CEPR - Center for Economic and Policy Research

Multimedia

En Español

Em Português

Other Languages

Home Publications Blogs Beat the Press Creative Workers Need to Be Paid, the Question Is How

Creative Workers Need to Be Paid, the Question Is How

Print
Tuesday, 19 June 2012 19:23

There is a lengthy and painful debate over at the Trichordist over whether young people are being immoral when they listen to music that they didn't pay for. The lead piece "letter to Emily" explains to a young woman how she has an obligation to pay for the music she listens to. The piece accurately documents the dismal economic plight of most musicians. It then throws in the statistics that are familiar to those of us who follow the issue closely:

Recorded music revenue is down 64% since 1999.

Per capita spending on music is 47% lower than it was in 1973!!

The number of professional musicians has fallen 25% since 2000.

Of the 75,000 albums released in 2010 only 2,000 sold more than 5,000 copies. Only 1,000 sold more than 10,000 copies. Without going into details, 10,000 albums is about the point where independent artists begin to go into the black on professional album production, marketing and promotion.

All of these facts are right. That should tell us that we have a system that doesn't work. We can harangue Emily about being an immoral person, but that is not a serious response. The copyright system might have been fine for 16th century Venice but it is not a viable way to support creative work in the Internet Age and we are not going to change that by preaching to the heretics.

The serious route is to find an alternative mechanism. I have proposed one, an Artistic Freedom Voucher. This is essentially an individual tax credit, modeled on the charitable deduction, that would allow everyone to give a certain sum (e.g. $150) to the creative worker(s) or organization who they most like. The condition of getting the money would be that a creative worker register with the I.R.S. just like a charity or non-profit must register and give up their ability to get copyright protection for a period of time (e.g. 5 years). 

It is a simple, low-bureaucracy way to get tens of billions of dollars a year to support creative workers. I am sure that there are other better ways to do this, but the point is that copyright is dying fast.

Creative workers can get upset about that fact and scream at the Emilys of the world for being immoral or they can try to think of a way of developing a model that works in the Internet Age.

Comments (17)Add Comment
There is an interesting argument
written by Brett, June 19, 2012 10:06
That I confess I've never taken the time to fully flesh out, but it goes something like this:

The music industry is in the shambles it is in today because of its own decisions. First, they had everyone using the same internet service in the late 1990s (called Napster), and rather than buy it and monetize it, they destroyed it. Instantly, copycats surfaced and where you had one platform serving everyone now you had a huge assortment of different programs all providing free music. Suddenly their problem became infinity worse.

The music industry chose to fight their customers rather than try to work with them or support them for being interested in their product. They filed ridiculous lawsuits putting an unlucky few in debt peonage to set an example to the world that you MUST BUY THEIR MUSIC or risk these sorts of repercussions. However, the tidal wave of internet downloading was much more than they could stop just by these mafia like tactics (using the strong arm of government to do their bidding - see http://www.wired.com/threatlev...ng-appeal/).

Furthermore, the types of artists they promote have naturally led to declining sales. The artists that are top 40 hits these days do not make good albums. They make singles, and that is it. Rihanna, Bieber, Selena Gomez, One Direction, Drake, Ke$ha, etc. -- all of these artists are singles artists. They don't produce an entire album that anyone would want to listen to. And thus people don't buy their albums. Why buy an album when 10 out of 12 songs are terrible? No one does this.

Back in the day, every highly promoted band or artist made both singles and after the Beatles and Bob Dylan they made albums that were desirable. People wanted the entire album, not just the top tracks. Today that is no longer the case, except in rare exceptions (see Kanye West, or Adele -- they sell millions of albums because they can put together more than one hit song).

So if the geniuses who run these failing music companies would promote actual artistic talents rather than Disney artists who are single artists, who lack talent, who no one would ever listen to for a full album, then maybe they would have a legitimate complaint. But since they don't, and we keep getting things like Rebecca Black's Friday, then who cares? Let them rot and go out of business.

Music will survive. Artists can record and release online. They don't need the music industry. The good bands will rise to the top, and perhaps without the music industry we will be spared the terrible yet popular due to payola and advertising bands like Nickelback, Staind, Hinder, Puddle of Mudd, etc.
Isn't the problem
written by Michael Soileau, June 19, 2012 10:28
The music industry is busy killing every viable monetary model out there? Piracy is WAAAYYY down from 1999, it was up to around 17%, now it hits at around 9%. Even if no one pirated, that still means the amount of sales would be abysmal. The average American spends 17 dollars on music.

So the step has been to move music into streaming services like Pandora and Spotify, which has in turn, reduced the economic incentive to pirate music. However, the music industry has fought tooth and nail against Spotify and Pandora. Netflix has likewise had the exact same problem. People who listen on Spotify spend less of an even smaller pie on regular CDs and outlets, and Record Labels aren't that fond of Apple's iTunes either.

Ultimately, the music industry has a major problem they can't address. Because they are the problem. Record labels existed to allow people to discover bands and music. That is no longer necessary. Ergo, they are no longer necessary. But they still want to make money and they hold the copyrights.
...
written by Lemme C., June 20, 2012 1:16
"Creative Workers Need to Be Paid, the Question Is How"

What exactly is an "Un-creative" worker?
I just listen to the radio
written by Lord, June 20, 2012 1:30
Who gets paid how much from that?
It's Broke But Can Vouchers Fix It
written by Last Mover, June 20, 2012 7:03
Middlepersons in the performance and recording industry between creative workers and the audience tended to use a winner-take-all model by selecting a few from the vast oversupply of wanna-be stars to groom and advance them into blockbuster status.

Whether some workers were underpaid given the aggressive overexposure remains a question but it certainly barred many others from entry at all. After internet technology creatively destroyed this arrangement it appears ironically even fewer could enter successfully given the reaction of the industry to attack consumers in order to preserve revenue and its substantial cut of profit, now taken more clearly at the expense of workers via abuse of their intellectual property.

Whether a voucher system could solve this problem raises several questions:

Free riders who don't contribute but consume the benefits, claimed by the industry to be the same problem as now.

High transaction costs for those who like many different creative workers as well as high absolute costs in order to make effective contributions. It's similar to the micropayment problem on the internet.

Unintended effect of barring unknown but skilled creative workers who can't be liked and vouched for until they're known in a Catch-22 sort of way. Part of the voucher payments would need to support various contests or whatever necessary to select those with potential to receive full voucher support.
...
written by Eleanor, June 20, 2012 10:04
I agree with the commenter above. I don't think the voucher system would work.
...
written by Jay, June 20, 2012 10:05
It's almost like the music industry asked for this problem. Consumers got burned for years buying overpriced music that had one or two good songs. They don't even have to physically produce CDs, tapes, or albums but still charge the same price for downloads. Now, consumers are reluctant to buy anything without sampling it first and now they can get the whole thing without buying. The record companies need to add more value to motivate people to buy. How about throwing in a small autographed photo, access to exclusive content, or randomly include a voucher for concert tickets? Although, I doubt this makes a difference until the music industry adapts to its adult audience instead of force feeding it what it wants to make popular with teenagers.
...
written by Eleanor, June 20, 2012 10:18
Does the iTunes model not work?
Parasites
written by Jeffrey Stewart, June 20, 2012 10:22
One problem with the music industry is that what's popular isn't necessarily what's good. Sometimes the two coincide as with the Rolling Stones, but usually and especially today, it's not the case.

There's plenty of great new music out there, e.g., The Waco Brothers, Jon Langford's Skull Orchard, Jacuzzi Boys, The Ettes, Thee Oh Sees, The Lords of Altamont, The 1990s (the band, not the decade), The Rakes, Throw Rag, The Turbo Fruits, The Briefs, King Kahn & the BBQ Show, The Insomniacs, Carbon/Silicon, The Clutters, Fucked Up (on the soundtrack of the movie,Cedar Rapids, Peelander Z, The Features, Those Darlins, Best Coast, Soft Pack, Dex Romwebber Duo and so on. You or your friends just have to invest time and money and work to find it because the capitalist music industry is most interested in exchange value (price, including profit) and completely indifferent to the use value (the music itself). Thus, the popularity of vapid, insipid, sing songy, sad sack shit, e.g., Three Doors Down and those bands mentioned by Brett above.

Music companies aren't necessary anymore. Bands can record and distribute their music themselves. People will buy it if they hear it and it's good enough. Plus the money goes directly to the band members (I don't know that they're "artists"). The days of Allen Klein screwing the Rolling Stones out of royalties and Hesh screwing over Massive G's cousin and aunt are over.
Ars gratia artis
written by jerry, June 20, 2012 11:13
How about *big shocker* people start being creative simply for the sake of creativity, and not because they're expecting to be paid. We need the return of the starving artist, or maybe the marginally attached artist. The way Hollywood and record studios work today is so formulaic and predictable, big-budget movies with absurd special effects that are insanely over-advertised. Just absolutely mind-numbing crap.

Dean has his latest book available for free, but guess what, I paid for it because I appreciate what he does. I have donated to truth-out.org, I've donated to Occupy, I've donated to wikipedia, along with many other donors I'm sure. Let people decide what they like and if they want to see more of it, they will pay for it, instead of having mass-produced garbage shoved down their throat relentlessly every commercial break.
...
written by PeonInChief, June 20, 2012 2:36
I still buy CDs, and have some old records lying 'round too, but I full well understand why young people don't pay for music. [Sound of rocking chair creaking] When I was a girl, musicians made albums with a bunch of good pieces on them. Sometimes one or two would be a little weak, but most of the stuff was worth listening to (and paying for). Today the cretins who make up most of the music industry are too busy suing college students to produce a good series of songs placed on the same CD and sold for a reasonable price. Instead they put out an overpriced CD with, maybe, three pieces worth listening to and a bunch of junk. No one will pay for that, and it's not because they are immoral. They just don't like being ripped off. [End creaking]
Creativity isn't worth what creators think it is
written by fresno dan, June 20, 2012 3:20
In the 15th century, artists of all types had patrons - it was the only method of making such a living. Even though everyone can sing, only a few were so supported. Modern technology (printing press, record players, radio) gave the fruits of their efforts, with assistance from the law, a cut of all the proceeds not only from their original effort, but all SUBSEQUENT Performances, for which the artist expended no effort whatsoever. Only because we have been indoctrinated, do we somehow think this state of affairs is normal or just. I don't pay the guy who invented the hammer a fee every time I pound a nail, and I shouldn't pay a fee for playing a recording.

Now technology has advanced even more. Anybody can write and distribute over the internet essentially for free - same for music. Newspapers are discovering that their monopoly on ads, which supported their model, has collapsed.

Anybody can write, and in general I find the comments were interesting, and often more informed, than the "professional."

Their is more sources of news and music than ever before. Its ubiquity demonstrates that it is not rare, and certainly of little value.
Buggywhip makers lost a lucrative living and I am afraid the same will happen to most musicians and authors.
No more need for the music industry
written by Larry K, June 20, 2012 3:36
Like the buggy whip industry before it, the recorded music industry has been made obsolete by the easy exchange of music files. Musicians will use recorded music to promote their real business, playing shows. And they can sell CDs or other media at these shows to their fans. Music will become a much more local industry. My music dollar is almost entirely spent watching live shows. Many musicians have been well and truly screwed by the industry, and many talented people have gone unrecognized, so it's no loss.
rock n roll- it's what i listen to
written by mel in oregon, June 20, 2012 3:40
okay, a big subject here. the reason a lot of great musicians get nowhere is they may be great slashers on the guitar, but they have no business sense on how to promote themselves. many are highschool dropouts, drug users, had horrible homelives as teenagers when they were developing their skill, & can't find other musicians that like the same stuff they do, or want to drink instead of practice. part of the reason so many people don't buy a lot of what's out today is, there are no guitar riffs by many of the bands you see on late night tv. most of the classic bands have old people in their 60s or 70s. nobody replaced them. oh, okay you have guys in their 50s who are the best in the world like batio, satch, vai & malmsteen. but there are only a few in their 20s or 30s that are really good, tom morello is great as well as very intelligent & stands for the right stuff. we need more like him.
No more need for the music industry
written by Larry K, June 20, 2012 3:42
It would make more sense if I said, "Like the buggy whip industry before it, the recorded music industry has been made obsolete by technology, in this case the easy exchange of music files." Sorry!
...
written by david, June 20, 2012 6:34
I think you're right: copyright is an antiquated form for providing incentive to produce. However copyright also can preserve the integrity/quality of the copies of a piece, it's not just an economic incentive, for the creator anyway. But creative commons licenses seem to cover that issue, which then only leaves the issue of how to eat and live well/happily while creating works (practice time, equipment, studio, etc. -- plenty of costs).

I think Dean is also right that there must be a better way, an other way, than vouchers. I can see the temptation to go with vouchers, as a near-cash substitute; but vouchers for schools seems to be an abject failure as far as I can tell, so why should it do any better for artists than for educators? On the other hand, I've not the slightest idea (yet) of what to proffer in the place of vouchers.
...
written by beeluci, June 21, 2012 12:48
This comment is sadly lacking in substance. It seems like a rote defense of existing beliefs - more characteristic in who you argue with, than you. I suggest some supporting data that this would work, or refrain from using your blog as your echo chamber.

I speak as an artist who has witnessed the collapse of the creative economy.

Write comment

(Only one link allowed per comment)

This content has been locked. You can no longer post any comments.

busy
 

CEPR.net
Support this blog, donate
Combined Federal Campaign #79613

About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

Archives