Waiting for the canary to sing
October 2010By: Kevin C. Parks
Chicago Lawyer (Posted with permission by Chicago Lawyer magazine)
The apt metaphor for this century's music industry has been the “canary in the coal mine” — the naive explorer, thrust headlong into a dangerous digital future, in a desperate search for the buried riches that could herald a new beginning, if she lives to tell the tale.
She has had a long and difficult flight. Sales of physical CDs continue to plummet, and the industry has lost nearly half its value in the last decade, with much of the blame placed on the major music labels, whose response to the crisis, in large part, has been a zealous program of copyright enforcement litigation, including tens of thousands of suits against individuals for file-sharing activity. Other industry participants, particularly radio broadcasters, have been equally inflexible in adapting to new marketplace realities.
And yet, amidst the continuing troubles, there are signs of life — some modest, others broader and more significant — that together suggest that the bird may be winging her way out of the darkness with a song of hope.
In August, a young Florida musician created a viral sensation with a meandering, ambient version of teen star Justin Bieber’s smash hit, “U Smile,” running an epic 30 minutes, 800 percent slower than the original. Instead of asserting its copyrights, Bieber’s label voiced support for the use, acknowledging that creative, derivative works sometimes work to the benefit of the original.
On a larger scale, the major music labels have curtailed their file-sharing litigation strategy, which has been widely regarded as a public relations disaster, as well as a confirmed money pit, the labels having paid $17 million in legal fees (in 2008), to recover less than $400,000.
And most significantly, radio broadcasters have come to the table on the issue of performance rights, signaling a thaw in one of the most contentious issues in the industry. As reported in this column (February 2010), for decades music labels have periodically pursued copyright changes that would create a broad performance right in sound recordings, providing a new revenue stream for labels and recording artists, based on radio airplay of their recordings. Radio broadcasters have stubbornly resisted these changes, arguing that airplay already provides value by promoting and popularizing new music.
The radio lobby’s former president bluntly said he would prefer slitting his own throat to negotiating on the issue. Now under new leadership, and fearing that pending legislation could force the change, the group has recently expressed interest in striking a deal. Its terms are onerous, and there is much work to be done, but for the first time substantive negotiations have replaced decades of inflammatory rhetoric on both sides of the performance right debate. On the heels of these developments, both Sony Corp. and search giant Google Inc. have announced plans to introduce cloud-based digital music services in the coming months.
Are these signs of a meaningful trend? Without doubt, the canary is anything but home free, but these developments have the appearance of legitimate mile markers on the long road to the Celestial Jukebox, the idyllic future in which content creators, users and consumers thrive in a balanced environment of art and commerce. At a minimum, we are witnessing more measured approaches to the changes brought on by the digital revolution, efforts on all sides to find a middle ground that must continue if the canary can be expected to emerge.
The music business canary flew first, but she is now a symbol for all media and entertainment content businesses who have sent their own messengers into the darkness. And indeed there are encouraging signs of life elsewhere on the frontier of the digital economy.
Amidst similar turmoil in the book publishing industry, Amazon.com, Inc. is now selling more electronic books than hard covers, and one major publisher has revealed that, for the first time, a primary title, Laura Lippman’s thriller, “I’d Know You Anywhere,” has sold more e-books than hard copies in the critical first week of sale. More broadly, e-book sales have doubled in the past year to 8 percent of book publishing revenue.
After a dozen business best-sellers, author Seth Godin has announced his intention to forego traditional hard-copy publishing altogether for his future works.
Further, both Amazon.com, Inc. and Apple Inc. (already significant players in the digital music space), are introducing or expanding online delivery services for television and movie content, the latter in partnership with Netflix Inc., a DVD rental company that is leading the shift to digital streaming video. Never to be left out, Google is reportedly in talks with major Hollywood studios to bring on-demand movie content to its YouTube video platform by the end of the year.
Together, these bits and pieces of progress give us reason to keep vigil at the coal mine entrance.
It’s happened before — the canary finding her way through waves of technological disruption. Given time, the canary may sing again.
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