< Meet the New Boss, Worse Than the Old Boss

Transcript

Friday, December 27, 2013

BROOKE GLADSTONE:   That’s a song from Camper van Beethoven, one of David Lowery’s bands. Lowery, an early champion of the freedom of the internet and a teacher of music business, says the current environment is crushing musicians, but not because of overregulation. He says the culprit is the government’s lax  response to pirate sites, which leaves artists at the mercy of places like iTunes or Google, which throw pennies to creators who otherwise stand to earn nothing. Moreover, he says the prevailing notion among the digerati that music consumers shouldn't have to pay makes the situation worse.

In Lowery’s blog, he argues in favor of the infamous old record company system. “The new boss,” he wrote, “is worse than the old boss.”

DAVID LOWERY:  I did this as hyperbole, right? We could agree that basically if the artists do not receive very much revenue under the old record label system. But most people ignore the fact that the labels actually gave artists advances, based on moderate success. And yet, they also expected like say, nine out of ten of these artists to remain un-recouped and never see any royalties, other than their advances. And when you compare that, on average, to what somebody directly, doing a deal with iTunes gets, they actually get less.

Now, one place where revenue does rise that’s really interesting is the artist’s response to falling recorded music revenue is to tour more. Most artists are playing for less people, essentially with the same expenses.

BROOKE GLADSTONE:  So why do we keep hearing that artists are doing better?

DAVID LOWERY:  One of the reasons is because there’s reports floating around on the internet. There's one called “The Sky is Rising.” Now, everybody looks at that and go, well yeah, when you look, it says revenue’s up. These are studies that were paid for by, for instance, the internet lobby. But look at the fine print. What they’re including as revenue, for instance, is iPod sales. They have musical instrument sales, right?

  [BROOKE LAUGHS]

There are charts in there that show digital revenue rising. Well, of course, it’s rising. It started at zero. There’s another chart in that very report that says [that] the number of music transactions is rising astronomically. Well, [LAUGHS] before iTunes only a handful of songs were available as singles. So now, essentially, instead of buying one album, you’re buying 14 tracks, and a host of other things.

And that’s not the only study like that. There’s a bunch of ‘em out there. They’re all commissioned by companies that would like the status quo to continue as it is.

BROOKE GLADSTONE:  Well, what about the argument we hear that maybe artists are making less money, but recording costs are lower, so they’re doing okay?

DAVID LOWERY:  Not true. I have run a studio complex for 20 years. Yes, the recording device itself has gotten cheaper, but the highly skilled labor is charging as much as it did in the past. We have recording costs falling but not nearly as much as people think they have.

BROOKE GLADSTONE:  Well, what about the argument that artists now get to communicate directly with their fans and these core fans can support them?

DAVID LOWERY:  Yes, I think certain kind of artists, you know, like Amanda Palmer is very gregarious and willing, literally, to show her breasts to raise money, okay?

BROOKE GLADSTONE:  I think that may be a slight extreme example, but okay.

DAVID LOWERY:  Okay, well I’m just saying that there is a certain gregariness [gregariousness]. Could you imagine like a Jimi Hendrix raising money this way? How do you raise money from nonexistent fans when you're making something that people don't know that they want?

BROOKE GLADSTONE:  But hasn’t that always been the problem?

DAVID LOWERY:  Well yes, but we had a logical way of compensating those who took the risk, right? The founder of Atlantic Records, Ahmet Ertegun, didn’t have to have a crowd of people first agree to take a chance on, say, a Led Zeppelin record or a Captain Beefheart record. These were things that the people didn't know that they wanted yet, but because he knew he would be compensated in a rational way, if he were right, he would take the risk.

BROOKE GLADSTONE:  Would you say the cure is simply getting the services where people get their music now – Spotify, Pandora, iTunes, Google – to pay the artists more per listen?

DAVID LOWERY:  Look, a lot of people don't like me on iTunes  because iTunes represents something bigger in people’s minds. It’s like addressing Santa Claus and his union troubles with his elves or something.

  [BROOKE LAUGHS]

But listen, iTunes takes 30% of gross revenue. The old mom-and-pop stores, with their physical goods, breakage, shipping, stoned employees, electricity costs actually took 40%. So how do you go from total brick-and-mortar physical inefficient system and only save 10%. Ultimately, in the background all artist negotiations, there’s this notion that like this is gonna keep happening and you’re gonna get nothing, or you can sign this agreement with us and you’ll get a little tiny bit.

BROOKE GLADSTONE:  Do you think this situation will be fixed?

DAVID LOWERY:  I think that, actually, it’s much easier to fix than people think it is. Largely, the infringement goes on, on the internet, right? The companies that do the infringing make money through premium fees that they charge through MasterCard, Visa, AMEX, PayPal.

BROOKE GLADSTONE:  Mm-hmm.

DAVID LOWERY:  Or they do it with advertising. So stop companies like MasterCard and AMEX and PayPal that allow these sites to have accounts with them. They’re not supposed to be doing it anyway, by law, right now.

BROOKE GLADSTONE:  Part of what really irks you is what you see as hypocrisy on the part of some of your erstwhile friends in [LAUGHS] the digerati, people like the Electronic Frontier Foundation, which are staunch defenders of internet privacy but also seemed to be equating the use of other people's property with freedom.

DAVID LOWERY:  Well, here’s what the Electronic Frontier Foundation refuses to acknowledge, okay:  Freedom is actually a careful balancing act between the rights of different parties.

BROOKE GLADSTONE:  Mm-hmm.

DAVID LOWERY:  Freedom is actually not this thing that the Electronic Frontier Foundation sells you. They’re selling you nihilism, where basically everybody gets to do whatever they want to do, no matter what it is. To me, the bigger problem isn't even piracy. The bigger problem is this notion that floats around in academia, and especially in progressive circles, that somehow it’s gonna be good for us if we kill the record labels and the movie studios. That’s, actually, the big danger. If we don’t have a market-based cultural good system, we’re left with patronage and government subsidy. The right wing in this country is never gonna go for tax dollars going to artists. And, besides, do you really want the government deciding which artists get money?

On the other side is patronage. Who can afford then to be the patrons of art? This is the, the craziest thing that I think the left in this country is going through in academia. I think they’re like drinking the “Grape Kool-Aid” right now.

BROOKE GLADSTONE:  David, thank you very much.

DAVID LOWERY:  Thank you, appreciate it.

BROOKE GLADSTONE:  David Lowery is a member of the bands Camper Van Beethoven and Cracker and blogs at Trichordist.

  [MUSIC UP AND UNDER]

Guests:

David Lowery

Hosted by:

Brooke Gladstone