Who’s Really Destroying Music? Take a Closer Look

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If you want to beat up on the majors, have fun – there’s plenty of material to go around.

But just be prepared to beat up on the tech sector as well, because they’re just as responsible for devaluing music and lowering artist welfare.  It’s the only balanced way to view the crisis that music finds itself in today.

Wait, what?  Isn’t tech all about innovation, access, and opportunity?  Aren’t the labels to blame for not keeping up, for trying to pound the music fan back into the 90s?

Sort of, but it’s just not that simple.  Sure, labels have been reacting to innovations out of Silicon Valley for more than a decade, and doing a mostly poor job of adapting.  But beyond the breakneck breakthroughs and exciting disruptions, tech giants are ultimately profit maximizers – or, they’re trying to figure out how to get to profitability.  And just like consumers, they rarely want to incur costs for music.

In fact, they mostly fight tooth-and-nail to avoid any costs or liability, even though free content is enhancing their bottom line by billions.  That goes for ISPs, Google, file-swapping apps, device manufacturers, whatever.  There’s rarely a discussion about how to compensate the creative class without some legislation or lawsuit hanging overhead.

But tech is cool!  It’s where everything is going, the music industry just needs to adapt!  Well, just try tracking your content down through DMCA takedown procedures, try making money on the Limewire Store, or try getting subscribers to pay for your well-crafted-and-curated startup.  Get past the cool-factor, put down Wired Magazine for a second, and suddenly a different sort of cool emerges – a cold-and-calculating business approach, just like the majors and everyone else seriously trying to make money in this game.

The fanboy blinders always kill the bigger picture.  Because if you think Steve Jobs is part of the solution, then you’re ignoring concepts like “Rip. Mix. Burn.” and the real economics behind iPod+iPhone+iPad+iTunes.  If you think Google is great for music, then maybe you’ve never found entire torrent discographies in one search, or received a paltry check from YouTube.  Sure, Google may smartly integrate paid results as part of its upcoming music launch, but they’re just as likely to shuttle personal collections into the sky.  And guess where those songs came from?

This is not a dig against game-changing technology, just a question-mark over why music is never cut into the action.  The iPod, for example, is an incredible innovation that upended music consumption overnight.  But without the music and the money required to make that music, the magic is gone.

But aren’t majors responsible for folding their arms, scaring away investors, and forcing startups into bankruptcy through ridiculous licensing costs?  Absolutely, but that’s only part of the picture – and this discussion goes far beyond the big four.

In fact, music startups themselves are doing everything they can to make this space work.  Tim Westergren has been pushing every button to get listeners to pay, and competitors like Slacker are achieving some level of traction through direct mobile billing.  Spotify has pushed to 650,000 paying subscribers, and Vevo is ramping CPMs into the $20s.  But getting some of the people to pay some of the time is just not enough, the souffle needs to be fully-baked.  And that is difficult to achieve in hostile tech territory.

And what about the artist?  Here we have an army of creators trying every experiment imaginable to monetize their fan relationships.  They’re hitting the road, Twittering till dawn, demo-splitting their email addresses, and bundling with abandon.  But they’re also competing with free, and just like the majors, most are having extreme difficulty generating a sustainable income.  And it’s not entirely their fault.

Paul Resnikoff, Publisher.