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The Jabberwock, the Bandersnatch, and the Recording Industry · Sunday September 28, 2008 by Crosbie Fitch

As Gerd Leonhard observes with his experienced and perhaps jaded eye, entrepreneurs such as Justin Ouellette (Muxtape) that step foot in the recording industry’s territory with a view to doing business there may well be intrepid, but they may also be foolhardy. If they don’t fall foul of the jaws that bite or the claws that catch, they will at least gain the wisdom that you either beat them on fresh territory, or you join them on theirs. You do not beat them on their turf.

Here’s a fragment of Justin’s Muxtape story:

In May I had my first meeting with a major label, Universal Music Group. I went alone and prepared myself for the worst, having spent the last decade toeing the indie party line that the big labels were hopelessly obstinate luddites with no idea what was good for them. I’m here to tell you now that the labels understand their business a lot better than most people suspect, although they each have their own surprisingly distinct personality when it comes to how they approach the future. The gentlemen I met at Universal were incredibly receptive and tactful; I didn’t have to sell them on why Muxtape was good for them, they knew it was cool and just wanted to get paid. I sympathized with that. I told them I needed some time to get a proposal together and we left things in limbo.

A few weeks later I had a meeting with EMI, the character of which was much different. I walked into a conference room and shook eight or nine hands, sitting down at a conference table with a phonebook-thick file labeled “Muxtape” laying on it. The people I met formed a semi-circle around me like a split brain, legal on one side and business development on the other. The meeting alternated between an intense grilling from the legal side (“you are a willful infringer and we are mere hours from shutting you down”) and an awkward discussion with the business side (“assuming we don’t shut you down, how do you see us working together?”). I asked for two weeks to make a proposal, they gave me two days.

Which provides some context for Gerd’s observations:

It totally amazes (but not surprises) me how much Justin’s story is similar to my own experiences with Sonific, my last digital music startup, and how much it matches with the stories I keep hearing from dozens of brave if maybe somewhat ‘fresh’ digital music entrepreneurs every single day: you bring golden ideas to the record industry and they will act like it’s dirt – simply because it means they will need to share the control. Most of the major label execs will eagerly suck up all the information you can give them only to then a) drop all communications and reverse-engineer what you do b) present you with terms that would make Stalin look like an altruist. Muxtape draws the right conclusion: start from scratch, directly with the artists.

Start from scratch, and on fresh turf not controlled by the industry. Even Justin considered this, though he initially ruled it out:

As I saw it I had three options. The first was to just shut everything down, which I never really considered. The second was to ban major label content entirely, which might have solved the immediate crisis, but had two strong points against it. The first, most visibly, was that it would prevent people from using the majority of available music in their mixes. The second was that it did nothing to address the deeper questions surrounding ownership and usage for everyone else who wasn’t a major label: mid-size labels and independent artists who have just as fundamental a right to address how their content is used as a large corporation, even if they don’t carry quite as big a stick.

It’s plain that Justin has recognised he can’t deal with the barons, but it’s also clear he’s still failed to recognise why in his homesteading forays he could so unwittingly stumble across their now unguarded borders. He also doesn’t appear to recognise this as an indication of the barons’ doom, why their territory must not only cease expanding, but from the disintegration of its imperial overexpansion must soon fade into legend as a land of mythological and invented creatures. Artists never did, do not and never will have a fundamental right to control the use of their ‘content’. Publishing corporations were certainly granted such a privilege by the Queen of Hearts, but this is a supernatural power that even in simulation takes the might of governments to enforce, and the wealth of its commercial exploitation to prosecute. Fortunately, the rude people are yet more massive and mighty – and when they realise the myth of copyright has no greater force than fear, its magical thrall over them disappears. The masses share their music once more and the old matriarch’s monopolies collapse like a house of cards.

Tim Westergren, evidently a mythologically familiar entrepreneur, is inclined to have Pandora open the box of all musicians’ music to the four corners of world. However, he has also struggled in his swordplay and has had to sometimes rest by the Tumtum tree.

It continues to astound me and the rest of the team here that the industry is not working more constructively to support the growth of services that introduce listeners to new music and that are totally supportive of paying fair royalties to the creators of music. I don’t often say such things, but the course being charted by the labels and publishers and their representative organizations is nothing short of disastrous for artists whom they purport to represent – and by that I mean both well known and indie artists.

So that he could once again provide his services in the UK, I suggested to him that Pandora should simply ditch all licensed music (except where copies were already possessed by the listener – the playback of those copies being interleaved with streaming of others) and focus solely on the recommendation/discovery of new musicians who’d had the sense to unilaterally negotiate permanent zero licensing rates (thus neutralising the ability of collection societies to extort money from the promoters among their audience).

Etienne Handman (COO) replied with considerable skepticism as to my suggestion being financially viable (let alone practical). I suspect this is because they’re still focussed on chasing old money (promoters and advertisers), rather than the good coin of the people who actually value their service, i.e. musicians and their audiences.

After all, it is the audience who has the money and the musician who has the music. These are the two parties who have business with each other, who want to exchange music for money, and money for music. This new online world in which artist directly encounters audience is the lush, untrodden turf in which entrepreneurs should look to provide their services, facilitating production, performances, discoveries, and exchanges. This is the new marketplace for music. Moreover, this is no place for the hindrances of old, the anachronistic privileges and unfair monopolies that mollycoddle music publishers at the expense of all music lovers and all but a minority of musicians.

We are already seeing a hint of the entrepreneurs to come. We have library facilities such as Jamendo who’ve recognised the encumbrance of copyright does not help new bands self-promote themselves, and recommendation facilities such as Pandora who’ve recognised that music is better recommended by merit than money (Payola). So, there’s still room for intermediaries between audience and artist, but they’ve really got to add value if they want to earn money, not remove it (DRM, advertising, etc.).

This is why, if you are an entrepreneur in the business of digital art production, I caution you to venture only into the largely undiscovered territory of non-copyright based revenue models. This means steadfastly avoiding incursions into, or contamination from, the established territory of the traditional music industry and its copyright polluted works. Leave them to their anachronistic business of selling snow to Eskimos, selling copies to audiences who can quite easily make copies all by themselves. Pissing on your own product, making the snow yellow (adding DRM) and litigiously biting the hands that feed you are the marks of a senile industry that has reverted to rabid territoriality and reliance upon ever greater state support (DMCA). The old dog may well invite you round for dinner to teach it your new tricks, however its remaining survival instinct is not to learn, but to eat. So beware the jaws that bite, the claws that catch, beware the Jubjub bird and shun the frumious Bandersnatch.

In averting the ending of this post on a sour note let’s look forward to that frabjous day when copyright has been abolished, all musicians and their audiences are free, and we can all chortle in our joy, “Callooh! Callay! The Jabberwock is dead!”



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