Dead Kennedys Founder: “Internet Is a Plantation Share Cropper System”

Dead Kennedys Live

I don’t listen to music much at the gym. It’s my time to catch up on the news and podcasts. As an LA resident, I’m one of the fortunate few who don’t have to spend much time in my car as my office is 40 feet from my bed. While others are audibly lip synching grunting out curls. I’m laughing or shouting like a crazy person mid press. This morning it was the latter.

Listening to 21khz: The Art of Money in Music podcast (co-hosted by Jeff Price the founder of Audiam and Tunecore), something that today’s guest, East Bay Ray of the Dead Kennedys, said gave me pause. Well, actually a lot of what he said did.

There seems to be a generational divide in this wild new music business.  The elders, who built their careers in the pre-internet era, lament how their incomes have dropped because of Big Tech.  While the artists building their career IN the internet era, revel in the fact that they can do so without permission from gatekeepers.

I get it.  Believe me.  People are terrified of change.  When it’s taken you so long to figure out how to do something and you finally get a handle on it, and start coasting, it’s frustrating (infuriating) when circumstances change and the old way of doing business doesn’t work anymore.

The podcast spent a lot of time discussing how the tech companies (Apple, Spotify, Amazon, Pandora, Google/YouTube) are the new “distributors” (they used that term, whereas they probably meant “the new music stores,” considering you still need a distributor to get into these outlets just like you needed a distributor to get into record stores, but moving on).

“It’s monopolies now. How can you negotiate with that? You can’t go to YouTube and say I want these terms. They’ll say ‘fuck you.’ If you don’t do it our way we’ll just do it for free”

– East Bay Ray, Dead Kennedys

Ok, let’s unpack this.  True, an indie artist cannot go to YouTube and ask for more money (but most record stores didn’t negotiate their rates either).  And true, Google/YouTube hides behind the outdated DMCA Safe Harbor Act claiming that they can’t be held responsible for user generated content (UGC) (videos uploaded by fans with songs they don’t have rights to use).  But, it’s also true that the labels and publishers ignored “the internet” for a very long time and refused to acknowledge it could be a problem —until it was too late.

Yes, virtually every cover song on YouTube is illegal (no, the kid in Nebraska did not negotiate a synch license fee with the publisher to use the composition before uploading his bedroom cover to YouTube).  And all the fan-made music and lyric videos are also illegal.  But labels and publishers missed a major opportunity with this.

YouTube has been around 10 years.  When it first came out, the music industry could have seen it as an opportunity.  Instead, they deemed it a threat and did their best to shut it down.  Remember back when all the majors were ripping videos down or forcing YouTube to remove the music?  I once used a Mutemath song as the soundtrack for one of my tour vlogs.  I cited the song and band in the description and even linked people to buy the song on iTunes.  But, I got a claim from YouTube stating that the rights to the song were owned by WMG and they removed all the audio from my little 5 minute tour vlog.

So, the technology existed to find the song and rip it out, but the technology didn’t exist to preempt the posting with a note stating that the rights to the song were owned and that an ad would be placed on the video from the get go?

The Bruno Mars “When I Was Your Man” fan-made lyric video had 100 million views (unmonetized) before Atlantic made YouTube rip it down.  Which begs the question, why didn’t Atlantic get an official video up on launch day?

Well, finally, the labels realized that they were shooting themselves in the foot by stripping out all of this great promotion (and money) and instead worked out deals with YouTube to do just that — get an ad placed on the videos that they could earn on (with a link to iTunes).  But they were 5 years too late. The damage had been done.

Time and time again, the music industry decides to combat tech instead of work with tech.  It’s a losing battle!  And the music industry, as a whole, always loses the battle.  It’s not that tech is evil or hates the music industry.  It’s that tech is, by and large, run by millennials and the music industry is, by and large, run by baby boomers.  The two groups just don’t see eye to eye.  Neither are completely right or wrong.  Neither are dumb or evil.  They just have completely different beliefs of how the world should work.

Please don’t point to Taylor Swift as an example of a millennial who continually fights against tech alongside the ‘music industry.’  She built her career the old fashioned way.  Alongside the old players.

Talk to the thousands of middle class musicians who are working WITH technology to build a new music career independently and creatively.

“You consider yourselves lower, middle-class artists.  Is it possible to keep that level today for new artists starting out?” co-host Ted Gerstein asked.

“I don’t think so. Some will, but it’s a lot less,” replied Ray.

Ok, well, I’m sorry to say, but East Bay Ray is completely uninformed about how new artists are operating in this new landscape. And yes, middle class musicians are, in fact, thriving.

He continued, “It’s not that music is dying. It’s just that it’s going to be blander because you need an audience 11x bigger.”  Ray, buddy, you’re telling me there wasn’t bland music in the 80s and 90s?  Come on!

Yes, there’s a lot MORE music now than ever, but there is some incredibly phenomenal music being created — of all genres.  Don’t believe me?  Well, Bandcamp has paid out $171 million to indie artists.  Most of them DIY.  $4.3 million in the past 30 days.  You probably haven’t heard any of these artists (or, gasp, Bandcamp!) because they haven’t penetrated mainstream and aren’t discussed in all the doom-and-gloom articles and podcasts that consume so much of the industry dialog these days.

Or you probably haven’t heard of the artists making thousands a month directly from their fans by live streaming from home. Or the artists making thousands a month directly from their fans via Patreon and Bandcamp subscriptions.  Or the indie artists actually earning very good money from Spotify.  Or the artists making their entire recording and promotional budget for their album directly from their fans (in advance of even recording the first note) from PledgeMusic, Kickstarter and Indiegogo.

Or the artists, believe it or not, who completely built their entire careers on YouTube.  Or, the indie artists making six figures a year licensing their music to film, TV and commercials (without a major publisher or label).

+ This Musician Makes $10,000 a Month Live Streaming from Home.

I’m sick and tired of the doom and gloom!

It is the best time to be an independent artist in the history of the music industry.  You just need to get creative with your career and not spend all your time bitching about the ‘good ol days.’

We are in a renaissance period in the music industry.  And while all the oldsters and the ignorant press who solely use sources from the major label and publishing world lament about how tech is crushing their music industry, a quiet majority of creators are paving a new way to build a music career.

Here’s the problem. Jeff Price, who is one of the most informed people in the world on how music royalties work, just sat there silently when East Bay Ray incorrectly stated, “Ads in front of the  produce more money for Google than the people creating the music. From what I can tell, they take about 65% of the money and give 35% to the creators of the content.”  

Jeff was silent and the co-host Ted Gerstein just said “mhmm.”

No!  This is false.  Okay, East Bay Ray was misinformed.  I’m not going to hold that against him. But I am going to hold Jeff Price and Ted Gerstein responsible for not correcting him.  They know better!  YouTube is actually very transparent about their commission rate (not much else though).  YouTube pays 55% to the creators and keeps 45% from the ads on YouTube.

Do I think they should pay creators more?  Yes.  I think YouTube should pay at least 70% (like Apple and Spotify do).  Or 85% like Bandcamp does.  Do I think songwriters/publishers deserve an equal cut as the artists/labels? Yes!  But that’s a different discussion for a different article.

Allowing people to spout untruths as gospel (when you know the actual truth) is just as irresponsible as speaking the lie yourself. It’s like when Donald Trump is interviewed and 76% of what he says is an outright lie and those who know the truth just sit there and say “mhmm,” we get a stupider public.

Now, by no means am I equating East Bay Ray to Donald Trump.  Trump knowingly tells lies for self-serving reasons.  East Bay Ray was innocently misinformed.

But this is the problem.  Most of those doing the talking these days to major media outlets are musicians who built their careers in a different era.  They are household names, so they are interviewed because their name alone will get clicks.  And the uninformed press are looking for someone who has the answers.  And they believe these people must have them because they’re famous.  But they don’t have the answers.  And they don’t speak for all musicians.

Ray went on to compare the YouTube ad split with his Virgin Publishing split from back in the day of 70/30 (70% to him).  Okay, but most major label deals are weighted heavily the other way.  Industry standard was for a long time, 90% to the label, 10% to the artist.  Not to mention the myriad of ways labels were able to screw artists and songwriters out of just that money with “packaging charges”, “damaged goods” clauses, “controlled composition” clauses, slimy catalog deals, etc etc.

“People need to look at the internet as a plantation share cropper system. Yeah, you got your cotton really cheap, but is that how you want society to go forward?

– East Bay Ray, Dead Kennedys

It’s an interesting analogy, but doesn’t hold up.  Musicians aren’t slaves to Big Tech.  On the contrary, Prince actually said (in 2015) “record contracts are just like slavery. I would tell any young artist… don’t sign.”

You can talk about the ‘good ol days’ of the music business all you want.  But the old music business wasn’t actually as good for artists as it was for labels and publishers.  Yes, we have to change our ways as an industry.  Yes the laws need to change to reflect the realities of the modern era.  But, if you don’t innovate, you die.  Plain and simple.

 

Ari Herstand is the author of How To Make It in the New Music Business and a Los Angeles based singer/songwriter. He is the creator of the music biz advice blog Ari’s Take. Follow him on Twitter: @aristake

 

Photo is from Dead Kennedy’s Facebook Page

20 Responses

    • TS

      Good article, but the all-caps and exclamation points, and off-topic rants make this article less professional and read more as a personal blog rant than a music news article. Which is a shame, because now I can’t share it 🙁

      Reply
  1. Gaetano

    Legit read. I’d agree that most “oldsters” refuse to get with the times and adapt to the music renaissance. As for someone like Jeff Price not refuting mis-information, you never know why… There could be all sorts of reasons. Gotta just keep that in perspective.

    Reply
  2. 2

    Sure, there are outlier examples of artists making a middle class living — the 10K streaming guy, or the Vine star. (But the ones you hear about are often examples of people who are used as promotional vehicles by the tech companies to advertise their service. )

    Realistically, there are many more people making a few hundred or a few thousand a year from their music because of the internet. At the same time, there are many many bands who aren’t getting signed (like when there were 300 labels instead of 6) because niche labels don’t exist and large labels aren’t taking chances (the old adage that 5% of bands on a label made the money, 95% lost).

    I’d like to see an article breaking down something like Bandcamp. Sure they paid out millions, but if you have 20 million members each getting 50 cents and 10 getting 100K… it sounds like the same old neocon “trickle down” economy that works for the 99%, is promoted by the 99% (the tech companies) but isn’t really real.

    Reply
  3. FarePlay

    “True, an indie artist cannot go to YouTube and ask for more money (but most record stores didn’t negotiate their rates either). And true, Google/YouTube hides behind the outdated DMCA Safe Harbor Act claiming that they can’t be held responsible for user generated content (UGC) (videos uploaded by fans with songs they don’t have rights to use). But, it’s also true that the labels and publishers ignored “the internet” for a very long time and refused to acknowledge it could be a problem —until it was too late.”

    Ignored? Well I don’t think that was really the case, Ari. I think the problem was that the labels couldn’t figure out how to make money from it. For them or the artists. Even now the labels are making money, or hope to, from equity and licensing deals, while all these streaming services seem to be losing serious money and exist on VC money or in the case of Pandora stock options. Options which the founder and leader of Pandora couldn’t sell fast enough. Or in the case of Apple have deep pockets and use music to support hardware sales.

    This entire notion that this situation is black or white is simple limited thinking. I think it’s great that you’re a cheerleader and someone who is finding success from the new music business, but it is not a one size fits all business, yet somehow through all of this I sense music has been trivialized big time.

    Spotify is clearly not qualified to have such a leadership position in the music business. They are only here due to some bad decisions made by the music industry, coming at the right time with what they sold as an alternative to piracy and the largest VC backer in the world who can afford to lose billions of dollars on a bet. And care not about the collateral damage.

    Ray is from another era, as am I. And neither of us are willing to sign off on any of this in the name of progress. We’ll do it if it makes sense.

    Reply
    • A Realist

      FarePlay, you really need to learn a LOT more about this stuff. You’re very wrong, on many different points.

      [i]I think the problem was that the labels couldn’t figure out how to make money from it. For them or the artists.”[/i]
      Not true. What they couldn’t figure out is how to make [i]the same amount, or more[/i] money. Big difference. And we still see that today. On this very site.

      Everyone talks about the 25 or so years of the record business leading up to about 1999-2000 as some sort of God-given benchmark as to what the major recorded music industry is “worth.” But that was a false valuation, all along. In the first place, it was very fleeting. You are only talking about 25 – 50 years, maximum, of that type of revenue, which was, in the second place, based on economically “artificial” circumstances. A moment in time when the record industry owned the entire vertical of that market, from production to manufacturing to distribution. That was going to end, NO MATTER WHAT.

      [i]”all these streaming services seem to be losing serious money and exist on VC money or in the case of Pandora stock options.”[/i] “Stock options” are something that are given to employees and close investors. Options for stock can be traded in certain contexts, but to be clear, Pandora’s valuation comes form actual stock, traded on public markets.

      [i]”Spotify is clearly not qualified to have such a leadership position in the music business.”[/i]

      Clearly, you are mistaken. They ARE in a leadership position – precisely because they are qualified to be in it. More qualified than Lucian Grange or Marty Bandier is.

      And as for you not being “willing to sign off on any of this in the name of progress,” well, good luck stemming the tide.

      How’s that working out for you, so far, hmmmmm?

      Reply
        • Someone Who Understands

          And it’s not – and shouldn’t be – about what you don’t understand.

          Stop talking about things that are beyond you, fool.

          Reply
          • FarePlay

            I wonder what your next ‘anonymous’ I’d is going to be “All Knowing” perhaps?

            Always interesting to see the swagger and contempt shown by freehadists, who really only articulate opinions based on their own needs and justification for ripping artists off.

            And wrap that contempt into some misguided new agey justification.

          • Anonymous

            “freehadists, who really only articulate opinions based on their own needs and justification for ripping artists off”???

            Realist pointed out some very specific facts that he claims you got wrong. Not an opinion (and no indication he/she is a “freehadist”).

            “wrap that contempt into some misguided new agey justification”???

            I didn’t see any justification of any behavior, either. Just the pointing out some items you seem to be a bit confused about (as well as unwilling to address, going forward).

  4. The Snake People

    While Ari accuses EAst Bay Ray of being uninformed, Ari falls for the “casino fallacy” to refute falsely refute his point. It goes like this: you stand outside of a casino and find a couple of winners. Then you use these examples to report that “people” are making fortunes off casinos and declare it the new business model. Meanwhile much as Ray describes the net flow of revenue is FROM the players TO the casino. If Ari wants to implicitly attack Ray for being “old” he should make sure his arguments make sense. Otherwise he looks like another artogant millennial idiot who will end up loving in his parents basement.

    Reply
  5. AlexKx

    The idea of “adapt or die” is and was a threat for day one for people to steal copyrighted products. This has bled over to all aspects of life and now people expect to get everything for free. All this has lead to is misery and failure. Pathetic. Some people never learn. It’s called freedom and capitalism. Since it was not defended and still is refused you not only will lose it but already have in terms of all that was rewarded from it. Now you have neither peace nor prosperity.

    Reply
  6. Versus

    “But, if you don’t innovate, you die. Plain and simple.”
    Not plain, simple, or necessarily true. You seem to assume that the new and the young are necessarily right, and the old is necessarily wrong. Progress is not so linear; “new” does not always mean “improved”.

    As for which model is better, a few anecdotes proves nothing. We need to see real numbers overall, for starters: Were musicians making more money from recorded music under the old model, or under the new model?

    Reply
  7. Versus

    As for Prince, it’s easy for him to tell new artists not to sign with labels. But to offer (an unfortunately untestable) counterfactual, where would Prince’s career be without years of label support?

    Brilliant as he is, we still don’t know if he would have been successful or been able to find a wide audience without labels.

    Reply
  8. Musicservices4less

    I am always amazed how most articles are focused either on the major labels/publishers or independent/DYI artists. There is an entire middle industry that is doing fairly well. They are called independent record labels and independent publishers. By the way, just because you put a label name on your release that does not make you a record label. You need to have quite a few releases and different artists.
    Like any business, manufacturing, distribution and retail change over time. If you want to stay in business you must adapt. Those businesses that adapted, stayed in business. Those that did not or could not (brick and mortar retail) went out of business.
    We all know that there were basically two major changes to the then existing music business model that occurred in the 80’s/90’s. They were the advent of digital music and the commercial piracy of digital music. Both were major disruptors of the then music business model and have led to what we have today.
    And there are always many paths to adapt to change. In business the major choices are go out of business, change your business model, or sell your business. Obviously, the second one is the only choice to survive. It is the smart businessperson that survives. A very wise music business man told me many years ago, “if you don’t keep the lights on, you have no way to see out how to stay in business.” I guess I have always found a way to pay the electric bill (and my employees)!

    Reply
  9. Bill

    While everyone here is fighting, the real focus should be on the real problem. Theft.
    It’s real simple. Spotify, YouTube, labels, and beyond are thieves.
    I have a song in Spotify that has streamed 2.5 million times. That’s great – right? Not really, because I get about 250 bucks a month. That’s it. And sometimes, I don’t even get that. Spotify takes in hundreds of millions of dollars every month. They have 1,600 employees in offices worldwide. They enjoy cool work parties, in house concerts by artists, oh and they ‘don’t make a profit’.
    The standard royalty rate for years was 9 cents. If I was paid 9 cents times 2.5 million streams, I’d have a quarter of a million dollars inside of two years. Do you know what I could do with money like that? Take care of my dad, help my dog who suffers from knee issues, invest in more music creation, oh and I could actually eat on a regular basis.
    But instead, Spotify employees think that because they developed the technology, that they are more important than the very product that they sell.
    Think about that. If I owned a produce stand but didn’t want to pay the farmer for his produce, wouldn’t I eventually go under?
    I wrote to Spotify and asked them to share some of their 8 billion dollars that my music helped to create. They said no. They actually never replied at all. I asked Bandcamp to help us develop a paywall to make money off of streaming. They suggested you just hope that people pay you and only a few bucks at that. I asked Bandzoogle to help Indy artists do the same and got answers explaining that they think their service works on most cell phones but that they weren’t sure and would have to look into it. (Do you think other business owners ‘hope’ that people will pay for their items?)
    It’s greed and theft folks. It’s tech guys and gals that blog about their 80,000 dollar a year salaries while sipping 6 dollar cups of coffee and riding thousand dollar bicycles while the very musicians who submitted content to fuel these tech empires live in poverty, with no health care, and no organized protection or true representation.
    I’m honestly not sure how these people sleep at night.
    And don’t think Soundexchange is your buddy either if you are a musician trying to collect. I wasted many emails and phone calls with Soundexchange while they swore I had no Pandora plays in three years. Turns out, I had almost 90,000. But of course, I had to do the digging.
    Will I get paid for that? (the whopping 300 dollars) – probably not. Imagine that, having to WORK just to COLLECT your money. Do Spotify employees have to wait 6 months for their check?

    We can talk tech all day long. This is about people ripping people off. Plain and simple. And if it doesn’t end soon, there will be no more musicians to even worry about.
    http://www.billwestmusic.com

    Reply

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