How Major Music Labels Continue to Shoot Themselves in the Foot

Over at PopMatters, Jason Gross (who runs the site’s Crazed by the Music blog) has recently posted his annual “Best Must Scribing Awards” feature, which also includes sections focusing on poor music journalism and strong articles that indirectly relate to the music business. Gross is a sharp, thoughtful evaluator of his peers (as well as a talented critic himself), and he has done an excellent job of highlighting the steady decline of the Record Industry Association of America (RIAA) and the major-label music industry. Combing through Best Music Scribing Awards and newer entries in Crazed by the Music, I found him mentioning three articles that particularly indicate how major music labels are approaching a bleak future:

--From a Crazed by the Music entry a couple of months ago: The Independent (UK) uncovers how the major label EMI wasted obscene amounts of money on…flowers. And empty houses. In some ways, what Emily Dugan documents isn’t terribly surprising—as major-label music into an extremely lucrative business in the early 1970s, lavish indulgence within the industry became a given. What I find a bit unnerving are the rough parallels between EMI and, say, Enron (minus the threat of indictment). Lower-level EMI employees are facing the ax and will likely struggle to find similar work elsewhere; even if they’re part of a corrupt system, they’re still not nearly as guilty of profligate spending as top-level executives, who will more than likely have enough in their bank accounts to live comfortably. Meanwhile, the RIAA will excuse the irresponsibility of the latter group by shifting the blame elsewhere.

--Fro the “Superior Scribing” section of “Best Music Scribing Awards”: Further evidence of shifting the blame elsewhere.

--From the “Quality Scribing” section of “Best Music Scribing Awards”: Michael Geist, a lawyer who specializes in technology law issues, demonstrates that—contrary to the RIAA’s claim that peer-to-peer (P2P) downloading is the primary cause of declining CD sales—P2P downloaders actually purchase more music. While there have been other studies that have denied a correlation between downloading and the fall-off in CD purchases, Geist writes that a “new study commissioned by Industry Canada” is arguably “the first ever empirical study to employ representative microeconomic data.” The key statistic is the study’s estimate that among a survey of over 2,000 Canadians, “12 additional P2P downloads per month increases music purchasing by 0.44 CDs per year.” It would be helpful to see a similar study for the U.S. and a few other countries for comparative purposes, but as Geist rightly points out, “it becomes increasingly clear that the industry has benefited from P2P and that there is no "emergency" that necessitates legislative intervention” (emphasis mine).

--Finally, from the “Other Arts” section of “Best Music Scribing Awards”: Even if P2P downloading doesn’t actually threaten CD sales, there is still the rather thorny question of its implications with regard to intellectual-property law. Daniel B. Smith’s article offers an unconventional response from legal scholar Christopher Sprigman: take cues from how artists in other artistic fields—culinary arts, stand-up comedy, and magic—have learned to foster creativity without relying on legal action. His implication is that within the context of a creative “free market” (read: no legal interference), musicians can learn to adapt to and police P2P downloading in a manner that will actually stimulate their art and increase their revenue. I have to admit that I’m a bit skeptical, but it’s an interesting idea, and Sprigman is correct to assert the music industry’s need for adaptation in this area.