't think it's a mystery that being successful in the music industry is HAAARD. Did you seriously think it was going to be smooth sailing? Touring is a major financial loss any way you slice it, but if you don't sell the album the label will drop you and touring is the best way to sell the album. On top of that, touring long enough and hard enough means that your band will make more money in the long run. It's a 10-15 year investment/commitment though.

And yeah, almost no small 1-2 album band spends 20,000 on an album. That's another major financial mistake. Of course the costs won't be recouped if you spend that much. Your band has to be worth something to begin with in order to make people want to buy your product. That's not a knock to your band, I've never heard you guys but it's nothing like that, but it's just the reality of the economics here.

I maybe should have said that differently, that's not really what I meant. I'm not saying a band is a sucker for taking the tour support, we'd do it in a heartbeat and take the chance. What I mean is that the labels will run a band in the ground fast these days, try to make a quick profit on them, and then let them implode because they know it's not sustainable. The bands usually don't have the chance to put in the 10-15 year commitment you mentioned, because they're going to get used up in 2-3. A very few make it past that. Does that make sense?

On it being easy, no - of course not - it's very hard. We have had to claw and scratch for everything we have accomplished. We do what we do in HW because we love it, the money and etc are secondary concerns. But it would be really nice if it was self-sustaining, but piracy has made that impossible (or improbable, I should say).

As far as the recording budget you mentioned.....I can't speak to that. I know what we've spent on our two records, and it goes back to your first point. It's a 10-15 year commitment. If you get a reputation for putting out crappy sounding albums, who's going to buy the next one you put out? But $20,000 can go by real fast when putting out an album.

 

[halcyonwayband@aol.com]

I can believe that Halcyon Way's debut album was downloaded 85,000 times. What I would not be able to accept is that the album would have a chance to sell 85,000 copies. What happened is that 85,000 people decided to give the album a listen. The vast majority deleted it after one listen. A small percentage kept it(theft), and a small percentage went out and bought the album.

Availability is also a factor. I don't download albums I can buy at my local music shop. Ever. I know when the release date is, and I'm there in the morning to pick it up. If I can order it easily, I'll do that(although I'll often download it early while I'm waiting). but if the album is out of print, or not otherwise easy to purchase, heck with it, I'm downloading the sucker.

Yeah, I find it hard to believe it too. it's a huge number. One thing though that your 2nd point reminded me of, is this. When "Manifesto" came out, it was slated to be released in Europe via SPV's distribution network. Right after the US release, SPV went under and it totally nuked our release outside of the US. Because the marketing campaign was tied to it being out worldwide, it totally got buried for about 6 months. By the time NM had a new distro channel open, the album was basically old news for press and whatnot, and so it was hobbled from day one. It wasn't really available outside the US for nearly a year, so that whole thing might have contributed to the DL issues we had on it. I can't believe that 85,000 people would DL and the sales would be as relatively low as they were; even if it was utter crap (which it wasn't) 1 out of 5 metal fans who downloaded it would have probably liked it. So out of those 20%....that's 16,000 people that probably liked it enough to either steal it or to buy it, theoretically. I can tell you it wasn't a 50/50 split, haha! So it gets into a commentary on human nature......when given the choice of easy & wrong (stealing) and hard & right (paying for what you consume), what will the average person do?

Man, the industry is bleak - I don't know the answers, I just play guitar - but at the end of the day, as an artist, you have to focus on one thing: you play music because you love it, and if you DIDN'T have the opportunity to make albums and gripe about it on forums, haha, then you'd be playing in the basement. For me, it's not about the money and it never has been. But it would be awful nice to be able to break even at some point. Piracy is a big reason that is so hard, both on a macro and a micro level....that extra 10-20% of sales would go a long way towards that goal. And what I mean by that last sentence is that if that 10-20% of sales (or whatever the number is that the industry has lost due to piracy) were back, the industry as a whole would be healthier, and a band would have a better chance at success because the labels could afford to be more supportive.

But....not going to happen unless the industry figures out how to get around the downloading issue and find other ways to monetize the product. I know we're looking at things such as ring tones, we just signed contracts to put all of BTT on Rock Band and that will be live around March 1, and things of that nature. I think the 360 deals will be more prevalent too. So we'll continue to see it move in that sort of direction in my opinion.

 

[adaher]

.when given the choice of easy & wrong (stealing) and hard & right (paying for what you consume), what will the average person do?


A lot depends on the love of the music and the people making it. I think the metal fans are more likely to want the whole package than fans in other genres. Some fans will even try to get the most deluxe edition, or even buy the same album but with a different cover.

Back to the availability thing, I have to think that a HUGE number of people just can't buy even the wide releases. Can you even buy metal in places like China or Saudi Arabia? I remember when the Scorpions broke the Iron Curtain they were shocked to find out that everyone knew their songs despite the fact they hadn't sold any albums in the Soviet Union. And this was before downloading! I'd bet a lot of downloading that doesn't end in a sale comes from places where the album just cannot be acquired.

 

[skyrefuge]

However, in 1998, did they envision that people would be listening to MP3s on their cell phones, which contain the necessary networking technology to communicate with a server and verify an MP3's authenticity?

Yes. Well, maybe not in 1998, but the first mp3-playing cell phones came out in 2001, and the companies involved in SDMI surely knew that such devices were in development during the active period of SDMI (which lasted until 2001 before fading away).

Additionally, once DRM'd audio actually entered the market in the middle of the decade, it *did* use network-based technology (not for the portable device part of it, but it's really not necessary there). The subsequent shutdown of their DRM servers by various retailers (Yahoo, Walmart) a few years ago (thus revoking the ability of people to play music they had paid for) was a pretty obvious demonstration of what a terrible idea network-based DRM was in the first place.

So your idea is something technologists would have been well aware of a decade ago, and it never became a forgotten concept.

I don't believe everyone is downloading illegally. However, without knowing how many people are, it's impossible to put your numbers into a proper context.

"How many are downloading illegally" is a useless figure. What we need to know is "how many illegal downloads would be converted to purchases if illegal downloading was not possible?" But I agree, without good numbers on every side of the equation, it's hard to make strong conclusions.

For chuckles and grins, I took a quick peek at the Billboard Top 40 to see what the current, top selling releases are. I decided to use Rihanna's latest release, Loud, as a test case. This disc was released less than two months ago. I did a quick search for it on one of the torrent sites. To date, her new disc has been downloaded 370,000 from that site alone.*

I was going to accept that figure, but then Halcyon Way's obvious wrongness about their album being downloaded 85,000 times makes me assume your figure can also by reduced by a factor of 10,000 or more. Sorry, guilt by association.

But again, the real question is how many of those 370,000 people would have actually bought the album? Probably about 0 of 1430 people at dcowboys's site. Certainly more than 0 at whatever site you looked at, but how many more?

Your observation that just a single site using a single method of distribution accounted for 50% of her SoundScan number is instructive. Say there are are 19 other torrent sites with similar numbers, and the torrent method contributes 2/3rds of all illegal downloads. That would add up to over 11 million downloads; to make it one of the fastest-selling albums of all time, we only have to assume that 1/10th of the downloaders represent a lost sale.

I pulled the numbers about torrent sites out of my ass, so you can similarly plug in whatever numbers you like there. The point is that an argument that 370,000 represents a small fraction of illegal downloads is also an argument that only a small fraction of illegal downloads represent a lost sale. It's not hard to come up with download numbers in the billions, and record companies would happily have you believe "we're losing billions of album sales!" But the highest number of albums ever sold in the US in a year is something like 650 million, so that's an upper-bound when trying to calculate the downloads-to-lost-sale ratio.

Another number: a single Youtube/Vevo video from that Rihanna album has been viewed 82 million times, far far more than you could reasonably assume would buy the album. Another indicator that a huge number of people out there are happy to seek out Rihanna's music to listen to it for free, but aren't particularly inspired to lay out cash for it. In that light, a large number of torrent users can be seen as today's equivalent to radio listeners, building their own stations (and thus hurting radio revenue, but not so much CD sale revenue)

Now, I get that SoundScan only tracks physical media.

FYI, SoundScan tracks paid downloads too.

So while I appreciate that the industry currently suffers from a number of issues, I feel like I would need a compelling reason to believe that the most obvious issue, isn't the biggest.

Downloading is certainly a factor, and it may even be the biggest factor, but it's just hard to make a solid conclusion there from the data available.

As an example of all the other factors that have to be accounted for, if we play the clock backwards, the industry saw a similarly dramatic "decrease" in sales between 1994 and 1986, when RIAA shipments were cut in half over that period. What accounts for that "decrease"? Certainly illegal downloading played no role; it's not like downloading was rampant in 1986 and eliminating it resulted in a the 8-year boom. So it's clear that it's possible to explain dramatic changes in revenue like we've seen in the past decade without including downloading at all as a factor. If you can explain the '86-'94 boom, then there's a good chance that the opposite of the factors that contributed it are contributing to the '00-'10 decline.

Neil

 

[Pelata]

All I feel like adding at this point is that, aside from building the studio to record in, if an indie band is paying $20,000 to make an album on Pro-Tools with a good engineer then they're getting ripped off.