The Music Industry And Pirates

Why do some artists not care if you illegally download and steal their work?  It is probably because the typical record deal goes like this.  The label gives an advance of about $250,000 to the artist to record the album.  The album sells about 500,000 copies at $10 a piece.  This yields $5,000,000.  The label takes their cut of 85%.  The artist gets $750,000 but first, the label deducts the advance leaving the artist with $500,000.  The label then recoups production costs which are about $300,000.  Then promotion costs of about $75,000, then video costs at $300,000 an then tour support at $250,000.  This leaves the artist $425,000 in dept to the label and that dept gets carried on to the next album which the artist is usually contractually obligated to produce, and then the next album, then the next album.  The artist is trapped in bad contracts and debt to the label while the label continues to get rich. 

When a congress person writes a law, there is the main law, but they then throw in about 25 smaller laws which get carried over with the main legislation and most voters don't even notice those ancillary laws getting passed.  Just like Congress and bad legislation, music label contracts also have little things thrown in.  For instance:  Damage fees.  These are left in the contract and if a lawyer or artist doesn't catch it, the artist pays for them.  Most sales today are digital downloads making "damage fees" irrelevant but, they are still in most contracts.  Other hidden items are packaging costs which are about 25% of the artist's cut.  This is even attracted to digital downloads where packaging is non-existent.  10% is deducted to cover breakage costs during shipping.  This started in the vinyl era and continued with CD's and still applies today with digital downloads despite the fact that an mp3 download can't get damaged during "shipping." 

10% of the artist royalty gets deducted for an antiquated system where retail purchasers will purchase 100 albums but get an additional 10 for free.  Since the artist is only paid on what is sold, they are not compensated for the free items which are non-existent in the digital download market yet deductions still continue for the "free" products in the digitally dominated market.  As you can see, artists generate a lot of money for people not involved in the creative process at all. 

Music will never die.  It will always drive industry, it will always drive innovation and will always be available.  Everyone wants and loves music.  Many artists feel that if five million people illegally download their album, that is still five million people they touched and that is a value far greater than money.  Especially if the artist will never see any of that money in the first place.

A band named "30 Seconds to Mars" asked a sold out audience at one of their concerts how many of them had a copy of their new album "This Is War."  The audience roared.  The lead singer, Jared Leto then asked how many people illegally downloaded it and the audience roared with increased volume.  "This is War" sold nearly two million copies and 30 Seconds to Mars sold out all of their tours.  30 Seconds to Mars is still in debt to EMI for $1,700,000.  The band has never been paid for their two albums.  When 30 Seconds to Mars tried to get out of their black hole of a contract, EMI sued them for $30,000,000. 

Major artists have been rapidly severing ties with record labels and some of the big labels are beginning to suffer for it but, who's fault is that?  If every time I walk past your house you come out and punch me, I'm going to stop walking past your house.  The labels have screwed over the artists for so long that the artists are beginning to find new ways to sell their art and craft.  The industry is suffering because the artist is not going to take it anymore.  Several artists have even sued EMI such as Kenny Rogers, Paul McCartney, Ringo Starr, Marvin Gaye, Pink Floyd, Graciela Beltran, Yoko Ono, Poison and even bands from the 80's such as The Motels are launching lawsuits.

Two years ago, over 7 million Internet users helped defeat the Stop Online Piracy Act (SOPA) -- a bill that would have censored the web and impeded innovation.  They also killed the  Protect IP Act (PIPA).  Since SOPA and PIPA have been stopped, creativity has continued to thrive -- both on and off the web.  Of course, piracy remains a major concern but, two years after SOPA, it's clear that the Internet has been really good for creativity and entertainment.  There have been countless studies proving that online piracy actually promotes the sale of movies and music and merchandise.  There have also been studies proving that the people who illegally download would most likely not buy the product anyway so there is no revenue loss either way - but there is still promotion. 

Go to websites such as IMDB and check out the movie and album profits over five years old and study the profit margins.   Despite having hundreds of thousands of illegal downloads, a movie which costs ten million to make still ends up with a profit of hundreds of millions.  How can this be if piracy is such a problem?

Singers, filmmakers, and comedians today have more outlets for creativity online than ever before. Thanks to the Internet we have so many more choices for entertainment, including YouTube videos, online-only movies and TV shows, and online-only releases of popular music.  Dinosaurs go extinct for a reason.

The only thing SOPA would have done is restrict creativity, collaboration, and freedom of speech. The world wide reaction demonstrated the power of regular internet users to affect policy -- and it's a tradition we should continue and employ for other bad legislation.

Kirstin Gillibrand co-sponsored PIPA which is no surprise considering she was the happy recipient of more than $610,000 from the Hollywood entertainment industry last year and they can't seem to figure out why they are losing money, artists and being sued.   Even more troubling is Ms. Gillibrand refusal to state whether or not she even read her own legislation before co-sponsoring it.  Instead, she posted on Facebook (which, ironically, was staunchly opposed to both PIPA and SOPA) "I agree there are real concerns with the current legislation and I'm working to make important changes to the bill."  Isn't this the kind of thing you ought to consider BEFORE co-sponsoring legislation and presenting it for a vote?  Did she even read her own bill before signing off on it?  Why would she co-sponsor a bill which could have decimated the film and music industry?  Oh, $610,000 reasons. 

These bills were written by the lawyers of the film and music industries and our legislators were going to blindly sign off on them.  They later backpedaled admitting that they had no idea how destructive these bills could have been.  Why are these people in office to begin with if they don't know what they are doing and they blindly accept the word of lobbyists?  Gillibrand wasn't the only one.  Chuck Schumer was also blindly on board.  Most of the senate was going to pass those bills until 7 million internet users took the time to read the bills themselves.  Why do we have to do their jobs for them?

After Gillibrand and Schumer's bill was essentially killed, Gillibrand took to Facebook again saying:  "While many of my colleagues and I have worked hard to address concerns with the current bill, it is clear this proposal will not create consensus on how to crack down on the real problem of online theft that threatens tens of thousands of New York jobs in a balanced way that ensures our tech companies will continue to flourish. It is time for Congress to take a step back and start over with both sides bringing their solutions to the table to find common ground towards solving this problem."  Nice backpedaling, there.  Why can't our elected officials see that the root of the problem is not a few PirateBay Users but the industry itself?

The real problem is that the artists are getting raped by the industry fat cats.  The politicians only listen to those with the money: the labels and their lawyers.  As long as we have stupid politicians writing stupid laws and not even reading them, is it any wonder that artists themselves are promoting piracy and dumping their labels and promoting themselves?  Again, whose fault is that? 

Comedian Louis C.K. had enough with the corporate and political greed so he made his own video, promoted it himself, posted it online and asked for a $5 donation.  I'm sure a lot of people "stole" it and Louis didn't mind because he made 1.34 million dollars in ten days.  How much of that did he have to share with greedy corporate fat cats who have no input in the creativity of his art?  If Gillibrand had her way, Louis C. K. would be in prison for promoting piracy of his own work. 

Check out this video created by an artist who posts his work freely:
http://www.youtube.com/watch?v=d1XZHVYqenw

If the text doesn't make sense to you, watch the video where Jayme and Joe share how they made the video.  Therein they explain some of the words, phrases and their thoughts on the topic:
http://www.youtube.com/watch?v=9F0dxEk1Tps

Greed and corruption has existed too long in the music and film industry and all that is about to change.  The greedy corporations have discovered that they can't effectively buy Senate votes, although senators are still trying to find ways to "protect" the music industry but maybe they should first protect the artists.