There’s a new Business Week article getting some attention in the radio and media press today which makes the dubious argument that legal, licensed online music services like Pandora and Last.fm do not enhance, but rather “substitute for,” music sales. However, the author offers no credible evidence for what he supposes, and offers no rebuttal to the baseless claims made by the record industry.
In the article “The Music Industry’s New Internet Problem,” columnist Douglas MacMillan parrots the cry of record labels, namely, that since consumers can listen to music online for free, they’re buying less of it.
It’s an idea echoing the complaints of entrenched industries that’s as old as recorded media itself. Recorded music on the radio was supposed to kill both live music and record sales; cassettes and digital audio tape were also supposed to destroy record sales, television was to decimate both radio and Hollywood — and what was left of the movie industry would surely fall victim to cable television, the VCR, and the DVD. The record industry unearthed the argument as a driving force behind the passage of the Digital Millennium Copyright Act. “Of course we should squeeze digital music services like Internet radio for high royalties and restrict their programming,” lobbyists convinced sympathetic lawmakers. “If people can listen to free music online, who’ll buy it?“
MacMillan opens the article with an anecdotal example of a young, NY-based music fan who says he no longer spends $100 a month on music, because he listens to iMeem and Last.fm. He equates legal, licensed online music services with illegal file-sharing. Getting to the crux of his argument, he cites no documented independent studies and names no third-party experts; only “researchers and industry consultants” (really? which industry?) who “say online music sites are being used by a growing number of listeners as a substitute for purchasing music, rather than serving as a catalyst for more purchases.” He does get a quote from National Music Publisher Association lawyer Jay Rosenthal (who debated RAIN publisher Kurt Hanson in a five-day “Dust Up” in the Los Angeles Times here). Not surprisingly, Rosenthal heartily agrees; like the author, apparently at a loss for any other industry or economic trend that could account for diminishing record sales.
This tragedy ends with a bit of (unintentional) comic relief: MacMillan revisits the guy in New York who doesn’t buy music anymore, to find him buying music, made by an artist he heard online. How does the author make sense of this illogical behavior? “It’s the charity that even the most freeloading fans feel toward music that they’re passionate about,” he concludes.
Bottom line: Legal, licensed online music services, like Internet radio, are one of the few positive developments of the last decade for the record industry. These services actually help the artists and labels connect music-purchasing fans with music. The RIAA argument (and MacMillan’s) is fallacy.
In the article “The Music Industry’s New Internet Problem,” columnist Douglas MacMillan parrots the cry of record labels, namely, that since consumers can listen to music online for free, they’re buying less of it.
It’s an idea echoing the complaints of entrenched industries that’s as old as recorded media itself. Recorded music on the radio was supposed to kill both live music and record sales; cassettes and digital audio tape were also supposed to destroy record sales, television was to decimate both radio and Hollywood — and what was left of the movie industry would surely fall victim to cable television, the VCR, and the DVD. The record industry unearthed the argument as a driving force behind the passage of the Digital Millennium Copyright Act. “Of course we should squeeze digital music services like Internet radio for high royalties and restrict their programming,” lobbyists convinced sympathetic lawmakers. “If people can listen to free music online, who’ll buy it?“
MacMillan opens the article with an anecdotal example of a young, NY-based music fan who says he no longer spends $100 a month on music, because he listens to iMeem and Last.fm. He equates legal, licensed online music services with illegal file-sharing. Getting to the crux of his argument, he cites no documented independent studies and names no third-party experts; only “researchers and industry consultants” (really? which industry?) who “say online music sites are being used by a growing number of listeners as a substitute for purchasing music, rather than serving as a catalyst for more purchases.” He does get a quote from National Music Publisher Association lawyer Jay Rosenthal (who debated RAIN publisher Kurt Hanson in a five-day “Dust Up” in the Los Angeles Times here). Not surprisingly, Rosenthal heartily agrees; like the author, apparently at a loss for any other industry or economic trend that could account for diminishing record sales.
This tragedy ends with a bit of (unintentional) comic relief: MacMillan revisits the guy in New York who doesn’t buy music anymore, to find him buying music, made by an artist he heard online. How does the author make sense of this illogical behavior? “It’s the charity that even the most freeloading fans feel toward music that they’re passionate about,” he concludes.
Bottom line: Legal, licensed online music services, like Internet radio, are one of the few positive developments of the last decade for the record industry. These services actually help the artists and labels connect music-purchasing fans with music. The RIAA argument (and MacMillan’s) is fallacy.
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