Downloading music

Did you know that if a musician gets signed with a major record label, he's basically signing himself into poverty unless he happens to hit it really big? Like Maroon5 or James Blunt big, at the very least. Prices vary depending on where you buy a CD, but let's say a regular CD is around $15.

A record company pays for the time spent in the studio to record a CD. This alone can cost hundreds of thousands of dollars. All the costs involved in creating a finished CD are recoupable. This means that the record company will take that money back from the musician out of his royalties on the CD. An average level royalty for a beginning musician is somewhere around 12%.

Now, 12% out of $15 is $1,80. So if you sell 10000 CDs, the musician gets $18000, right? Nope. When vinyl records were sold, before the CD was invented, the record labels had to count on a part of the records breaking, thereby not getting them any income. So they would calculate royalties on only 90% of the total amount of CDs, regardless of how many were actually sold. They still do. Even though CDs and mp3s don't break. There is no justification for keeping this method, but they do anyway because they make more money with it. So 10000 CDs actually only gets the musician $16200.

Record companies have also decided that while it's ok to pay royalties to the musician for each CD, they don't want to pay royalties on the packaging. So a 25% packaging deduction is taken off the price of the CD before the royalties are calculated. So out of $15, the royalties are calculated on only 75% of the price, that is $11,25. So now, for 10000 CDs sold, the musician gets only $12150 for the royalties of 90% of the sales.

If the musician doesn't produce the record himself, but has an independent producer do that instead, (or even worse, a producer from the record company) he has to pay the producer out of his royalties, generally around 25% of his royalties. So then the musician only gets a 9% royalty instead of 12%. That means $9112,5 for 10000 CDs sold.

The record companies also have a 25% deduction called the R&D deduction. This is a research and development deduction that the companies take off, because it costs them money to research and develop new technologies for publishing the music. Like when the cassette tape was invented. Or the CD, or the minidisc, blue-ray, mp3, etc. Nevermind that most record labels never spent a penny on researching or developing any of these. Anyway, what remains is now $6834,375.

So, around $6834 for 10000 CDs sold is a pretty welcome income, isn't it? Selling 10000 CDs can't be that hard, and it's a start, right? Nope. Remember that all the costs involved in creating the CD are recoupable. What if the production costs added up to $150000? That means that when 10000 CDs have been sold, the record company has already earned $132000, but the musician is still 143166 dollars in debt to the record company. The musician gets about 68 cents in royalties per CD. So he has to sell enough CDs to cover the $150000. If we use this example, he has to sell 219491 CDs before he ever gets a single penny in profit. How many musicians sell 220000 copies of their first album? Not many.

And yet, this is all a bit simplified. In reality, the musician may get way less than shown in this example. The cost of recording the CD is not the only cost. How about another $150000 for a promotional video? How about mp3s? The royalty rate is often the same, even though there is zero breakage and zero packaging. So how can the artist afford a manager and a lawyer? Pfff...

The alternative is of course to do and finance everything yourself, to do it the indie way. But man, that takes some serious money. Overall the music industry is in many ways a disgusting business, and in severe need of transformation. And who wants to pay up to $30 for a CD, as you often would in Sweden? No wonder people are filesharing like mad. The record companies get mad and claim to be losing millions of dollars and compensate by raising the record prices even more, making them even harder to sell, making people download even more.

Business has always been based on the simple principle of demand and supply. The people want something, so you sell it to them. The people want something else, so you adapt to what they want and sell that instead. The record companies seem to be kind of stuck, trying to bully everyone into buying their CDs by any means necessary, even though people don't want to. People download copyrighted stuff. That's not going to change, no matter what you do and what laws you make. And trying to bully laws into place, like the EU parliament seems to be doing with the Medina report, is just nothing short of disgusting.

The big trial against the guys from The Pirate Bay is starting on February 16th. The EU parliament has this thing called the Medina report, which is basically a long wish list from the copyright people. It is a list of things that they suggest that the EU parliament make into law, applicable in all of Europe. Check out points 30 through 33. Does anyone other than me find this a bit insane? They are basically asking the EU parliament to DECIDE that the court of law should convict the Pirate Bay guys and find them guilty! What the hell kind of justice is that? Innocent until proven otherwise, my ass...

I'm a musician myself, and of course I want to make money off my music and be able to make a living with it, but not like this. Filesharing is here to stay, so we need to find a way that lets the musicians make money off of their music through filesharing. Not by letting multi-billion dollar companies violate all reason and justice, while basically robbing the musicians and making insane amounts of profit on the very expense of the musicians.

In Sweden alone there are somewhere between 600 000 and 1,2 million people who engage in filesharing. Rather than making up one stupid law after the other to try to criminalize these people, something else needs to be done. I mean, seriously... It just doesn't make sense to try to turn over 10% of your population into criminals! What are you going to do? Put them in jail? All 1,2 million of them? Come on...

According a recent study that I read about today, done in the Netherlands, about 25% of the Dutch population downloads stuff illegally. But at the same time, those same people make up 45% of the people buying the same stuff legally. By downloading stuff you get access to a million times more stuff than you ever would if you had to buy it all first. So you find more stuff that you like, and then you go buy that.

Record companies lose millions because of file sharing? Sorry, but I honestly don't believe that for a second. What better way is there for a band to get heard? A band lives off the fact that they are known. They spend hundreds of thousands on promotion and advertizing. There are bands that have based their entire success on getting the word out over the internet. The more people hear your music, the more people are going to buy your CD, buy tickets to your tour, buy your t-shirt, etc.

But copying something that is copyrighted is illegal, according to the law. The very same law that promotes libraries, where anyone can go and borrow a book and read it for free completely legally. If I go to the library, I can read Harry Potter, and J. K. Rowling doesn't get a penny. If I download the book online and read it, I am a criminal and J.K. Rowling could file a lawsuit against me.

What exactly is the difference, I wonder? Seems very fishy to me...