The phonograph was invented by Thomas Edison in 1877, and the first commercial recordings marketed in 1888. By 1929 record sales were a business generating annual sales of $75 million, but by 1938 sales were just $26 million. Radio had dealt commercial recordings a heavy blow, as radio ownership grew from 2 out of 5 homes in 1931 to 4 out of 5 by 1938.
The threat from radio was the first, but not the last, major disruption that the recording industry would experience. Indeed, for most of its short life, the recorded music industry has been under attack – from radio, tape recordings, blank CD media, and the internet.
In each case, the solution negotiated has been some sort of royalty or levy. For radio, it has been a royalty on the plays. Easily tracked, this has been seen as an equitable solution for artists. For recordings, the solutions many countries have employed are private copy levies. In Canada, for instance, a portion of all revenues from cassette tapes and blank media, goes to a non-profit called the Canadian Private Copying Collective, which then distributes those revenues to the artists.
Today the recording industry is asking that a similar levy be placed on the Internet — that a proportion of all Internet usage be deemed “music” and that everyone who uses the Internet be asked to pay for music, whether they are music lovers or not. It’s similar to the EFF’s voluntary collective licensing proposal from three years ago, except that the EFF proposed that people who listen to music be the ones to pay for it — not the entire Internet population.
Time Warner’s Ethan Kaplan wrote a post titled Reducing Back to Art this weekend about the value of art to society. In typical fashion, Michael Arrington called it BS. Arrington’s somewhat right. The issue here isn’t the value of art, but rather the business of art. Art is flourishing today. The business of art isn’t. More music is being created by more musicians than the label system has produced in a good many years.
The phenomenon of the artist as business person is a twentieth century phenomenon. Throughout history, artists have survived and prospered because of patronage. Think of the Medici’s and Michelangelo, or Mozart and Emperor Joseph. In the twentieth century, the business of art replaced the patronage system with profits earned from distribution. In the twentieth century, however, performed art such as music, theatre, dance and opera, has relied upon patronage or sponsors from government, business and private individuals as well as the box office. Even the greatest rockers of all time — The Rolling Stones — had sponsors on their last tours.
The patronage model is especially effective in the United States, where the National Endowment for the Arts and like minded citizens have combined forces to create some of the greatest performance art available in the world today. That’s why Ethan Kaplan’s post, which casts US society as ignorant of the value of art, is BS.
But when Michael Arrington decries the removal of “market forces” from art, and casts aspersions on “government subsidized” art, he’s clearly speaking from a position of ignorance. Government subsidies are already in place, and market forces have little to do with the value of art. If market forces were the way that we measured that value, then Stravinsky’s Rite of Spring would never have been performed again after the booing, catcalls and subsequent riots at it’s opening in 1913. And that’s why Michael Arrington’s rebuttal to Ethan Kaplan, is also BS.
Warner’s idea, that all Internet users should pay the freight whether they listen to music or not is flawed. It assumes that all Internet users download music and in equal measure. As a society, however, we shouldn’t be afraid of proposals that are similar to a private copy levy or the EFF’s voluntary licensing proposal. We should be asking:
- What is the mechanism by which the levy is assessed? Is it narrowly focused on the artists who will benefit, or is to so broad that it sweeps in large numbers of people who might never consume that art.
- Who is entitled to the money collected, and in what proportion?
- How does an artist get on “the list” to receive payment?
- How does an artist opt-out should they not wish to be a member of this pool?
- How does the public know whether the music they’re paying for is part of the pool, or not?
As a consumer, the notion that I could make a monthly payment and download whatever music I wished is appealing to me. The devil’s in the details.