3 Myths About the Recording Industry Debunked
When emotion drove stock-market prices to absurd new highs during the ’90s tech boom, Fed Chairman Alan Greenspan famously said the financial markets were going through a period of “irrational exuberance.” The flip side of this is periods of groundless pessimism. Right now, the music industry is at the tail end of one of those periods.
The media haven’t helped. Since 1999, there has been an unyielding stream of stories talking about the music industry’s ill health — “Burn, Baby, Burn” (Time, May 20, 2002); “Fight Back or Death Rattle?” (The Economist, March 31, 2004); “iTunes and Lawsuits: The Labels Still Don’t Get It” (Newsweek, May 3, 2004). These stories have given many people the impression that the industry is in a death spiral.
Yet the business has been restructuring itself in insanely positive ways. Here are a few myths about today’s record business:
MYTH NO. 1:: The prevalence of file-trading services and free music on the Internet indicates that recorded music may no longer be an economically viable business.
FACT: Among the only long-term truths we know about downloadable music is that people have such an instinctual desire for it that file trading spread before there was an infrastructure to support it. The major labels have been trotting out p2p file sharing as the rationale for their difficulties for years now, but no one believes it. In April, two business-school professors — Harvard’s Felix Oberholzer-Gee and Koleman Strumpf from the University of North Carolina — even released a study showing there was no statistical relationship between file sharing and subsequent dips in sales.
Another thing we know is that music is one of a trio of forms that’s expanded quickly across the Web – the others being pornography and games. This raises a question: If free downloading damages the music industry’s ability to make money on music, why doesn’t all the free pornography on the Web have the adult industry up in arms? What’s the difference between rock & roll, pervy movies and Tetris?
The difference is public relations. In a pre-Web world, music was already the most visible (or audible) form of entertainment. When p2p file trading arose, music’s former associations with street parties and boomboxes lost ground to associations with obscure computer programs like BearShare, BitTorrent and Kazaa v2.6.3. Overnight, music went from being a cool, highly visible medium to a type of surreptitious computer file hoarded by tech geeks.
Author's biography:
Alec Hanley Bemis lives in Brooklyn, NY and sometimes Los Angeles, CA. His writing has apeared in LA Weekly, The New Yorker, The New York Times, Los Angeles Times, Coolfer, Slate and other publications. He has taught in New York Unversity's graduate journalism program; produced projects for new media design firm Funny Garbage; and written for Faith Popcorn's BrainReserve. In 2001, he co-founded Brassland, a record label which documents a growing community of musicians based in New York City, including The National and Clogs.
