May 24, 2013
Danny Goldberg on the Digital Music Revolution
Posted on Jun 26, 2009
As someone who has made a living in the music business, it’s been hard for me not to be slightly amused by the outcry of newspaper writers and others who are anguished that the Internet has debased the concept of the value of content. I do not recall any Senate hearings lamenting the decline of record companies when it first became clear that they were being devastated by the same technological wave that was undermining the profitability of newspapers. I agree with most proposals to save journalism, including tax deductibility for trusts that publish, reasonable charges for content and moral suasion of consumers and elites. But I can’t help but wonder where they all were a few years ago when the record companies were slipping into decline.
It now appears that the record business, widely depicted at the time as being run by an anomalous group of greedy idiots, was more like the proverbial canary in the coal mine with regard to intellectual property and the Internet. Now that newspapers, magazines and movies are experiencing an erosion of value and the attendant job losses due to the increasing number of consumers who expect to get information and entertainment free, more people are considering whether the temporary huge profits of the Internet bubble may have had some adverse social consequences.
Newspaper and magazine publishers, perhaps influenced by the adverse publicity generated by record company battles, mostly acquiesced to the Internet theory that content should be free. They did not sue any readers; they did not develop elaborate encryption; they did not have spokespeople who argued with Internet providers or tech philosophers, and their Web-friendly behavior was no more effective than the confrontational posture the record companies had adopted. Publishers watched their assets decline just as precipitously as those of record companies, if not more. The theory that increased traffic generated by free content would create enough ancillary advertising revenue or promotional value has not proved to be true.
Frank Rich recently wrote in The New York Times, “With all due respect to show business, it’s only journalism that’s essential to a functioning democracy,” and I suppose he is right. But it’s a little like an argument about whether a human being would be better off without arms or without legs. Healthy societies need art, entertainment and journalism, and all these areas are affected by the technological revolution of recent years.
To the extent that there are solutions, they involve a post-’90s paradigm shift on the part of people and governments around the world in their view of all forms of intellectual property. Rich correctly points out that a lot depends on how much of the public is willing to pay for journalism. Commercial television was advertiser-supported and free to the public for decades until cable came along. Now most TV viewers pay a monthly fee for cable to get better reception and “free” channels like CNN. Millions pay additional fees for movie channels like HBO. But the development of subscription TV did not occur without help from the government, which offered local monopolies and other forms of support to cable companies.
One key step is a public and political recognition of the value of intellectual property. The out-of-context idea that “information wants to be free” has been destructive. Information doesn’t want to be free any more than land or food does. As individuals, we would like everything of value to be free, but as a society we have learned that nothing much gets produced if payment is based solely on philanthropy.
I don’t pretend to know the solution, but, as in many other areas of social policy, the United States can learn a lot from other countries. The governments of Canada, Sweden, Australia and many other nations subsidize portions of their music industries on the theory that music is good for society as a whole. There are proposals in Europe that would charge Internet service providers a fee for access to music. Undoubtedly there will be many other ideas that will emerge. One thing I am sure of—the answer is not a socioeconomic system in which the only money made from information goes to the makers of the machines that deliver it.
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