Tearing the R.I.A.A. a New One
I am of the opinion that there is nothing unethical or immoral about downloading free music from the internet. The R.I.A.A. would have you believe otherwise, but after careful thought, I’ve come to the conclusion that peer-to-peer file sharing and the free access to music it creates is both justifiable and ethical.
So why is the R.I.A.A. so gung-ho about file sharing? It has nothing to do with the alleged declining album sales (which are probably just a symptom of the current recession). Their posturing about “protecting the artists” is surely just a smokescreen for their effort to destroy online music distribution period. They want to keep distribution rights in the hands, and pocketbooks, of the record companies. But it would look bad for them to come out and say “we are manipulating the law to stifle potential competition,” so instead they attempt to make it seem as if they are protecting the musicians. In reality, the R.I.A.A. is nothing more than a cartel with a monopoly on a distribution gateway.
The argument goes a lot deeper then the misdirection on the part of the R.I.A.A. The laws regarding file sharing need to be changed. Downloading an mp3 is not theft. Legally, yes it may be, but I am not talking about the law here. Some laws are wrong, and need to be changed. So let me restate: ethically, downloading an mp3 is not theft. No tangible object or product has been stolen when a person downloads a song to his computer. All that has happened is that a series of ones and zeroes have rearranged themselves on that person’s hard drive, resulting in a stored file. The R.I.A.A. would have you believe that a download is no different then stealing a candy bar from a store, but that argument is untenable.
For the sake of our example, let’s say Hershey’s makes 10 candy bars in a year at a cost of 50 cents per bar. The candy bars are in the store, selling for $1 per bar, and one is stolen. The remaining nine sell. Hershey’s brings in $9 instead of the $10 they could have, for a net profit of $4. Meanwhile, a record company puts out 10 albums in a year, again at a cost of 50 cents per album, and they sell for $1 each. Even if someone downloads the content of the album, there are still 10 albums for sale, and the record company can make $5 if they all sell.
The R.I.A.A. may argue that the availability of free music online will preclude people from purchasing an album in the store. Record companies unsuccessfully made the same argument years ago in an attempt to ban the playing of music on the radio. Now they say that online downloads will decrease album sales. Actual statistics demonstrate otherwise, and Napster and its descendants almost certainly led to an increase in album sales as people downloaded music, decided they liked it, and then purchased the album. However, even if the opposite is true, and mp3s are leading to decreased album sales—so what? Harsh words, perhaps, but let’s examine the situation a bit further and see if it really does matter if mp3s are leading to the demise of album sales.
When the car was invented, horse and buggy sales began to decline. Soon cars had replaced them altogether. Should we have foregone the automobile because of the negative effects it had on the horse and buggy market? Of course not. When something comes along and makes something else obsolete, it’s just a sad fact of life that the obsolete object fades away. Manufacturers of caps were no doubt dismayed when hats took over as the headwear of choice in the middle of the 20th century, and, in turn, milliners watched in dismay as men stopped wearing headwear altogether. It’s simply the way business works, and the same thing is now happening to music.
Music itself has always been a free medium. It’s something you hear. When you pay for an album, you are in actuality paying for the storage medium, not the music. Turn on the radio, go to a night club, attend a concert—the music itself is free. An mp3 is not a physical product, and neither is the music it represents. Consider parallel examples:
If a person watches Britney Spears dance on MTV, then goes to a night club and attempts to do the same dance steps, she hasn’t violated an moral code or law. If she watches an episode of Seinfeld, then retells some of the jokes the next day at the water cooler, she is still in the clear. Only music is treated like some sort of commodity. I’ll examine why in just a moment, but first it’s important to cover the issue of intellectual property rights.
The topic of intellectual property laws comes up often when mp3s are discussed. But let’s look closely at those laws as the R.I.A.A. would have you interpret them. Just who do they protect— the intellects or the property owners? The spirit of the law, with regard to music, is such that it protects the songwriters. If an artist writes a song, another artist should not be allowed to profit from performing that song without compensating the author. If the song is used to promote a product, or to enhance a scene in a movie, again the author should be compensated. If a radio station broadcasts a song, and in doing so generates ad revenues for the station, they too must compensate the author. Free music online in no way affects any of that. Artists are still fairly compensated for all commercial usages of their songs. However, the R.I.A.A. is of the opinion that individuals who hear the song need also offer compensation to the artist. That’s absurd.
If an individual downloads an mp3 for free and listens to it, that is no different then if he tapes it from the radio, copies it from a friend, or buys the album, copies it, and returns it. Some of those are legal, some aren’t, but all are harmless. The vast majority of the people who download songs aren’t going to buy them regardless of whether they can find an mp3 for free or not. Since the mp3 is there and free they will take it, but were it not available they would simply do without. Fans of an artist nearly always buy the album anyway, as the sound quality is superior, they get the liner notes, the cover art, and so forth.
When we include record companies in the discussion, we at last we come to the raison d’etre for the R.I.A.A.’s scheme. The record companies are the only entities that stand to lose out if it becomes legal to share music for free online. They are the hat-makers in the previous example. They have found a way to profit from music and musicians, and they will lose some of that profit if people are allowed to share music online for free. That’s unfortunate for them, but not a valid reason to make both consumers and artists suffer. And suffer they will, if the R.I.A.A. has its way. We’ve already seen how the consumer is affected. Instead of getting music for free, consumers will have to pay for it. But what about the artists? Do they benefit when their music is traded freely online? Yes, they benefit immensely.
The real profit for musicians has never been album sales. Rather, the big bucks come from merchandise sales, endorsements, concerts, appearances, and such. Free distribution of an artist’s music online doesn’t detract from any of that at all. It probably helps it. It can’t hurt it, as we are about to see.
Another example will illustrate this nicely. A band that signs an incredibly beneficial deal with a record company may get a 20% royalty rate along with a $1 million advance. No band has ever actually received a royalty rate as high as 20%, but to error in the favor of the record companies, we’ll go with that figure. What happens to that band and their money? It will cost at least half a million dollars to record the album, which the band pays for, leaving them with half a million. Their manager receives an industry-standard 20% commission, $100k, leaving them with $400k. The band’s lawyer and business manager each receive $25k. The band now has $350k, which amounts to $180k after taxes. Assuming the band has 4 members, that’s a whopping $45k each.
Now we fast forward a year. The album is in stores, and it’s a big hit. It goes platinum, meaning it sells one million copies. In doing so, the record company released two singles, each with an accompanying video. Each video cost $1 million to make, half of which is recouped by the label from the band’s royalties. The label spends another $200k on the band’s tour, which they also recoup from the band’s royalties. Another $300k is spent promoting the band on the radio, also charged to the band. That adds up to $1 million. Add that to the $1 million advance, and the band owes the label $2 million.
Luckily the band in our example has a 20% royalty due, because they’re going to need it. If all 1 million albums sold were sold at full-price, which probably won’t be the case as many will sell at a discount price or through a record club, the band will earn $2.00 per record. That works out to $2 million. The band has just enough to pay back the record company. The $45k each member received turned out to be the sum total of all their profit. Keep in mind that a 20% royalty rate has never been given to any act, and in reality most bands are lucky to even break even; many go bankrupt.
Meanwhile, what did the record company in our example earn? The gross profit for the one million albums sold is $11 million. The expenses involved in manufacturing the CDs, promoting the album, and filming videos come out to about $4.4 million, leaving them with a profit of $6.6 million.
That is what the R.I.A.A. is fighting to protect, and it is what we need to fight to see that they lose.
Here, have a free mp3: Currently Playing: Metallica – Master of Puppets
long…indeed
very well thought out. *applause*
haha depends on the length of your stay. =P
i agree with your views on music downloading too.
are you sure you didn’t go to law school?
also lol at the fitting song you chose to give away today.
great post!
intelligence = sexy
Well put, my man. Few people understand the inner workings of the music industry as well as you. You already know that I agree with everything. I’ve closely followed the statistics of the impact of downloading. They mostly show that mp3s haven’t affected record sales in any negative way. Actually, sales were up in 2000-2001 from previous years, and that was when Napster was at its peak. It’s all very simple: people who want to buy records will always buy them, and people who don’t like to buy music never will.
I always download MP3, but I paid like 35 bucks a year for the the website though.
Mamacita ! How long did it take you to craft this blog ?? Anyway, I like your thots on this. Are you sure you don’t want to be a lawyer ? I think you’ve def got it in you.
Happy Vday … my post wasn’t directed to anyone in particular, silly ! ;)
~PK
I liked your talk through of the RIAA and mp3s… maybe for once we should be like canadians, because Canada has stated that mp3 downloading is legal, uploading is not… hence mp3 players carry a flat rate charge, and music trading is still safe for canadians.
Bravo! I applaud you, sir, for this immensely well-thought-out and well-researched post.