Cognisant Cow

The anti record label sentiment that’s been circling through the Internet since the introduction of Napster in 1999 seems to have resurfaced again, particularly on Digg and Reddit. It’s common anti-corporation mentality: the corporations are screwing over the little guy by forcing him into bad contracts and taking all of the money that the musician rightfully deserves! Fight the man! I, however, am not convinced that record labels really are this sinister group of heartless executives willing to take candy from a baby.

Whenever I ask how we can solve the “problem” of record labels ripping artists off, or rather, how artists can get their fair share, the answer I continuously get is to get rid of record labels. “Who needs them? They’re dying anyway,” the people say. I get the feeling that in these people’s heads there’s this ideal world where good music organically reaches the masses through sheer merit and record labels are only there to leech on these profits. Their solution is to just remove the leeches and everything will be okay.

Imagine that you’re a musician. Imagine you would like to make money as a musician. A self-righteous musician might promptly say, “screw the labels,” and record an album in his basement and sell it on his web site. 100% of the profits would go directly to the musician, exactly as the anti-label crowd would want it. Who’s going to discover and buy this music? I don’t know about you, but I certainly don’t have time to troll through all of the crappy bands on MySpace for new music. Word of mouth certainly helps, but even the most charismatic of bands might only be able to spread through word of mouth only locally. Even if your band is amazing, only so many bands can be as widely talked about at any given time as a band like Nine Inch Nails. I could spend my time browsing MySpace or going to local shows or asking everybody I know for new recommendations but I don’t have the time to discover all of my music this way. Let’s be honest: most people don’t have this kind of time. Whether we like it or not, we have to be told what music is available, it has to be marketed to us or we’re likely to never find out about it.

Now you’re left with a bigger job. You’ve recorded your album by yourself and it sounds good. Even consumer level recording equipment can approach professional quality these days. Maybe you even had enough money to afford studio time. Maybe your band is actually very good. How do you sell 10,000 albums? No matter what, you’re faced with the challenge of marketing yourself. How does one become popular, get gigs, get radio air time, print albums, sell albums in stores, set up tours, make band posters, legally defend your work, publicize, gain a following, make deals to have your song played in a TV show or movie, and the holy grail: selling out huge venues? I can guarantee you that even the 900 people in your band’s Facebook fan page aren’t interested in buying your album. Marketing alone can be a full time job!

And let’s be brutally honest: the demand for music is far less than the number of musicians out there who want to ‘make it big’. When a record label offers a musician a deal, they’re offering a bigger chance that’s not feasible by self-marketing. You must understand how BOTH parties are sacrificing something. The record label is losing a lot of money in the initial costs of getting YOUR band up, recorded and marketed in the hopes that it’ll pay off. As a musician, you take essentially a pay cut per album sold as an investment in band image and publicity.

I feel it’s also important to address the musician’s cut of the profits. This is probably the number one complaint by the anti-label crowd. In a fair market, these values aren’t just randomly decided by the labels to screw the musicians as much as possible, there’s market forces at work here. It’s within the best interest of the record label to attain the most talented bands possible as early as possible. Clearly if collusion isn’t affecting prices, labels could weigh the costs of signing a new musician and determine a reasonable price for the musicians. If a competing label wants to get better bands, they could offer better deals. The competition would stabilize the price. One may not LIKE the price, but the price is still what it is: a market price. It’s not like these prices aren’t negotiable either. If you don’t like the terms, don’t sign! Get a lawyer to explain what you’re signing and educate yourself before signing. The musician is still ultimately the one in power of their content.

It’s easy to speak out against record labels if you have already succeeded due to their influence. I can guarantee you that Trent Reznor of Nine Inch Nails didn’t make it because of blood and sweat alone. Those MTV spots didn’t create themselves because the guys at MTV were blown away by how amazingly unique his music was. It takes a certain level of market influence to get there. I’m not saying that his music isn’t good; he wouldn’t be where he is unless he sold albums and people attended his shows.

Trent Reznor now speaks out against labels, even releasing albums for free on his web site. While I do applaud his generosity to his listeners by releasing free content, this is all possible precisely because money is of little concern to him. He is a success of the record labels. In a lot of ways, I believe his efforts are misplaced. His urging every musician to drop their label is like an accomplished neurosurgeon telling med students that they don’t need universities sucking all of their money when that’s the precise thing that can make one an accomplished neurosurgeon. I have found Reznor quoted saying,

“Anyone who’s an executive at a record label does not understand what the internet is, how it works, how people use it, how fans and consumers interact – no idea. I’m surprised they know how to use email. They have built a business around selling plastic discs, and nobody wants plastic discs any more. They’re in such a state of denial it’s impossible for them to understand what’s happening.”

I’m just completely baffled by the irony and obtuseness of this statement. This is nothing but bleeding delicious red meat for the anti-label crowd and contains little to no truth at all. Record label execs aren’t sitting in board meetings for the past 9 years saying, “Oh my god, this Internet thing is… I just don’t understand. I can’t even understand how… what does Bittorrent even mean? baah it’s probably just a phase anyway, nobody will be using this ‘The Internet’ in 5 years. Slumping sales? baaah just a phase, what people really want is CDs.” Come on guys. Really? You honestly think the corporate executives are that stupid?

Isn’t it true that over the past 5 or so years there’s an explosion of LEGAL avenues for digital music? Isn’t it true that while record labels took a few years to get on board the digital bandwagon, most labels these days have deals with iTunes and Amazon music stores? Last time I checked, I could find pretty much any song by any artist (barring some notable exceptions) on iTunes DRM free for $0.99. I can even download TV shows and movies on demand through iTunes. If you ask me, I’d say the labels have wised up. Sure there was a period of time stemming from the birth of Napster until the dawn of the iTunes music store that record labels were in a bit of a panic, not knowing how to react to the explosive changes that seemed to happen overnight but years have passed and people are now able to obtain the music they want in a format they want for a price they can agree with.

It’s understandable to drop a label once a musician is self-sufficient. Any very popular band can probably hold their own once their name is known by everybody and we’ve all heard their biggest hits. Trent Reznor has no problem with this; He’s been in some way on a record label from the early 90s until 2007 when he announced that he was truly a free agent. Now, when Reznor releases a free album and it makes front page of Digg and Reddit AND he sells $750,000 worth of ’special edition’ versions. Joe Somebody releases a free album and only his closest friends even know about it.

I feel like this war is over. The out of touch fat cats we all complained about in the late 90s are now becoming internet-aware leaders and it’s starting to show. The iTunes and Amazon stores continue to grow at phenomenal rates which is good for all parties. For the self-righteous people out there who still view labels as ripping off musicians, the solution is simple: don’t sign a contract and try to make it big on your own but let that decision be made by those who are in the position to make the decision. If you are signed on a label already, go ahead listen to Trent Reznor and drop it. I guarantee there will be another musician more than willing to fill that void and I guarantee that not everybody is going to make Digg’s front page by releasing an album.