This post is part of a group blogging event on this topic organized with our friends at MusicianWages.com and About.com Music Careers.

Hello,

I have a teenage son who tells me his pirating music is no big deal. Since he is a musician himself, I point out to him that someday that’s going to be his money people are stealing. But he remains unphased.

He tells me the record sales make money for the record label, not the artist. He says that the artists make all their money from touring and live concerts. He thinks the pirated music promotes the concerts and therefore helps the artist make more money. I still don’t allow pirating in my house.

But tell me what you think - as artists out there having your work “shared,” are you just glad to have it being enjoyed, or does it bother you? Admittedly, he is stealing music that is recorded by major record labels, so maybe its different than the independent musician working for his living. But I’d still like to hear what you think.

Thanks,
Valerie

Valerie,

Your son is correct when he points out that artists typically don’t get paid royalties from record sales and P2P file sharing can help artists generate awareness that can lead to concert sales. However, I believe your son’s argument that it’s “no big deal” to pirate music is largely misguided.

Below are few things to consider:

Record Labels are Not Inherently Evil

It’s true the traditional record label model for compensating recording artists is largely unfair and that the vast majority of artists never see any royalties from record sales. This needs to change and I believe recording artist compensation (among many other things) will have to change in the near future if records labels are going to survive. Many recording artists simply don’t have access to the financial resources or marketing expertise that is often times required to get their music heard by a critical mass of fans.  

Record labels can provide a valuable service to artists by investing capital and time into developing an artist’s fan base. Most record labels, majors and indies, have good people on their staff who are true, die hard music fans and work tirelessly to promote and support the artists on their rosters.

I would wager that if most music fans truthfully revisited their all time favorite albums and CD’s they would find that many of them were put out by the very record labels that are now so popular to despise.   

P2P File Sharing Networks are Not Evil Either

The field of artists vying for attention of music fans is more crowded than ever. The biggest challenge for most artists these days is just getting their music heard by fans. P2P file sharing networks have proven to be a great music discovery tool for fans and a great viral marketing tool for many artists. I encourage all artists (and labels) to find innovative ways to include P2P file sharing in their overall marketing strategy and make at least some of their some of their songs available to fans via P2P networks.

P2P file sharing is a concept and technology that is not going away. The debate about whether the technology should be allowed to exist is pointless at this stage. A real effort should be made by the multitude of rights holders in the music industry to figure out a commerce based P2P business model. It’s equally shocking and sad that 10 years after the rise of Napster none exists.

If your son uses P2P networks to discover new music then supports the bands he really likes by purchasing their music, merchandise and concert tickets I think that is a reality many artists are growing to accept and some even embrace. If he simply uses P2P downloads in lieu of ever actually buying music I personally think that’s very hard to justify.

Touring is Not Enough

It’s largely a myth that artists can simply earn a living by touring. With the exception of a small number of well established artists (who most likely have or had significant record label support) it can be quite difficult for even very talented artists to get booked at all, let alone tour. The artists who do tour can find it very difficult to turn a profit.  Anyone who claims indie bands make money on tour has never been in an indie band on tour. Record labels often times end up paying artists on their label roster “tour support” money to help cover some of the costs of touring just so the artist can stay on the road.

There are simply too many artists interested in playing for a limited number of venues and a limited number of fans even willing to pay to see live music.

Additionally, songwriters who are not performing artists are not able to earn money through touring.

Here’s the Real Problem

Record labels need to generate a profit from sales of recorded music in order to have cash to invest in new artists and to support their existing artist roster. If music fans no longer buy music (they just pirate it) record labels can’t generate the cash that’s needed to invest in artists or even survive.

I am a big proponent of the “direct to fan” movement where artists by-pass the traditional record label route and build a relationship directly with their fans. There are now a large number of innovative, technology related options available to artists for directly reaching fans through online distribution, marketing, commerce and viral promotions. Unfortunately, almost none of the companies that have developed these wonderful tools have sustainable business models (turns a net profit) and rely heavily on outside investors or support from a parent company to temporarily survive.

In other words, virtually no one in the music industry has figured out how to build a sustainable business model when fans don’t directly pay for music. The public and private investors who provide the capital for the industry will eventually flee for greener pastures. It doesn’t take a PHD in economics to understand how this trend, left unchecked, will ultimately play out for the industry, artists and fans.

Like all industries, the basic economic model for the music industry is fairly simple. The music industry needs revenue to survive and prosper.

If your son is truly a music lover I encourage him to seriously contemplate what the future of the music industry just might look like when music fans are no longer willing to pay for music.  I would then encourage him to go buy some music by his favorite artists.