What Can The Record Business Learn From Newspapers?

Flickr photo by NS NewsflashJust before I started this blog, I read a post by Mathew Ingram on Gigaom entitled “Why Clay Shirky is right and Warren Buffett is wrong”. In it, Ingram discusses Shirky’s argument that Berkshire Hathaway’s purchase of Media General’s newspapers showed a lack of understanding of the newspaper business.

I thought about this again after reading David Carr’s piece in the New York Times, “The Fissures Are Growing for Papers” (hat-tip @gleonhard). The difficulties for papers that Carr describes reminded me of Ingram’s piece.

These two articles gave me a better understanding of the current state of the newspaper business, which, in turn, gave me a greater understanding of the current state of the record business. They’re in similar positions.

Ingram quotes Shirky:

The reality is that newspapers have never sold the news to readers—readers pay for the distribution platform on which that news is printed, i.e. the paper itself and the packaging involved.

This is also a description of the record business. Artists don’t sell their music to fans—fans pay for the format on which that music is recorded, i.e. the 78, LP, 8-track, CD or download itself.

Another quote:

Buffett said that the problems newspapers were facing were in part a result of ‘giving away their product at the same time they are selling it.’

This is true for some music business models. Artists give away music in an effort to generate enough attention so that they can sell the very same music via a distribution platform.

But fans don’t want the distribution platform, they want a relationship with the artist.

For years, the best way for a fan to engage with the artist was to buy a recording. In fact, buying recordings has been such a major component of fan engagement that we’ve forgotten that it is actually a substitute for that engagement. If fans want to engage today, they can check out an artist’s Twitter feed or friend them on Facebook.

Current media models are problematic because fans no longer have to pay for a distribution platform simply to get the engagement that they crave. The price of a recording is now effectively zero. There are countless other ways to create engagement between artists and fans. Yet despite this, music itself has not lost any value and engagement remains priceless.

Shirky’s point is that the underlying facets of the newspaper business are far too often misunderstood. This is true of the music business as well, and I wonder if anything can be learned from this comparison.

White Vs. Lowery: In Which The Entire Internet Debates The Future Of Music Business Models.

I woke up Tuesday morning to a Twitter feed buzzing about an open (and lengthy) letter that David Lowery (a singer/songwriter formerly of Camper Van Beethoven and Cracker, current teacher, blogger and artist advocate) wrote to Emily White (an intern at NPR).

White wrote a piece called "I've Never Owned Any Music To Begin With" in which she explains exactly that: her iPod is full of music and her life is surrounded by music, yet she's only ever bought 15 CDs.  She also asks why she can't have the convenience of getting access to every song she wants, whenever she wants it.

Lowery's response was meant as a well-intentioned answer from an artist's perspective. While he explores in extensive detail the issues facing musicians in the current music marketplace, at times he employs some heavy-handed reasoning in attempting to point out errors in White's thinking.

I've spent tons of time over the past couple of days reading and re-reading these pieces, as well as many of the other articles, comments, reviews and tweets this exchange has spawned. (See my Twitter feed for a very small sampling.)

While I found White's honest piece to be a bit naive (she is a college-age intern after all), I think it is an extremely important insight into the mind of the current consumer of music. Obviously, by herself, she is not a statistically significant sample, but when you remember that an entire generation has now grown up during the digital era, you must realize that many other "digital natives" also share this perspective.

Photo illustration by Emily RabinI think that Lowery's response shows great attention to many of the issues facing musicians. However, I feel that using moral arguments is simply not an effective means of answering the questions that White (and other "digital natives") are raising through their behavior. Additionally, his response plays a little fast and loose with the facts and exudes a sense of entitlement that is off-putting.

For me, the cat is already out of the bag: if an entire generation of music consumers sees no reason to purchase recorded music, how will they ever be convinced to do otherwise? This is just proof of the sea change that has taken place. It suggests that the entire model of the record business specifically, and the music business generally, has collapsed.

The bright spot here is that together, White and Lowery have spawned a viral sensation over music business models. So what can we do next?