Features

The recent Copyright Amendment Bill was created to protect artists’ copyright, and ensure that the money for their ideas went to the right person. But how effective is the legislation? Will the change encourage people to buy CDs? Charlotte Greenfield asks the million dollar question: is it possible to make money from making music?
An increasingly more insistent voice of doom and gloom is predicting that there is no longer a viable way of making money out of music. No one is assuming this is the end of music itself. But it certainly does raise some problems because, as Frank Zappa put it, “art is making something out of nothing and selling it.”
 

Parliament has controversially responded to this problem in the form of a new piece of legislation, the Copyright (Infringing File Sharing) Amendment Bill, dubbed the “Skynet” laws thanks to MP Jonathon Young’s misguided comparison of the internet to the artificial intelligence network from the Terminator movies. From September of this year, copyright owners will be able to notify Internet Service Providers (ISPs) if someone downloads material through filesharing without paying for it. ISPs will then send warning notices to customers. After three warnings, the copyright owner can take a claim to the Copyright Tribunal, which can award them up to $15 000 in damages. In proceedings before the tribunal, it will be presumed copyright has been violated, leaving the burden on the alleged infringer to prove they are innocent. However, the law is less heavy-handed than its previous incarnations before the select committee, which would have allowed ISPs to cut off customers’ internet connection after their third warning.
 

What the law is going to achieve is a moot point (especially when the people drafting it confuse the internet with a self-aware computer trying to rule the world). The Listener’s technology commentator Peter Griffin speculates that the “hardcore downloaders…will chuckle as the infringement letters arrive, then switch to an internet provider that has contract-free terms, hopping from one ISP to the next as the entertainment bounty hunters chase after them.” Meanwhile, smalltime downloaders will come up before the Tribunal “sparking Close Up and Fair Go items and a backlash against the entertainment industry”.
 

Scott Muir, manager of ReFuel and a contributor to the Dunedin music.com’s Industry blog, doesn’t believe this is the purpose of the legislation. “That law really isn’t about you sharing a couple of songs with your friends, it’s about the people who are doing bulk infringements. [Think of] the guy at the Otara markets who had thousands and thousands of CDs for sale and he was at home burning them and selling them. It’s that kind of thing I think that the law is there to work on.” But, like Griffin, Muir concedes that there is always the chance for small-scale users to be penalised. “It’s a balancing act and it all goes back to the copyright issue.”
 

These laws are new but copyright is not. Whether or not you agree with the laws comes down to whether you think copyright is a good or a bad thing. “The law is as even handed as it can be at the moment,” says Muir, “but whether or not copyright should exist is a different matter.” It is not hard to accept that artists should have the ability to protect the music they generate, both for creative reasons and to give them the ability to sustain themselves economically. However, the game changes in a world where the copyright holder is not necessarily the creator of the music. In many instances, it’s a major record label rather than the artist that owns the copyright to a work and, of course, it is the major record labels that have deep enough pockets to use go after copyright infringers. There is also the more fundamental question of whether conferring a monopoly over a work to one person reflects the reality of artistic and creative endeavours, which do not always exist in a vacuum and are often more collaborative and less economically focused than the legal model would have us believe.

 
Nevertheless, money is a core component of the music industry. While not everyone in the music industry is aiming to become the next Madonna or Lady Gaga, the majority of musicians are only going to pursue the starving artist path for so long. So how do you make money out of music? Music companies have built their business around CD sales. Universal Music, Sony, EMI and Warners together control approximately three quarters of the music industry but the basis of their business is failing. “[CD] sales peaked in 1999 and 2000, at around US$1.1billion for album sales and now they’ve slid to the same level as in 1972,” says Muir.
 

David Kusek, Vice President of Berklee College of Music, expressed the concerns of the record industry when he said, “I think the days of making money selling recordings are largely over.” But as Scott Muir points out, there is some overreaction going on; “I would argue that in 1972 there was still a perfectly healthy music industry and people were still making money from it.” But the times are a-changing and the record companies are not keeping up. “The big ones buried their heads in the sand and said ‘this internet’s not going to happen’ and now they are suffering because of that.” The music industry’s not over, but it is changing. “The people who are savvy and smart are coming up with new ways to monetise around music.”
 

The internet is creating many new ways to do this. Songs and albums can now be sold from retail giants Amazon and iTunes, independent distributors such as cdbaby or direct from the websites of artists themselves. Streaming is another online avenue. As well as YouTube, websites such as LastFm and Jango are creating an experience that is part radio, part social network. Listeners do not have to work at compiling their music, but they are given much more freedom than from a radio station to choose and reject music based on their and their friends’ preferences. However, streaming is not as beneficial to musicians as it is to listeners. For a solo artist to earn US minimum wage (US$1160 a month), they would have to receive more than 1.5 million plays per month on LastFM which is not surprising given one play earns them a mere US$0.00075 (in comparison, a track downloaded on iTunes would earn them US$0.09).
 

Live shows are a more traditional option, but their roles too are changing. According to Muir, “at the high level artists are no longer doing live shows to sell records, they are putting records out to attract people to live shows…you see artists touring and having to tour because there’s not enough record sales and that applies to your U2s and those sort of bands. If they don’t keep touring, there isn’t any way their music keeps selling.” The same is true at all levels of the industry. “Bands like Left or Right or Alizarin Lizard who tour up and down New Zealand incessantly are not doing it for free. If they were losing money they would stop doing it.”
           

In the new and digitalised music industry, no one of these media will be enough for an artist to survive. Instead, according to Muir, the solution is “everything, it’s doing it all.” At the same time, “it doesn’t matter if you’re U2 or a band in Dunedin, your connection to the audience has to be the same.”

 
MySpace, Facebook and Twitter have created a new environment for this to take place in, and one that can bypass professional record labels. But not every member of an audience or fanbase is alike. “The people who buy the knock-off versions of Nike are not the same people who buy the real versions. The markets are different. Fashion has recognised that and music needs to recognise that too.” Astute artists are beginning to. Bands such Nine Inch Nails provide different versions of products on their online stores, each aimed at a different strata of fans. “The idea is that they give away a copy of a song probably as a low quality mp3. Then if you want high quality mp3, you might pay $4-5. If you want high quality mp3s and a t-shirt, you might pay $10. If you want it on CD, you’ll pay $15. If you’d like the vinyl version with the mp3 and the CD, you’ll pay $75” and so on and so forth. Radiohead took a slightly different approach in 2007 when releasing their album In Rainbows as a digital download that customers could order for whatever price they saw fit. The profits were similar to those projected from CD sales, and in a world where CD sales are dropping rapidly, it was a smart risk.
 

Such risks are essential in an industry that is in a constant state of fluctuation. “The 8 track car stereo was disrupted by cassettes. Cassettes were disrupted by CDs and CDs have been disrupted by the internet,” say Muir. “All of these disruptions are going to keep going. It’s just if an artist wants to use their musical skills to make them a living, they actually need to do more than just play. You’ve got to think of how many other income streams there can be.”