My good friends at Future of Music Coalition (FMC) launched a major campaign today for net neutrality. Called “Rock the Net” (a name whose lameness caused some modest embarsement at the begining of the call, but sometimes you gotta grab that cliche by the horns so you can trample the wolves while swimming from the sharks), the campaign brings together major music groups to raise awareness of the net neutrality issue and press for network neutrality legislation (such as the Dorgan-Snowe bill pending in the Senate).
Why do musicians care about network neutrality? And who are Future of Music anyway? See below….
Most folks outside media policy land may not have heard of FMC, but they have been very effective on a number of fronts going back to their founding in 2002. FMC began when Jenny Toomey, an indie rocker and therefore also definitionally an entrepreneur, got frutstrated with the fact that in policy land the people speaking for the musicians were the major labels like the RIAA. This is a lot like saying that wolves speak for sheep because wolves have an interest in maintaining healthy, accessible herds and in keeping other predators away. So Jenny started FMC to create a place in DC that allows artists to speak directly to policy people.
FMC provided major early evidence on how radio consolidation was killing local music and making radio suck by standardizing playlists. They provided a thorough, detailed study with academic rigor that could not be brushed off as just “emoting” or that no problem existed. They helped raise the profile of low-power FM and really pushed to make payolla an issue rather than something accepted as the way big companies do business.
All these issues have a common theme, they reduce the music industry to big companies negotiating with each other and excluding independents. Network neutrality presents the same problem. Leaving aside that one of the major cable providers is also one of the major labels (Time Warner), network neutrality actually benefits the major labors against the independents. Major labels understand that it is worth paying extra money to create a system with choke points that would drive the cost of music on the internet beyond what independent competitors can afford. So while major labels would have to pay more on a non-neutral net, it would allow them to beat back competition and allow them to maintain their absolute control over the lives and revenues of performers. As a matter of old fashioned economic incentives, paying a few extra bucks per song to mainatin market dominance is well worth it.
For those who think I’m blowing smoke, allow me to share one of the very interesting facts that came out during the press call (yes, I exploited the awesome power of blogger credentials to get press access, my thanks to the tens of regular readers out there that make this possible). By now, everyone who follows the industry has heard about death of music albums and the general decline in profitability of the music industry.
Turns out, not so much. Rather, as I have argued along with the good folks at Ars Technica, what we are actually seeing is the positive effects of competition. Music lovers, no longer herded by major labors toward pre-selected “superstars” and no longer required to buy an entire overpriced CD to get the one song they want, have embraced independents and legal downloads enthusiasticly — which has prompted more independents to use the internet to sell CDs and music downloads, eating into the monopoly profits of the music cartels. (Note to all you techno-libertarians and neo-cons who think I’m an evil socialist reactionary, I like competitive markets. I just don’t worship them, or confuse “unregulated” with “competitive”).
Hence my happiness and joy when Derek Sivers, the founder of CD Baby (which sells CDs of independent musicians online) confirmed all this in the press conference
this morning launching the “Rock the Net” campaign (I hope FMC puts up an audio or transcript). According to Sivers, CD sales for independents are up 30% this year over last, and continue to rise. The availability of legal downloads of indpendent tracks, for which independent artists receive monetary compensation, likewise continues to rise. Leo added that of the approximately 4.5 million tracks available on iTunes, 1.5 million are from independent artists. (For anyone who wonders why Tower Records and other stores that focus almost exclusively on major labels keep going belly up, might I suggest it’s because they are not giving customers what they want?)
Explaining why we never hear about this amazing growth sector of a supposedly dieing industry, Sivers said:
“Major labels are like a $100 stock that has dropped to $90, and that’s oh so newsworthy. But independent labels are like a $1 stock that has risen to $5. But it’s still not considered newsworthy so no one knows about it.”
So a neutral internet has allowed independents to grow and take business away from the dominant mega-corps with a crappier product. Small wonder that independent musicians have woken up to the need to fight for net neutrality and mobilize their fans to action. And small wonder that the major labels would rather pay payolla equivalents for “premium tier” transit rather than compete.
Will the incumbents have to face the competition music because of network neutrality? Or will this once again prove to be the same old song of competition crushed by special interests and an indifferent public? Don’t ask who decides if we won’t get fooled again. It’s up to us. And I’m glad to FMC and their indie musician members singing along as it comes around on the guitar.
Stay tuned . . .
Awesome summary of the salient issues as always, Harold!
“You can get anything you want . . . ”
Tim Lee over at TechLiberation.com makes a great point in his post about net neutrality and independent artists. Tim says, “But let’s say I’m wrong about all that and a dystopian future does materialize in which the Internet is limited to the websites of a handful of deep-pocketed corporations. Then independent artists are screwed, right? Well, not really. How do artists reach fans now? A lot of them use sites like MySpace, Blogger, and YouTube. Sites, in other words, run by large corporations with deep pockets. Even in the exceedingly unlikely event that the Internet is somehow closed off to all but the largest corporations, it’s likely that Google and News Corp. will pay what’s necessary to ensure that their own properties continue to function.”
You can read Tim’s entire post here: http://www.techliberation.c…
And when you’re done, check out my coalition’s website at http://www.handsoff.org.
This last looks suspiciously like spam sent by hands off to pull in traffic. I think it just looks for key words like “net neutrality.” It doesn’t seem to have anything to do with the substance of the post beyond the NN link.
Harold, in your post you ask, “Why do musicians care about network neutrality?” and the TechLiberation post to which I link is titled “Why Musicians should Focus on Music and Leave the Lobbying to Others.” Maybe I’m missing something, but I think the two post are very closely related, though the two obviously reach differing conclusions, with Lee finally asserting, “So to buy the artists’ fears, you not only have to believe that the telcos will succeed in radically transforming the Internet at the logical layer, but you also have to believe that they’ll be able to twist the arms of companies like Google that control the content layer into changing their sites to lock out local artists. Not only does it seem exceedingly unlikely that they’d be able to do that, but it’s not even clear why they’d want to. If News Corp is paying the appropriate bribe to give MySpace preferential access, why would Verizon care what kind of content MySpace is making available?”
Ah. Critical information missing from the previous comment and I am highly reluctant to click through to links that don’t look terribly relevant. So yes, it is relevant, but next time please provide better description.
As for substance of TechLiberation post, will provide only short reply now. Musicians logically worry about companies increasing the cost of distributing their music. This is a rational fear. It has nothing to do with Google or any other company.
As discussed in my primary post, the economics is this: indies compete against big labels on the internet on equal terms, and are therefore doing quite well. That’s because the ability to control the user experience is limited. Big labels can do more advertising, they can buy placement for keyword searches, and other advantages in attracting attention. But someone who looks for an indie or discovers an indie can enjoy that music in the same fashion as they can big label music.
If broadband ISPs can provide “premium” streaming for those willing to pay, the indie music is once again disadvantged — and in a far more serious way than by lack of advertising budget. Indies logically fear that. Therefore they fight it.
So once again, the effort to turn this into a food fight between big companies is irrelevant to the actual economic argument. Tiering disadvantages indies vs. big labels. Net neutrality permits them to compete on equal terms. That’s why they care.