indie-labels-survive-piracy

Indie labels tend to support small, unknown bands, which sometimes have interesting sounds that develop into awesome shows with an enormous fan base. One could say that, if piracy were to kill indie labels, those small bands would never get noticed in the first place and the world would lose some valuable sounds.

I tend to disagree with this assumption. And here’s why.

Music Labels and the Internet

As far as Indie labels go, the impact of this “piracy” thing on their business would be substantial IF they were merely copying the same model used by big media. And trusting the big labels’ judgement on this whole issue. But we’ll get to that later.

The advantage of these smaller labels, as I see it, is that they have small production costs (a few thousand dollars tops vs hundreds of thousands used by big labels). With costs out of the way, a label can then go on to make some wiser decisions.
They can either produce a ton of advertising and an enormous batch of costly CDs and just hope that they get some revenue back… or embrace the digital and the way people naturally tend to enjoy and share music:

  • offer the albums at very low prices, on streaming/download services with no DRM,
  • OR offer the records free of charge, with an option to donate;
  • make limited edition CDs and vinyls for your big fans.
  • Youtube is another good option to make yourself heard and get some money back, as well!
vodo-pay-what-you-want
Screenshot from VODO – Farout Bundle

Or why not fire up a BUNDLE with your biggest bands and offer it for cheap, with nice incentives to pay a bit more for new singles, similar bands, or posters and tickets? This is by far the most reasonable option that I’ve seen work in the past. You can have a site similar to VODO up and running in no time.

Music Labels and Piracy

Sometimes labels are a big help for an up-and-coming band. They get in touch with distributors, do the PR, get the best deals and designs for the album, work up some hype, get you on shows, and so on. If the band doesn’t want to waste the time or the effort to do all these things themselves, that’s a really big plus there. Still, that doesn’t make the labels more important than the band itself. We all understand the benefits of curators, but one should always remember that curators can’t exist without works.

Copyright-protect-you-pirates
Advertisement for copyright and patent preparation services from 1906.

Piracy is a term that describes copyrighted material being copied without the owner’s permission. So, let’s take a look at how this copyright thing works.

Copyright

Most of the time when artists sign a deal with a label, copyright is signed over to the label, as well. That means the label has exclusive rights over every copy of the album. The label then gets a percentage from every play on Spotify, Deezer, iTunes, royalties, and, of course, CDs. The bands, on the other hand, have to mainly rely on concerts and other gigs to make money, so piracy actually helps them get noticed – as they usually don’t get any revenue from copyright anyway.

At this point in the debate, some people argue that things could be a lot different if bands were allowed to keep their copyright and make a living out of that. But as a public survey has shown, musicians only make a small percent of their revenue from sound recordings. This might sound surprising, but copyright is actually one of the least important sources of revenue for ALL music artists! Over-protecting their work isn’t doing them any REAL good.

Now, here’s the catch:

Only a very small number of bands actually have the power to negotiate a contract for a percentage of copyright and all related revenue. But who gets to keep that?

prince-piracy-sue-fans
Prince Rogers Nelson. Author unknown.

The 1-5%  of artists, who have already gotten rich from being internationally renowned.

And what happens when bands get their hands on that revenue? They sue the hell out of a software developer, like Metallica did a while ago. Or even their own fans, like Prince here. That tends to happen over and over.

 

And that’s not about music anymore.
They just turn into their labels. They turn unethical.

Now, if I may, copyright was put in place at a time when production and distribution costs were very high. Printers argued that writers will always need them do distribute their works. Copyright was primarily designed to help the printer’s business model, not the writers who got paid a fixed sum of money anyway.

Music Labels and Business

Artists, as well as labels, may get affected by piracy, but the impact is almost unnoticeably small. Some studies even argue that copyright negatively affects businesses.

Still, one then has to wonder… WHY ON EARTH do more and more bands put their albums up online for free? Some of them let you stream them, some even let you download them. But none of them hide behind pay-walls. If piracy and downloading did have a big impact on sales, like they say, none of these bands would have ever put their albums up online, right?

So maybe these bands and their labels understand something that we’re completely missing. Something that would go along the lines of this: “exposing as many people as possible to music – all music – is a good thing.

Piracy vs Business

One illegal download does not equal one less album sold, right? Besides, as I’ve stated above, if that were true, no label or band would have ever uploaded their songs online in the first place.
So having said that, let’s turn a bit away from this “piracy is very bad” narrative and focus more on the dynamics of people who download illegal music files.

digital-merhandise-music-sales-piracy-boost
File-sharers more likely to buy digital music and merchandise.

Independent studies show that the people who pirate your music are the same people who listen to more music and go to more concerts. Music sharers are four times more likely to pay for music downloads and streams. They’re more likely to come to your concert, and three times more likely to buy a t-shirt, recommend you to your friend or be the first to buy your new album. They’re some of your biggest fans!

People who are into music more, will likely “use of all available channels, both legal and illegal” to get to good music. But let’s not forget that pirate copies are one of the likely reasons fans heard about you in the first place. It’s important not to alienate your clients. They had a chance to get exposed to your music. And you gave them a good reason to buy.

Sure, some file-sharers will never pay for your music. But keep in mind that those people would have likely never paid for it anyway. Either because it’s too expensive for them, or because they’re not used to paying for music, or simply because they don’t like it that much. Still, your music got to them and they might recommend it to someone who WILL buy something later.

So it’s safe to say that, in a certain way, piracy DOES pay!

The double-twist:

internet_meme_online_piracy_nazi_regime
Internet piracy meme. Author unknown.

OK, then why would someone go through all this trouble to criminalize piracy, confiscate Winnie the Pooh laptops or even send people to jail, if piracy isn’t actually affecting any sales?

Because criminalizing piracy DOES pay the big labels a lot of money. Ever wondered why they never go after the original uploaders and resume themselves to chasing the small fry?

Well, it’s actually not that difficult to understand. You know, it really gets you through the day when you can sue and ask for $20,000 for a single “pirated” song, versus the $0.99 or less that you get from iTunes, am I right?

Piracy pays 20.000 times better than actually selling music! Think about it. You could make a crappy song, upload it yourself onto a pirate site, and get 20.000 bucks in no time! The law, as we know, is always on the side of the rightsholder.

The future of labels

Sure, the big record labels of the moment aren’t all that big and nasty and hell-bent on swallowing everyone in their path. And, truth be told, most of us would probably do the same stuff they do, if we were in their shoes.

Perhaps even more importantly, I do know that there are A LOT of indie labels out there, just like there are A LOT of publishing houses, that really DO look after the author, nurture the artist, and take care of them. Some of them are really transparent and genuinely committed to spreading music worldwide. They deserve to make a buck from their work as much as anyone.

labels-adapt-or-die
Adapt or die – graffiti in Poznan

Still, digital property is no longer of value. This value has gone down to zero, since one now has access to a nearly limitless supply of it. People nowadays don’t treasure digital files the way they once did. And maybe this has caused sales to go down. But, see, if you’re in a line of business that no-one needs any longer, of course you’re going to complain. I’m sure Sweden’s ice distributors facing total replacement by electric refrigerators were pissed as hell!

New technologies will ALWAYS change older ones and maybe even make some of them obsolete.

Labels first need to understand how and why people share music.

Most people who download illegal music don’t do it out of spite or hatred towards the band or the label. A lot of them actually go to concerts and are happy to pay for physical things. What is true is that piracy isn’t doing much toward encouraging people to directly support their favorite bands; I hope this will change in the near future. We’re already starting to see a shift towards a more effective voluntary donation system, through crowdfunding, or services like Flattr.

And it’s up to the labels and bands to find better, more suitable ways to make a living in this digital friendly environment.

Bottom line

Copyright is not relevant to the way in which people enjoy and share music nowadays, and this piracy talk will likely get you nowhere in the long run. Copyright is actually more about imposing restrictions online than anything else. But millions of creators have already given up on their copyright, in favor of adopting a Creative Commons license. That shows a lot about what restrictions people need to create new music. Basically, none at all!

Bands will still make music, with or without the help of labels. Sure, maybe they’ll be less known and maybe they’ll have a little less money. But they’ll still be singing their lungs out and have a great time doing it. And, for the time being, some of them are even better off without their labels. Some have even managed to get a lot more fans and money this way! Check out Amanda Palmer, The Bianca Story or Bigtree Bonsai, just to name a few. It’s the labels who are likely to end up broke, if they don’t try something different.

Can indie labels survive piracy? I don’t think it’s a matter of surviving. It’s more about adapting. And I’m sure that good, honest labels will know how to do that, without getting caught up in all this nonsense about piracy.

Cover image: a derivative of Poison Andrew Kuznetsov/CC-BY
Article edited by: Ioana Pelehatăi