A number of people have pointed me to this article, outlining David Lowery’s talk at the SF MusicTech Summit where he attacked iTunes and Amazon (the ‘new model’ of the music industry) for taking a roughly 30% cut of revenues without – Lowery claims – taking on any risk or capital expense. So, where record labels used to at least come in and help the artist with the expense/risk of making a product, now all of that risk and responsibility falls to the artist:
In the new model you have these parasitic entities (iTunes, etc.) that take 30% of gross and provide no added value. As screwed up as the old business was there wasn’t this giant parasitic entity sucking out 30% of gross for nothing. This should suggest to any intelligent person that there is something seriously wrong with the NEW MODEL.
A number of the comments on that post have pointed out that there are a few deep and basic flaws in this logic. Most pressingly: iTunes and Amazon are retailers, not ‘labels’, and it really isn’t true to say that they haven’t expended resources or taken on risk in building their online platforms (have a look at how many players there are trying to make money in that game).
I agree with these rebuttals, but the real problem with Lowery’s reasoning is that if these entities were really ‘parasites’ that offered ‘no added value’ absolutely nobody would use them. Any artist can build their own website, upload their digital tracks, and stick a paypal or google checkout button on it. Nobody is forced into a partnership with an online distributer. Artists are asked to make a calculation: will I make more money selling my album on my own website, or through a retailer like iTunes/Amazon?
We can argue about the respective value/costs of that relationship, and it is obvious that more artists need to think more deeply about that question, but the fundamental point is that it has never been easier or cheaper to create high-quality music with the potential for mass distribution. That this has not made us artists rich is not a function of retailer’s fees, but to lower barriers of entry and the resultant growth in the sheer number of players in the field. It’s now a much larger and louder arena where it takes a long time to get noticed and established. I understand the frustrations of this, but looking out at the quality, diversity, and innovation that have started to take place in many forms of music (including – I hope – my own) as a result of this very phenomenon, I have trouble seeing it as an entirely bad thing.