There’s a terrific article by James Surowiecki in last week’s New Yorker (May 16 issue) titled Hello Cleveland, where he describes the ways in which musicians are making more money from playing live than they are from selling recorded music. Well worth a read.
The upshot is that the fortunes of musicians and the fortunes of music labels have less and less to do with each other. This may be the first stage of what John Perry Barlow, a former lyricist for the Dead, once called the shift from “the music business” to “the musician business.” In the musician business, the assets that once made the major labels so important—promotion, distribution, shelf space—matter less than the assets that belong to the artists, such as their ability to perform live. As technology has grown more sophisticated, the ways in which artists make money have grown more old-fashioned. The value of songs falls, and the value of seeing an artist sing them rises, because that experience can’t really be reproduced.
I was encouraged the other day to see Yahoo’s new Yahoo Music Unlimited service announced. Unlimited downloads of music for $5 a month (if you pay for an annual plan). Currently there’s over a million songs to pick from. Unfortunately, at the moment it’s for Windows only, and the songs are in the heavily DRM’ed version of Windows Media, but it’s a good indication that there’s starting to be the right kind of downward pressure on prices in the legal download world.
Barry Ritholz points out in his blog that this brings the value of ten years of unlimited music downloads to the low, low, price of $600. He further notes that this Kinda makes it hard to argue that losses per P2P user are in the 10s of thousands of dollars annually when $600 per 10 years is what it costs for a comparable substitute.
Mark Cuban (owner of the Landmark Theater chain, the Dallas Mavericks basketball team, and the angel funder of the Grokster defense) writes that this means that :
The RIAA can no longer claim that students who are downloading music are costing them thousands of dollars each. They can’t claim much of anything actually. In essence, Yahoo just turned possession of a controlled music substance into a misdemeanor. Payable by a $5 per month fine.
Of course, RIAA staffers won’t go quietly into the night. They will continue to scream loud and hard about evils of illegal downloading. The question is, will they move the money they are currently spending on court cases and filing suit, towards promoting the new subscription services that are available. Particularly Yahoo’s dirt cheap service.