Intellectual Property Rights Don't Work! What Now?
Updated: Oct 17, 2018
I just watched this interview with Joe Walsh. At 31:05 he starts talking about the internet "eating" things. Things like copyright and intellectual property. It's an apt metaphor. I have come to the same conclusion; copyright and intellectual property rights no longer exist - at least not in any kind of functional sense.
I hear these big-time guys complaining about how piracy, the digitization of product and the internet has killed their income streams from mechanical royalties, airplay royalties, intellectual property rights and so on to the point that the only way they can make money is to hit the road and play live. And even that, Joe Walsh says here, is being affected by all the Youtube videos of him that anyone can watch for free, many of which are bootleg phone videos and suck big fat donkey balls, over which he has no control and for which he gets zero compensation. He thinks it cuts into ticket sales at his shows.
I can only imagine. But I can imagine. I can imagine because I know that I have been affected by all this as well - though my numbers are VASTLY smaller than someone like Joe Walsh.
In the late eighties I was excited about the potential inherent in the advance of recording technology along with the emergence of the internet and what that might mean for a guy like me. I was interested in being able to do an end run around the music industry status quo, which I considered to be corrupt (and corrupting) and very unfair to the artist - it's common knowledge but Joe corroborates it in this video, although he qualifies it somewhat by saying, "...but at least there was somebody to pay us."
I had a concept of what the advance in recording technology could mean; I didn't need a hundred thousand dollar advance from a record label to record an album - after which, of course, I would have to tour my ass off just to pay them back and break even; so I started accumulating recording gear. I had the concept early on.
In the mid '70's, you could buy a Teac reel-to-reel 4-track for about $3,000 (that was more than $3,000 is today, but was still within reach). That was the same machine that the Beatles had recorded Sgt Peppers on ten years before - one of my friends had one...and I had a room. Presto! Recording studio! By the mid-eighties you could get into 8-track cassette recorders for less than half that. By the mid-nineties 8-track digital recorders costing about $1200 that used video tape to store data could be ganged together to create 32 tracks or more. Shortly after that, DAWs (Digital Audio Workstations) began to appear that had 256 tracks and were less yet in
cost. I put out my first commercially released solo project, Industrial Moon, in 1991 on cassette tape, which was the dominate media at the time. I recorded it in my home studio on a 4-track recorder. Yeah, it's pretty dated-sounding; the drum tracks are especially irritating to me now - but I could see potential for what I was doing, which was ignoring the music industry as it existed at that time and doing it myself, on my own terms, without sacrificing my soul.
My studio went through all the stages as the technology evolved: multitrack reel-to-reel, multitrack cassette, 8-track digital recorders that used digital video tape for data storage (I used Tascam DA88s), DAW on a PC (I used Cakewalk), and finally by 2005 a stand-alone DAW (Roland VS-2480). I spent money on my studio instead of spending money on studio time at a commercial facility. To do the projects I was doing at the time I estimated would cost me $40,000 in studio time to do it right. I was spending way less than that on my studio and when the project was done I still had the studio! Home studios are now commonplace. The MacBook Pro on which I'm writing this blog has GarageBand preinstalled. It's just part of the package. GarageBand is more powerful than all the gear you see in the photographs above.
What I didn't foresee was that the same technology that enabled me to produce, from my home studio, a product that could compete with anything out there, was the same technology that would kill the potential of getting paid for it!
I got my first taste of this in the late nineties. I got involved with what was then a cutting-edge music website - IUMA (Internet Underground Music Archives). You could upload tracks and people could download them. World-wide distribution! For free! Sweet!
So my tracks started getting downloads - lots of them. At one point one of my tracks (the Jewel) was getting several thousand downloads a month. I was getting email from all over the world. My music was getting FM radio airplay in Russia, Italy and New Zealand. "What do I do now?" I thought. "How can I capitalize on this? Surely the website has the emails of the people who download. I could email them when my next CD is released and get sales right from the get-go!"
I called the website guy and talked to him on the phone. When I asked him if they had the emails of the downloaders he told me, "No, we don't have a mechanism in place to harvest emails and don't have any plans to create one."
I said, "So what you're telling me is I have all this exposure and no way to capitalize on it. I can't follow up with all these people who've downloaded my music. So what good is your website doing me?"
He couldn't answer that question; I think they were focused more on the consumer end of things rather than the artist. Looking back on it, maybe they were simply using the artists - the free tracks - to create traffic and then sell ads; I don't know - but I had a sour taste in my mouth. I didn't delete my page but I quit uploading stuff. Not surprisingly, IUMA didn't last too long - in their defense, they were one of the first to do what they were doing and had a piece of the puzzle in place but hadn't thought beyond that piece - and, in retrospect, neither had I.
A few years ago I discovered my old IUMA page on a website that saves and archives web sites - and has been doing it since 1996. My bio stops at 2001, the phone number is the old landline to my teaching studio, long since disconnected. The page is like a time capsule - which I assume is the function of archive.org. It's like the Alexandrian Library of the internet. My tracks are still there and as far as I can tell I have no way to delete them. Yay.
After going through several different sites all attempting to function in one way or another to market, distribute and sell music for independent artists (remember MySpace?) I settled on CD Baby. I still use them - they've done as well as anybody that I know of for functioning as a vehicle for independent artists to distribute and sell their music. And what's happened isn't their fault - it's the same thing that's happened across the board in the industry.
When I first started with CD Baby the dominant media was the CD (thus the name!). I would charge $15.00 per CD. CD Baby would take $4.00. I thought that was amazing because they were warehousing the CDs and doing the shipping and handling. If their stock was low they would send me an email requesting more copies. So I would ship batches of CDs to one place, they would warehouse them, handle the credit card transaction, ship the product to the purchaser, and send me $11.00 for every $15.00 sale. Every so often I would get checks from CD Baby for CD sales. It wasn't near enough to live on but was a nice little addition to my other income streams - mainly teaching and gigging. And I had email addresses for everyone who purchased.
Then people quit buying CDs and started buying single-song downloads. CD Baby compensated. They sent me a request-for-permission to rip my CDs and encode and distribute the songs across multiple platforms like Itunes, Spotify etc. There were dozens of platforms - each with a proprietary format - and CD Baby was doing all the legwork. I signed. A single song download would sell for 99 cents (BTW - that's about what I used to pay for a 45 rpm single in the late sixties at the local record store). Out of the 99 cents I would get anywhere from 29 to 49 cents depending on the platform. So my percentage of the sale dropped considerably.
Then people quit buying single song downloads and started streaming. Again, CD Baby compensated. But now, my income from a single stream is a fraction of a cent - like a thousandth of a cent. Take a look at this screenshot. These are Spotify streams. The column on the right is my money. Just take the first one as an example: $0.00199381. That's what I made for that single stream. A MILLION streams would make me $1,993.81. To make a million bucks I need 501,552,304 streams. That's over 501 million streams.
Notice for Channeling Harold, which is an original composition, my take is about 4/1,000s of a cent more per stream. Whoo-hoo! And for Norwegian Wood, a Beatles cover, it's the same as my original. I cain't s'plain it. See those page numbers at the bottom? They go on for days.
Whenever I get any money from CD Baby, which is now very intermittent, there are thousands of streams (not millions - I'm no Joe Walsh), and the total is, like, $39.23 - and every once in a great while that might include an odd CD sale which would be $11.00 of that. And like IUMA, I have no access to information like, WHO is streaming my music?
The whole thing is going backwards. Like Joe Walsh says, "No one can afford to write and record music anymore." My recording studio is packed up in boxes sitting in storage. I'm using the room for more profitable activities. Like teaching personal students and producing teaching videos for MasterGuitarSchool.com. All that recording gear is mostly obsolete anyway. 2006 was the last project involving my recording studio. I still haven't recouped the manufacturing costs on that CD (My Ship), never-mind what I spent on my studio over the years.
Take my experience and multiply it by tens of millions of dollars and that is what guys like Joe Walsh are dealing with.
There have been attempts to fight back. From Business Insider: Pharrell Made Only $2,700 in Songwriter Royalties From 43 Million Plays on Pandora):
"Given how little he's making, it comes as no surprise that Pharrell is among a group of artists demanding that YouTube take down thousands of songs it doesn't have permission to share. If YouTube doesn't remove the 20,000 songs, a legal group called Global Music Rights — which represents artists including Pharrell, the Eagles, John Lennon, and Smokey Robinson — says it will bring a $1 billion lawsuit against Google, YouTube's parent company."
"Taylor Swift recently spoke out about how little artists make from streaming, claiming that services like Spotify don't value her art. Swift pulled her entire catalog from Spotify in protest."
All this was in 2014 - I don't know what came of it. Probably nothing. Because, in my opinion, the genie is out of the bottle and these kinds of reactionary machinations within the existing business and legal framework are futile attempts to put it back.
I think Prince had a better idea back in 2009 with the concept of cutting loose from the existing music business infrastructure and self-distributing everything from his own website. Apparently, he failed to follow through with it.
Joe Walsh doesn't have any answers, he says so, straight up. In another interview he says it's up to the young musicians to try and figure it out.
Well, I'm not so young - Joe is only a few years older than me - and I don't have it figured out either, but I have some thoughts about something to do; at least from where I stand:
First of all, you must start from this premise;
There is no copyright!
There is no such thing as intellectual property!
There is no potential for royalties or residual income!
It's all gone!
The above is somewhat overstated but only by a little. It is more significant and harder to accept for an old guy who has been successful at playing the game for the last 40 or 50 years and watching it all go down the drain than it is for a 25-year-old tooling around in a tour bus and not that invested in the traditional music biz.
To construct and implement some kind of strategy that does not take into account the FACT that intellectual property rights are gone is being in denial. It is doomed to failure because it's based on a false premise - that copyright laws and intellectual property rights are still relevant. Dude! The copyright laws were written in 1936!
Mechanicals (royalties based on sales of physical products like CDs) are not relevant because the product isn't physical anymore. It's digital. You can't track or quantify the manufacturing because anybody and everybody can copy it with a mouse-click. It gets "manufactured" in locations all over the world every time somebody copies or shares it.
Same goes for the laws regarding airplay - what's called, "Performance Royalties." The laws concerning "performances" were written with radio airplay in mind. Trying to apply them to streams, Youtube plays and the like hasn't worked out very well. The internet is too hard to monitor or control - and that's not necessarily a bad thing in my opinion (there is opportunity in chaos!) - but it's an exercise in futility if you try to apply laws written in 1936 to it. Which is what the music industry in general has tried to do. When Congress tries to pass a new law that deals with the issue, by the time the law has been written, passed and enforcement mechanisms put in place, the technology has already evolved beyond it. The technology is evolving faster than what the law can keep up with.
In addition to all that, these days, YouTube, Spotify, Itunes and the like are negotiating proprietary deals with labels, artists and publishing companies and side-stepping performance rights organizations like BMI and ASCAP. And it's those performance rights organizations that have been the infrastructure for the last 100 years for collecting and disbursing performance royalties to publishers and songwriters. That is a large part of why residual-based income streams are drying up for people like Joe Walsh. His royalties from ASCAP are derived from radio airplay, not streams and Youtube plays. And who listens to the radio anymore?
In a previous blog I talked about how I dealt with the issue of piracy in relation to my method books. Bottom line: it's impossible.
I became aware that piracy was an issue fairly early on. Within a year of publication (1999), I found out that someone in Singapore was printing copies of Vertical Truth and selling them. I found out because a guitar player from Singapore who had purchased one of these bootleg copies emailed me with a question. I came to the conclusion there was nothing I could do but consider it free advertising. From then on, every copy of the book contained my name and website address on every page!
With digital product it's even worse. Once the file is on the person's hard drive they can copy it, share it - anything they want with the click of a mouse - and there's not a thing I can do about it. Whatever the file may be - an e-book, a song, a video - once the customer has it I've lost control. (Streaming has different issues; I'm talking here about digital files and downloads.)
So...let's start with the premise that the money HAS to be made upfront somehow; residuals are not part of the picture.
In the aforementioned blog, I told the story of discovering Jeff Walker's Product Launch Formula and how I've applied it to my teaching business. The main concept is that you have a "tribe" of followers that you market to - in the old days we called them, "Fans". You sell whatever it is you're selling to your followers EXCLUSIVELY in a very short, intense time-frame - say, 5 days - called a launch period. At the end of the launch period the product becomes unavailable or the price goes up radically - anything that makes the launch period a VERY compelling time to buy. In marketing lingo it's called the "scarcity trigger."
The way I'm doing it, once the launch is over, the product goes up on the website, available to the public but at a greatly increased price - sometimes more than 200% of the launch price. Once it goes public, I'm no longer concerned with it - I'm on to the next thing. I make all the money in that 5-day launch period. I'll get an organic sale here and there from the website but I don't care about that - my focus is on nurturing and growing my list - my tribe - and then selling product to THOSE people at a price and with benefits that incentivizes new people to sign up. Incentives include things like free bonus products that go with each sale, access to free lessons, personal Skype/FaceTime consults, a consistent monthly newsletter that includes a never-before-published free lesson, etc.
All these things illustrate that being a MasterGuitarSchool.com site member is more than getting a free lesson now and then, or learning this or that song. There's a life-style element to it. Learning the guitar is a journey that is incorporated into one's life, to greater or lesser degree, depending on the person. It's therapeutic. It's fun. It's sexy. It's spiritual. It's the pursuit of happiness and the satisfaction of mastering the instrument to the point at which you can express yourself with it - truly.
I am sincere about my motivation and love of helping my students, site members and customers progress on the guitar. The guitar (learning, playing, performing, teaching, writing, recording - anything having to do with the guitar) is a calling for me, a magnificent obsession - not just a way to make money. If getting rich was my motivation I would have gone into something else a long time ago.
Anyway, back to business; this business model presupposes that I can continuously produce new product or content. It doesn't work to sell the same thing to the same people over and over. There is potential to re-launch old products because maybe the list has grown 1,000% since a particular product was last promoted, or I can sell my product to someone else's list in a joint venture (sometimes called an Affiliate Launch) and split the money - there ARE ways to get more mileage out of a single product, but my basic approach is contingent on me continuously creating and launching new products to my own list of subscribers and leading them through a process of increased understanding of music and being able to play the guitar.
This I can do! I have more content from which I can create product than I have years left, probably. I've been teaching guitar for almost 40 years. I have an approach to learning the guitar that works (read that history here). The idea is to do maybe 3 major launches a year that, in-and-of-themselves, bring in a decent living. In doing this, I am dealing with the guitar every day, which I love, and helping people add value to their lives by teaching guitar and music, which I also love. And I will continue to teach privately, and gig as much as I want to, because I love that too.
All my activity along these lines has been relative to my teaching activities and products. I'm just now beginning to think about how to incorporate my recordings and original music into this paradigm. For instance, the theme song you hear at the beginning and end of my teaching videos is called Into the Great Black Dark and is from my Sound Tracks CD. I have tons of original music, I have thousands of CDs sitting in my basement. Much of my music is already digitized. I have chord charts, lyric sheets - already online - all kinds of stuff that could easily be packaged, promoted and monetized. I'm looking at what it would take to sell this stuff as downloads and streams from my own website - do it all myself (I've been flagged for copyright violation by YouTube for using my own song in a teaching video!). I'm asking myself, "How can I integrate all this other stuff with what I am already doing successfully with the teaching activities? How can I leverage what I've learned from selling guitar lesson downloads and apply it to my music?" Whatever I wind up doing, it will be based on the presupposition that intellectual property rights are kaput.
In this model, the same internet that ate the old way of doing things is the vehicle for the new way of doing things. The sale, distribution of product, and money into the bank account happen instantaneously in cyber-land but the product, the learning process for the customer and the value inculcated into people's lives is real, and the money in the bank account is spendable.
So the money is made up front, and no residual income is expected. Yes, everything is copyrighted, published, registered and so on. I own the copyrights and the publishing to all my stuff, I'm a registered BMI publisher and songwriter blah, blah, blah, but I don't think all that means diddly-squat anymore.
Just ask Joe Walsh.
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