Although films such as The Exorcist and The Shining have their place, nothing gives me more nightmares than the music industry.
This article is a mild cross between a rant, ramble, and musing. It’s primarily about the music industry, and the perennial question — ‘What happens when a market gets used to free goods?’
History
I’m going to gloss over the history of the modern music industry so shamelessly that any journalist with a modicum of self worth of have mild convulsion reading it.
The mp3s and the Internet
Two big factors were responsible for widespread piracy in the music industry.
CDs were a lossless format that allowed for audio that was crystal clear. But researchers in Germany trailing back several decades had discovered that lossless audio is inherently inefficient due to the limitations of the human ear. Humans are unable to discern certain traits of audio (frequencies that are near each other, sounds preceding a high pitched impulse, and so on)… Therefore, you can save space by cleverly omitting details of sound, and mp3 files could compress audio up to 12 times its original size. Given that these were days when at 1GB hard disk was considered impressive, it was no small feat. You could store hundreds of songs where previously you could store only an album.
The second factor was the Internet. People could hear about new music, share new music, and distribute new music at an unprecedented rate and scale.
Leakers
Oh yeah, you also had people leaking music. And when you offer something priced at $0, it’s no surprise that people aren’t going to want to pay more.
And so you had the proliferation of services like Napster, Oink’s Pink Palace, Limewire, and torrenting services, that meant that people around the world could gain access to stuff for free.
People stopped buying CDs as much. Eventually, Spotify had the bright idea to save people the effort of torrenting by offering basically all music at a pretty low price — $10 a month. Ten years prior, people would spend $50-$60 bucks a month on CDs. The market was immediately reduced in value.
Now one might think that given the amount record labels saved on CDs, it probably evened out. Not quite. Firstly, Spotify (the worst offender) and its fellow streaming services, give such a minute percentage of profits to artists, that most artists are below minimum wage if you consider only streaming income. Secondly, Spotify still has a free tier, which means you have the convenience of not torrenting, access to virtually all the music in the world, and only the minor inconvenience of the occasional ad.
Here’s the concerning bit, though. People are used to getting music for free.
The Dilemma
In the Internet age, everyone is a pirate. Some pillage what they can. Some are better than others. I’ve known folks that would torrent a movie, only to buy it multiple times in the future to make up for it. But for the most part, people are perfectly comfortable getting music, and movies, and so on, for free.
The first concern is the ethical one. Stealing is definitely wrong. There are understandably circumstances where people can’t afford content, or its made so ridiculously inaccessible, that it’s justified. But it’s the Internet age. You can buy everything from a digital copy of an album to an original vinyl pressing. Inaccessibility is rarely an issue.
It’s very easy to look at one’s minor theft, step back, and say that it’s barely a nick in the big picture. But these nicks add up.
It’s bad enough if you’re an artist who isn’t able to make a living from their own hard work. But what if you’re an entrepreneur?
What happens if you enter an industry that’s been tainted? I’d content that it’s nigh impossible to win, and I’d argue that Tidal is the perfect example of this.
Tidal didn’t have the easiest start in the music streaming game. It was buggy, had hot and exclusive content, and was more expensive than other streamers. But it’s also definitively a better service. It offers Hi-Fi audio, and pays artists considerably more than other music services.
But there’s a certain arrogance that has come with the market taint.
Why do I have to pay $15 for Tidal when I can pay $5 for Spotify or just torrent exclusive content?
Jay-Z is simply a capitalist charging us more for no reason in particular.
Serves you right for having exclusive content. If I can’t listen to it easily, I’m going to torrent it.
Why pay more for Tidal? Because the market is undervalued and won’t get fixed until you do
Jay-Z is a capitalist? Probably. But that doesn’t make what he’s doing wrong.
Exclusive content? We deal with exclusive content on a regular basis. From getting a Netflix and HBO subscription, to going to a Target instead of a Walmart.
But when you devalue an industry as much as the music industry has been devalued, it seems there’s no coming back. And that’s worrying. Of course, I may be sensationalizing it more than I think I am. I may be too harsh on Spotify, music labels, and pirates. But as an entrepreneur, I think I’m allowed to mourn for an industry I’m fond of.
