By at 8:21 AM Wednesday, May 7th 2008


Hacking The Record Industry

The Truth


For years, a heated discussion raged on about the atrocities of ruthless internet pirates and the crippling impact their cruelties had on the music business, the artists, the record stores, and even the music itself.

Finally, that ridiculous discussion is being put to rest, as more and more artists and music listeners are educating themselves beyond label rhetoric, and challenging antiquated business models and distribution paradigms.


In 5 years, iTunes has become the #1 music retailer in the US. Why? Many reasons have been cited: It’s so easy to use. It’s cheaper. People want hits, not albums.

I have never had any qualms with downloading an album illegally- I’m way too hardcore of a music addict- and I can do it as effortlessly as the next guy, even if the next guy is a hacker geek who can name 5 release groups and can whip up a torrent like the rest of us can download one. But I use the shit out of iTunes. Looking at my “purchased” playlist, I’ve got 841 items, with a couple EPs in my shopping cart. Some tracks were free downloads, some were gifts… But some are videos that are $2, and I always prefer the premium iTunes Plus versions @ $1.29 or whatever so there’s surely a bit of that. But basically I’m looking at $800 or $900 over the past 5 years for music I could have stolen without consequence. And how did I get started? Do I just love Apple that much? No. I love my iPod? No, I couldn’t even afford one until a couple of years ago. Actually, I scored a song download credit in a Pepsi bottle cap. The first hit is always free, they say.

Why do I continue to use it? It’s convenient. It’s always available; I never have to worry about the RIAA shutting it down and suing me like I do whenever I get attached to a decent torrent site. Also, it has some stuff I can’t find anywhere else; exclusive live sessions and such. And the last reason, which is the same reason I begrudgingly overpay for the iPhone (I’m on my third), is that it integrates perfectly into every single device I own that I could ever hope to be so capable.

Does iTunes have any faults? Of course. But luckily, some artists are attempting something the labels only dream of: Being one step ahead of Apple. Radiohead let users name their own price with their latest album In Rainbows, and Trent Reznor followed suit more or less when he released Saul Williams’ new one. The success of those two attempts were less than ideal, but then Reznor tried a different formula and made a groundbreaking $1.6 million releasing the instrumental album Ghosts I-IV in a multitude of different formats through his website. You could download part of it for free, all of it for an easy $5, or you could go all out and get an ultra super deluxe limited blowjob and autograph edition for $300- which sold out instantly. And the album wasn’t even really all that amazing. 36 short untitled instrumental tracks. I’m a pretty big NIN fan, and I struggled to get through its entirety one (and only one) time.

Another issue lies in availability. As soon as an album hits the CD pressing plant, or a promo version goes out to a media outlet for review, someone gets their hands on it, rips it to MP3, and throws it up on the internet for everyone to download and talk about while the label starts up the hype machine to try and get those first week sales. This means that if I’m waiting for the new Kanye West album to come out, torrent sites and P2P programs get a huge head-start over iTunes and retail outlets. I bet if you could pay twice as much to get the album a week sooner than the torrent sites, plenty of people would throw down.

But The Raconteurs had a better idea: Release now, promote later. Fuck first week sales- they did what online media companies have been doing for years now: they looked at the so-called Long Tail. They put out Consolers Of The Lonely (a great record by the way) the instant it was finished, and it was available everywhere.

Then, this past Sunday, Trent Reznor updated his formula again and released the new Nine Inch Nails album The Slip out of virtually nowhere, with only the vaguest of prior warnings; he had simply announced a date, and leaked a couple of new songs on his website. We’ll see how it goes… I expect Trent to release the numbers as he did with Ghosts. Unlike Consolers Of The Lonely, Trent managed to keep a lid on any pre-surprise leakage.

Though he’s one of the most forward thinking “older dudes” in the music industry that I’ve come across, I don’t always agree with everything Bob Lefsetz says. He thinks artists should release music in smaller, more frequent, digestible bursts. I disagree with that. But he gets a lot of things right, including this point he made the other day: “They say today’s kids have a short attention span? Utter bullshit. Ever watch them play the same video game for twelve hours straight? They’ve just got an unbelievable SHIT DETECTOR!  They only want what’s good.”

I’ve heard so many marketing people complain about how hard it is to sell stuff to kids who have increasingly short attention spans. Yeah, it’s a tough break being in marketing. The kids have gotten wise to all the silly little tricks you’ve been pulling for years, and now they don’t trust you any more. Now they’d rather wait for their friends to tell them what’s cool, because those friends have no reason to bullshit anyone like you do. And their friends know better than you do anyway, because you’re old.

It’s not your fault. All the marketing in the world won’t get kids to buy a product if the product sucks. But don’t blame it on dwindling attention spans.

If the quality is there, then what it comes down to is accessibility. What’s most important besides quality? Price? Packaging? No! Convenience. Some people want the song, some people want the album (even though some of those people will never listen to the whole thing). But everyone wants it now, and everyone wants it easy. And of course everyone would prefer to depend on just one place that has everything under the sun, rather than scour boutique torrent sites or larger, but still limited, supermarkets like iTunes, Amazon, and Rhapsody. I’d make a Wal-Mart analogy, but it might not make much sense in this context.

I stole In Rainbows. I heard the announcement when it dropped, and I went to Radiohead’s website. I was assaulted by strangeness; Radiohead decided to make the fans dig a little, peeling off the online equivalent of packaging. But I had no time for that. After two clicks that didn’t produce a download progress bar, I fired up my torrent software, blew through a familiar search & download process, and it was on its way.

The Slip represented an improvement on the experiment: I went to the Nine Inch Nails site, and all there was was an input box for me to enter my email address into. I put it in (because I trusted Nine Inch Nails to not send me too much spam), and I got a link in my inbox, taking me to a simple, single page, to download the new Nine Inch Nails album in any and every format I could possibly want. It beat Apple at price, convenience, options, availability, and download speed, and it even managed to tie with P2P at options, availability, and speed. Which is quite a feat.

The record labels are still trying to charge for a product that others (more and more brave souls each day) are providing for cheaper, or free, as convenient as a couple clicks of a mouse button. Even when the record labels timidly test the water by giving a little bit away for free to “see how it goes,” they do it wrong. They do low quality so as not to devalue CDs. Or they only release samples. Or they make you sign up to a mailing list you don’t want spamming you every Tuesday when they try and cram their brand new garbage down everyone’s throats. Their websites and online tools don’t work right. They don’t understand the internet like the kids do, and they don’t have the passion or vision that artists like Trent Reznor has.

The only problem with Trent’s idea, as I see it, is that it’s limited. Let’s say every time Nine Inch Nails released a new song / video / album, every single fan went there to get it. That’s a lot of traffic, a lot of attention. You could run ads on those pages, let companies sponsor the downloads, and sell hard copies of everything, and you’d make a decent amount of money. Give away all the music to rope in as many fans as possible now, and then hit their wallets up later on tours and merchandise. But how scalable is that business model? And what do you do if you’re not Nine Inch Nails and noone knows about you?

This needs to be done on a label scale. Or larger. Trent Reznor won’t singlehandedly revolutionize the record industry with his small army of Nine Inch Nails fans. But if enough artists got together, whether it was a grassroots movement or a radical reconfiguration of a major record label, they could provide a platform more powerful than even iTunes, by employing the oldest trick in the book: cutting out the middleman.

I offer the latter scenario as an encouragement to the labels, but my gut tells me it’s a pipe dream. It would take longer to dismantle the existing machine than it would to build a new one, and by then they’ll be 3 steps behind everyone else, and they’d be doomed.

What I consider far more feasible would be artists starting to flock towards any one of the seedlings of great ideas we’re starting to see today. Perhaps Reznor’s Null Corporation will start collecting talented followers, perhaps some already well-established bands, and perhaps some great unknowns.

Or maybe tomorrow, someone will come out a step ahead of Reznor. All I know for sure is that the record labels have their heads deep in the sand. And while they do, more and more people are trying different formulas, searching for one that works. As soon as someone figures it out, a new infant Google or Apple will emerge from a garage or basement. Or recording studio.

It will happen soon.


Meanwhile, On The Internet...


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