UK's Rough Trade Tries to Fight Back Against Declining Music Sales

In the face of a huge industry downturn, Rough Trade gambles on plans to open a huge (almost 54,000 square feet) retail outlet in London...

If you want to lose a lot of money, current wisdom suggests that opening a record shop would be a good way to do it. Better still, open the biggest music-only shop in Britain and spend a fortune on fitting it out with a top-of-the-range PA system and bespoke furniture created by one of Britain’s top architects � exactly what Rough Trade plans to do when it opens its new, 5,000-square-metre branch, designed by David Adjaye, in east London later this month.

Read the full article...

Global Music Market Shrinks by 5%

Global Market Shrinks By 5% In 2006, Says IFPI
July 03,2007

By Lars Brandle, London

The global recorded music market in 2006 slipped by 5% year-on-year, according to new figures published by the IFPI.

The combined market of physical and digital music dropped to $19.6 billion last year, down from $20.7 billion in 2005, the IFPI reports in "Recording Industry In Numbers 2007."

Against a backdrop of shrinking CD sales and piracy, however, the value of physical music shipments was down 11% to $17.5 billion last year.

The results "reflect an industry in transition," IFPI chairman/CEO John Kennedy said in his opening message.

Read the full article...

The problem with DRM

DRM (digital rights management) is a set of technologies used by publishers and copyright holders in an attempt to try and control how their content is used, both physically (as far as copy protection for CDs etc.) and digitally via technical protection measures, a "wrapper" of specific code added to the material that restrict the use and access of the media on certain electronic devices.

The wikipedia page on DRM is a good place to start for a quick overview.

In 1998, the US Government passed the DMCA (Digital Millennium Copyright Act), an amendment to US copyright law, which basically outlaws the circumvention of DRM systems.
http://www.copyright.gov/legislation/dmca.pdf

One of the main controversies surrounding DRM is the notion that it may interfere with the fair use doctrine, an integral part of US Copyright Law, that allows reproduction of copyrighted material under certain conditions:
Copyright act of 1976, 17 U.S.C. § 107. Limitations on exclusive rights: Fair use

The major players in digital music, iTunes, Napster, RealNetworks, and Microsoft, all incorporate some form of proprietary DRM into their systems, which can create problems for users that wish to access the music across platforms, or on remote devices, even while operating underneath fair use guidelines. The main question is, as long as the online providers have control as to the use of their products, do we really own the music we purchase?

The Electronic Frontier Foundation has put out a simple guide to let folks know exactly what restrictions are implied when purchasing music online from the major companies, and also places like emusic.com, where people can buy DRM-free music:

The Customer is Always Wrong: A User's Guide to DRM in Online Music

New Links Added

I have just added a couple of new links:

Creative Commons
Creative Commons provides free tools that let authors, scientists, artists, and educators easily mark their creative work with the freedoms they want it to carry. You can use CC to change your copyright terms from "All Rights Reserved" to "Some Rights Reserved."

We're a nonprofit organization. Everything we do — including the software we create — is free.

Harvard University Digital Media Project
The Digital Media Project aims to resolve emerging and outstanding problems revealed by recent social and technological change. A simple shift of format – the transition from hard-copy objects like vinyl records to digitized bits of information like MP3s – has prompted an upheaval of business models, legal principles, and social practices associated with the use, distribution, and control of media. This upheaval has created a void in the digital media world, a void that policymakers, industry representatives, and consumers are scrambling to fill with new laws and technological solutions.

The goal of the Digital Media Project is not to advance a simple agenda but instead to help educate stakeholders – government officials, the media, artists, businesspeople, and the public at large – about the choices and values that can guide law and technology to maximize the potential of digital media for the years ahead.

Anger at Prince Free CD Giveaway

The music industry has reacted angrily at a decision to give away the new album by US musician Prince with a tabloid newspaper.

Basically, dude is giving away copies of his new CD free with the newspaper, weeks before it even comes out in the store...

http://news.bbc.co.uk/2/hi/entertainment/6256732.stm
http://www.billboard.biz/bbbiz/content_display/industry/e3icab172bb79f71a07c1500a8b204a430c

In the news...

UK Retailer Fopp Shutters
From www.billboard.biz (6/29/07)

HMV Full Year Profits Drop Sharply
From www.ap.org (6/28/07)

iPhone May Not Rock Music Industry
From www.ap.org (6/26/07)

iTunes No. 3 Music Retailer in US
From www.ap.org (6/24/07)

A rumination...

There is a distinction between the record industry and the music business. The medium (CD, LP, etc.) exists as a vehicle. And that is what labels, distributors and brick-and mortar retailers are in the business of selling. But the music is an intangible, and as we see, it is quickly becoming divorced from these little wafers of plastic and vinyl.

Granted, mp3s sound shitty in comparison to records and even CDs, but their value is in their convenience, and that they can be a more direct mode of communication between artist and audience. (not to mention they can be found all over the place for free or close to it).

I don’t think CDs or LPs will be totally wiped off the planet, but they’ll be out there only as a premium product, within a very select market, for fans who want something extra. The music itself will be available with abundance from countless sources. I’ve seen the analogy comparing it to bottled water. I mean anyone can go to the sink and get as much water as she wants for free, but yet through intelligent marketing, against all practical logic, folks still buy the bottled stuff by the truckload because it has it’s own set of perceived benefits. And music on a physical medium that we can touch, feel, see and experience (with superior sound quality) will have a place. Or think about it like a t-shirt. You can get a blank one for a dollar at the thrift store, but I will gladly fork over $10 for one to help a touring band out, and other people will pay hundreds for a fancy designer shirt that basically performs the same function.

The other side of the coin is “Why buy the cow when you can get the milk for free?” I think downloading is really lazy for the most part. I am very nostalgic for the days when I would save up my allowance and go ride my bike down to the record store to buy that old Black Flag tape. Back then, you had to have a certain level of commitment to the record before you even bought it. And sometimes you gambled and lost (Fine Young Cannibals). I think a lot of people put downloading to good use as a tool to try before they buy and help make better decisions with their money, and there is nothing wrong with that. But on the other hand, I’m sure most folks are totally OK with being cheap and lazy, and there really isn’t any way to stop that from happening.

Record labels as we know them (including mine) are most likely headed towards the same fate as the ice wagon. The wolves of obsolescence are howling at the door. It's sad, and folks tend to balk at change, but it's a fact of life, nature, evolution. They are dinosaurs. The distribution channels are inefficient, the pricing strategy is unfair on both ends, and the whole system is all fucked up and bloated. The whole methodology is being shaken to its foundations, and honestly what I see happening is that the whole industry is going to have to shift from product based to a service based approach.

OK so this is where it gets interesting. What new problems and opportunities arise as music itself comes full circle, and returns to a primarily intangible state of being, as something that simply exists out there in the world without being doled out to us on a $18.99 platter?

Well, first of all, there is an opportunity to make the physical medium something that stands on its own two feet, as a piece of art, or a novelty or whatever, so that when folks buy a record, sure it’s about the music, but the thing itself will have to be something special and collectible enough to warrant the price tag. That is the only way I see the product aspect surviving, but then that’s only going to be a piece of the pie, that, on par with t-shirts, stickers, and posters or whatever.

But what else now? Will the label simply be an irrelevant useless middleman mucking up the stream? If music is free and out there for the fun of everyone, then what’s the point? Well, the internet is absolutely mind-boggling. It’s literally an open door to the entire world. At least as far as information and entertainment is concerned, anything and everything is just a few keystrokes away. Honestly, its way too much for anyone to handle. So, as is human nature, folks are going to find or create their own comfort zones, and really, we’re all panning for gold, trying to find that tiny nugget of value among so much clutter.

At this moment, the record company ceases to be about records, and becomes a signifier for people to follow, a true label, just like the good housekeeping seal of approval. “Hey, we like this band, and we will put our mark of quality up there.” But then also, it will be a sponsor, and help these guys with advertising, marketing, and exposure. It can act as the nexus point for a network between artists and fans. And then, by association, a label helps the audience filter through all the junk out there to find something special, hopefully. And so therefore the focus shifts to that of a service. As the doors are being opened, it can be the label’s job to throw out the welcome mat.

Obviously, this more intimate business model won’t really work for a giganto corporate media conglomerate, that’ll just as soon sell you a CD as it’ll sell you a tube of toothpaste. The concept of the poochy faced pop star being blasted into everyone’s ear via ClearChannel and selling ten million records are gone. People are way to savvy to follow that line these days, one can hope. This is built for the niche markets, the places in our economy where people still have passion, integrity and ideals. The initiative is to create self-sustaining pockets of interest, where all sides work together, share a common philosophy, and are focused on the same goal. That way, everyone has a vested interest in what happens, and we can all share the reward. The fans will have music that they truly care about, the artist will have a devoted audience, and the label will be there, as a service provider, to keep the system together and keep the pathways open.

In the news...

A couple of interesting articles...

The Record Industry's Decline
from Rollingstone.com (6/19)

Music Biz to slip for next 5 years
From www.billboard.biz(6/21)

Lawsuit against the RIAA
from www.ilrweb.com (6/26)