Reinventing the Music Biz

Reinventing the Music Biz. (Industry Trend or Event) Bill Machrone.

Abstract: The Recording Industry Association of America (RIAA) is making another attempt to thwart the popularity of MP3 with the Secure Digital Music Initiative (SDMI). SDMI's goal is to allow online music sales but limits the ability to make copies. Music CDs will have SDMI locks and digital watermarks to discourage piracy. Hackers are already discussing openly the best methods for circumventing SDMI.

The record industry is about status quo. The Big Five publishers (BMG, EMI, Sony, Universal/Polygram, and Warner) maintain absurdly high, cartel-like prices on CDs, despite plummeting costs in the technology. The industry destroyed the once-promising DAT format, because it could make perfect copies of CDs, and inveigled Congress into taxing the tapes and recorders into virtual oblivion. More recently, the industry, represented by RIAA (the Recording Industry Association of America), unsuccessfully sued Diamond Multimedia in an effort to block the sale of the Diamond Rio, an MP3 player.

The RIAA's latest attempt to maintain its power is SDMI, the Secure Digital Music Initiative. The goal of SDMI is to allow the sale of music online but to limit the ability to make copies. Soon, all CDs will be encoded with SDMI locks, so that it will become (theoretically) impossible to make unlimited digital copies. SDMI also includes digital watermarking, so that it will be possible to trace pirated material.

But the digital genie is out of the bottle and is not going back. Hackers freely discuss ways around SDMI limitations, especially in making MP3-encoded material available on the Web. Their schemes range from the grand (cracking SDMI encryption) to the mundane (digitizing high-quality analog copies of files, thereby circumventing all the digital locks on the doors and stepping through the open window).

The Big Five, meanwhile, are hedging their bets. Seemingly independent labels are experimenting with direct sales of MP3 songs. Groups such as They Might Be Giants are selling an entire CD's worth of music in MP3 format for $8.99. Individual cuts cost $0.99. Sites such as mp3.com, emusic.com, and liquidaudio.com. are putting deals together with popular artists as well as unsigned and independent artists.

Beneath all the positioning are a deep-seated dissatisfaction with the way the recording industry has manipulated artists to maintain control and a constant flow of profits into its coffers. The industry slaps a "new technology" tax on artists' earnings, which was once supposed to underwrite the cost of the transition from vinyl to CDs. Now the tax is a lobbying war chest, making sure the industry keeps getting its way. I won't even begin to address the sins against artists committed by the A&R suits, with their ironclad contracts and phalanxes of lawyers. New groups starve, a few groups at the height of their popularity do extremely well, and artists whose glory is fading are all but pushed from the nest. For a description of how label contracts work, read industry veteran Steve Albini's account at www.arancidamoeba.com/mrr/problemwithmusic.html. (Warning: You'll encounter some very strong language.)

Recording industry executives counter that the cost of the medium is the least part of the equation, that producing an album is an investment much like venture capital. They cite development costs, production professionals, consultants, and promotion. It's true that some producers have a knack for extracting the best from any band or creating musical "hooks" that are part of the zeitgeist; they know what's hip, now, happening, catchy, clean, funky, alternative. More likely though, they produce what the label exec wants.

I also download tracks from mp3.com that amaze me. Without the muscle of a major studio, without the investment of hundreds of thousands of dollars in proven producers, without top-of-the-line equipment, aspiring, unheard-of groups manage to put together some great cuts. And when I like a group, I can typically buy its CDs for about half of what they cost in the stores, and the group gets half the profit. Some groups have a new, genuine sound. Would a producer with his own aesthetic preserve it?

As musicians begin to realize that they can successfully promote themselves directly to their audiences, the very nature of the music business will change. Now that anybody can have a digital studio for $3,000 and can print a CD for well under a dollar, all you need is the talent and the desire. Airplay? It matters to some audiences, but kids tend to listen to the styles they already like, and the styles are ever more narrowly defined. Rock has splintered into roots, classic, AAA, country, metal, funk, R&B, punk, and others. Within punk music, my daughter cites ska, traditional punk, skunk, hardcore, and more. Radio stations can't keep up. Neither can the record companies. But the Internet can. It's time for the music business to reinvent itself.E

Now that anybody can have a digital studio and can print a CD, all you need is the talent and desire.