Saturday, July 29, 2017

How Music Got Free

In How Music Got Free, the author starts with his case of the music bug. He downloaded gigabytes of music, but rarely listened to it. If he were a little older, he would have had the thrill of seeking out. I remember the thrill of being able to find the record store that had the rare album. Alas, online music stores made it easy to order even the rarest of CDs and get it within a few days. Online music made it even easier. Record companies made purchasing music online expensive and difficult, so people logically responded by downloading it for free. (I wonder how much of this came out of the software piracy and the "demo scene".)
The bulk of the book focuses on the stories of a few characters in the piracy scene. One is a blue-collar worker at a North Carolina CD pressing plant. He is a super hard worker as well as a little of a tech geek. He discovers ways to sneak pre-release CDs out of the plant so that they can be be ripped and released by a "scene" group he has joined. Leaking the CDs also gets him access to topsites where he can download movies. He in turn sells DVDs to augment his income. (He is one of the rare people that attempts to make money off the distribution of pirated goods - even if it is not the CDs that he pirates.) Interspersed with his story is that of the record company executive. He earns crazy amounts of money as he presides over a sinking ship. In spite of the decline of the industry, he consistently manages to have a positive return on investment. He admits to knowing very little about technology (and losing money on failed tech investments during the dotcom era.) However, he does come up with the idea of monetizing music video which has provided one of the few new positive sources of income.
A third character in the novel is a British student who had taught himself PHP and SQL. He used those skills to set up a torrent site. He eventually had an invitation-only site that focused on high quality music. He kept everything open, believing that there was little that needed to be hidden.
These threads become somewhat intertwined by the RIAA. The recording industries organization is on a quest to improve music revenues by clamping down on digital piracy. Alas, the attempts have provided a stream of bad publicity and done little to stop the bleeding. Of the characters involved, only one received time in prison (after pleading guilty). There was little if any income generated for the music industry. The only thing that helped eliminate the piracy was the easy availability of streaming. Why spend effort finding and storing music, when you can just stream whatever you want whenever you want it? It does provide income to the performers, but not a whole lot. Live music, however, has risen as the primary revenue driver. It becomes the one "scarce" experience that can be a primary revenue generator.
One sideline of the book was the story of Pirate's Bay and the rise of the Pirate Party in Europe. They seek to drastically curtail intellectual property rights. Alan Greenspan is quoted as calling this something that will greatly harm the economy. Interest rates and economic growth are dependent upon scarcity. With the abundance that limitations on IP rights will enable, the economy would not function as it does now. The unasked question is whether this will be a problem? Have we gone way overboard on IP rights? Would we really be better off with a more limited timespan for rights. (Do the royalties received by the estates of dead musicians do anything to encourage music creation?) Perhaps the huge revenues of the CD era were just an aberration.

No comments:

Post a Comment