May 22, 2013
Danny Goldberg on the Digital Music Revolution
Posted on Jun 26, 2009
Steve Knopper’s book “Appetite for Self-Destruction: The Spectacular Crash of the Record Industry in the Digital Age” is an entertaining, well-written attempt to chronicle the economic decline of record companies, but his thesis echoes conventional wisdom that numerous tech-friendly journalists have expressed in recent years. It is heavy on schadenfreude and ridicule of record executives and light in grappling with the major questions raised by the digital world’s damage to the economic value of all intellectual property.
The damage to record companies coincided with a convergence of the interests of venture capitalists, avaricious Internet entrepreneurs and techie philosophers and fans, who combined to create a popular philosophy that brandished the phrase “information wants to be free” like a sword of futuristic wisdom. The Internet explosion made this argument irresistibly hip to many young opinion leaders, and the enormous profits of the Internet bubble gave political power to the companies that were benefiting.
In fact, the phrase “information wants to be free” was first used in the nuanced speech of Stewart Brand at the first “Hackers’ Conference,” in 1984, in which he said: “On the one hand, information wants to be expensive because it’s so valuable. The right information in the right place just changes your life. On the other hand, information wants to be free because the cost of getting it out is lower and lower all the time, so you have these two things fighting against each other.”
In the shrill euphoria of the next two decades, the word information came to include anything that could be digitized, and the concept that there were any moral grounds to balance the ease of distribution with the cost and difficulty of creation and marketing was drowned out. Brand’s thoughtful formulation was reduced to a five-word bromide that was deployed against record company executives and musicians who sought to protect the value of intellectual property. As a guide to social policy, “information wants to be free” was, in retrospect, the ’90s equivalent of the equally seductive and equally intellectually untenable slogan “Don’t trust anyone over 30” that had a brief vogue in the 1960s.
(Disclosure: I have made my living in the music business since the late 1960s, and I ran some divisions of major labels during the ’90s before any of the controversial fights or negotiations with Internet companies, in which I played no part. I currently manage musical artists, none of whom are currently signed to major labels, but it’s not impossible that some may be in the future. Knopper interviewed me for the book, and his brief references to me are friendly and the quotes he used accurate.)
The best part of “Appetite for Self-Destruction” is a detailed history of a series of unsuccessful and sometimes laughable efforts of record companies to deal with the tectonic shift brought on by home computers and the Internet. Knopper’s argument is that more intelligent, ethical, tech-savvy record company leaders would somehow have avoided the decline of the record business, hence the term “self-destruction.” However, he betrays a bias by throwing in sensational music business dramas irrelevant to his theme, such as pages devoted to real and alleged payola, and various forms of drug abuse and thuggery that cropped up in the business over the last few decades.
Early in “Appetite for Self-Destruction,” Knopper quotes former Warner Records and EMI CEO Joe Smith as observing, “This business ain’t full of Martin Luther Kings.” It says something about the emotional power of music that anyone would expect sainthood in its executives, but in the real world the absence of “Martin Luther Kings” is notable in virtually all businesses. Internet romanticists liked to ridicule the often implausible claims of record execs that they were looking out for the artists, since these were, at times, the same companies that had been successfully sued by artists for inaccurate accounting. However, the venture capitalists were not funding business plans to advance a utopian vision. The tech companies were every bit as self-interested and just as much driven by short-term profits as the most venal record company execs. At least the record companies sometimes paid artists something.
There is no denying that the major record companies made mistakes, which leaders of other media were able to learn from and avoid (although not with demonstrably better results). There is, however, no evidence that there was any strategy, regardless of who ran the record companies or what decisions they made, that could have stopped fans, especially young fans, from legally or illegally copying or downloading music instead of buying it.
The greatest hits of record company failings are chronicled by Knopper in a series of brief interstitial chapters the author calls “Big Music’s Big Mistakes.”
Knopper implies that if record companies had been nicer to their customers, if they were run by corporate saints, then things might have worked out differently. If only they hadn’t charged so much for CDs even after the per-unit manufacturing cost went down; if only they hadn’t abandoned the commercial single when it ceased to be sufficiently profitable; if only they hadn’t cooperated with Best Buy and Wal-Mart at the expense of indie stores; if only they hadn’t sued customers for illegal downloading, etc. etc. Referring to the fact that some of Sony/BMG’s ill-fated watermarked CDs damaged some computers, Knopper writes: “This lack of empathy reinforced Napster-era beliefs that the music industry was more interested in suing and punishing its customers than catering to them.”
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