2018: Who Controls Music? The debate on intellectual property resurfaces, with musicians and consumers pushed to the sidelines

We celebrate the end of the year the only way we know how: through lists, essays, and mixes. Join us as we explore the music that helped define the year. More from this series

On September 12, 2018, the European Parliament passed the Directive on Copyright in the Digital Single Market (a.k.a. the EU Copyright Directive), an omnibus bill covering questions of copyright in the realm of social media. Key to our concerns is Article 13, which would essentially require social media outlets and user-based content platforms like YouTube to filter out potential content for infringement violations before they’re even uploaded. Because it took two votes to pass, the European Union must now consult with its member states to iron out an agreement. It’s an open question whether it will become law, but given that the second reading offered only minor concessions, there is a high likelihood that it will.

In a way, it was almost inevitable; the whole fight seemed different this time. While distance and political complexity certainly didn’t help matters for many Americans, there was another issue: This didn’t feel like a legitimate fight. Pushing hard to stop the law was Google and Facebook, who 10 years ago may have been hailed as heroes for their lobbying. Nowadays, we treat them with contempt. Sure, internet elders like Wikipedia co-founder Jimmy Wales and author Neil Gaiman backed the law, but their elite status also made them seem all the more detached from the rest of us.

By no means should you consider this a show of support for the backers of the law, including musical dinosaur Paul McCartney. Instead, what we should bear witness to is the tragic state of affairs in the long campaign over intellectual property (IP). The fight in the European Parliament was not about saving a free and open internet from greedy music labels and film studios so much as a fight between one industry of rich people against another. More and more, we consumers, critics, and creators, who don’t have the riches to take a stance, have been sidelined almost permanently in what is actually a battle over access and distribution; no matter who wins, we are the biggest losers. It’s time to reassess how we view and address IP, for the sake of not only reclaiming music, but also making it a communal part of our lives once more.

The Means of Distribution
Universal Music Publishing Group

To best assess the situation, we should re-examine intellectual property as a whole and how it has changed us in the last 20 years. To start, we need to step away from the legalese that cover copyright and related matters and focus instead on intellectual property’s intangibility. Because a single artist, or creator, is able to make a song and replicate it by handing off a medium and mass printing/copying it, standard models of production, labor, and ownership don’t really make sense. Instead, we must consider the node of distribution as the means in which a song has value.

Pre-internet record labels, as publishers, had significant control over distribution through record-pressing plants, media contacts, and booking networks for live performance. Promoting music required significant resources that musicians rarely had access to, so they turned to labels to promote their works to a larger audience. While some of those labels provided a respectable return for artists, others — especially larger labels that had vast corporate resources and capital — took advantage of their position to extract as much money out of their artists as they could.

With the advent of file-sharing services and the MP3 file format, the leverage that publishers had was initially lost, since publishers no longer had complete control of the means of distribution. In turn, with no value from either production or distribution, the practical value of a recorded song reached near-zero. This had a levelling effect for a time: While artists entrenched and benefiting from the old system saw significant losses in wealth, artists who previously would’ve been rejected from or marginalized in the system saw their prospects rise.

The Software Is The Message
Teens file-sharing (photo: SCA Svenska Cellulosa Aktiebolaget)

Now, the narrative we’re told time and again by tech evangelists is that listeners, as consumers, essentially took control of the means of distribution once file-sharing became prominent. Regaining a sense of social control over music that had been long lost, consumers were now able to find and listen to whatever they wanted. In this, they became the true distributors of music.

Except they didn’t.

File-sharing services became the means of distribution itself, and the developers of this software were at the time willing to negate the value of the songs themselves. The consumer was merely playing a passive role in using the software the way they wanted. Distribution had not been disrupted; it was merely shifted from one group to another.

In this context, what has occurred over the last decade and a half makes more sense from a tech industry perspective. Tech companies were content with allowing such file-sharing to occur because it didn’t hamper their operations, yet they also didn’t have a means to monetize it either. The software was merely the means to get people interested in what they had to offer elsewhere, either directly or indirectly.

But it wasn’t long before tech companies figured out how to earn money off these habits, and then some.

Decimated by Data
Beyoncé, JAY-Z, and Kanye West, shrinkwrapped

To make money in the aftermath of the Great Recession, tech companies started focusing on “as-a-service” models of business that shifted ownership and control away from the user and onto the company providing the service. Streaming services is how we see it in music. We know the pitch: All the music you could possibly want, accessible at any time, for free (with ads) or through a monthly subscription. The model certainly helped at a time when disk space on devices were plateauing.

But as we’ve learned over time, nothing’s free with tech. So goes the adage now: “If you’re not paying for a service, you are the product.” You essentially give up ownership of any of the songs you listen to, and moreover these services are tracking your listening habits to feed their algorithms to better adjust listening recommendations and automated playlists.

These algorithms, by nature of being algorithms, aren’t particularly helpful to musicians looking for a greater audience. The saying “any algorithm is only as good as the data put in” applies: They’re limited by what people are already listening to and whatever tags are applied to a song. It’s not a guarantee a song will be heard. It also greatly limits a listener’s potential to explore, since these algorithms essentially make “comfort zones” out of listening habits. (And let’s not forget the fact that these listens, among other bits of data, are sold to advertisers regardless if you pay for the service or not.)

In essence, we’ve exchanged one form of distribution for another, and it’s not exactly better for everyone involved. It’s also filled with the same potential for corruption. Just this year, Norwegian magazine Dagens Næringsliv uncovered evidence that Tidal, a streaming service marketed as being “for artists,” was juking listening stats for Kanye West’s The Life of Pablo and Beyoncé’s Lemonade to increase the royalties both creators and their publishers received.

An Agenda of Profitability
This is where Spotify stores its music streams. Look familiar? (photo: Facebook)

The shift in streaming has been as dramatic as the shift from physical to digital media. According to a mid-2018 report by the RIAA, streaming now accounts for 75% of industry revenue. Globally, according to MIDiA Research, there are now 229.56 million subscribers to these services, with Americans representing about a quarter of that amount. Spotify, Apple Music, and Amazon take the lion’s share of these subscribers, representing two-thirds of the total. (Tidal’s numbers are unreported, but supposedly hover around the 1 million mark, which is rather small, but likely a consequence of having no free version). So, it would appear that the industry is flowing with money.

So why is it that Spotify, which is heavily invested by the major labels, bleeds money every single day?

We’re not kidding. Spotify has not had a single profitable quarter since it started in 2007. Its closest brush to profit was the most recent quarter, with a net loss of $6 million. But consider that in fiscal year 2017 they lost $426.4 million. That’s over a million a day. What keeps it from completely sinking is a significant reserve of cash from various sources.

So why is it losing money? Put simply, it’s expensive to run a streaming service. You have to pay for multiple things: The servers from which to store the music, the high-speed connections to send music to users, and most importantly, the music licensing fees from publishers, alongside musician royalties. Label investments offset the licensing costs, but how much remains a mystery.

Spotify complicates this by offering a free version of their service, one that includes audio ads. But like any internet-based advertising, these ads are incredibly cheap. As a consequence, a free user can’t recoup these costs, and they’re meant to become paid subscribers over time. Yet, even then, it takes a year of paid service to recover the costs of them being free users in the first place.

Control of Access
A cozy Amazon fulfillment center (photo: Maryland GovPics)

Of course, one solution to Spotify’s problem would be to make the service pay-only. But free users account for 57% of Spotify’s userbase. Cutting them off is not a serious option. That leaves two other ideas. One is the Netflix approach of controlling operating costs by reducing the available amount of songs and albums. Reducing this amount not only cuts down on licensing costs, but reduces infrastructure investment in data centers and other tech needed to run the service. The other is the Amazon approach to profitability: Monopolize all aspects of the business, and eventually you will become profitable by virtue of being the only source in town.

As one might guess, the Netflix approach doesn’t work well for music. Films and TV shows by and large have a seasonal, infrequent element to them that songs lack. Plus, customers can be more forgiving for films and shows, given a single film in HD could be equivalent in data size to about a thousand songs in high-quality MP3 (assuming the average two-hour film in full HD 1080p equates to 5GB in space and the average MP3 song is 5MB in size).

So that leaves the Amazon option. In this light, the aforementioned Article 13 fight suddenly makes sense from the music industry perspective: While there is a lot of revenue coming in now from streaming, it’s still not enough. And it’s certainly not a profitable business. They can’t be profitable as long as the industry and its streaming partners lack complete control over access.

The Absent Landlords
No attribution required

This brings us to the other group in the current IP battles, made up of non-publisher tech groups like Google (which runs YouTube) and Facebook. The arguments that these groups have made repeatedly is that Article 13 will greatly affect content creators on their site. There is some rationale to this argument: A lot of videos on YouTube utilize music in some capacity, usually from a personal collection. They even go so far to claim that an “open, creative” internet would be greatly threatened by the development.

This would be a valid stance to make had it not been for the simple fact that these tech groups have already been placating labels for years. YouTube utilizes its Content ID algorithm to either remove videos or forcibly shift ad revenue from creators to publishers, i.e. labels. Facebook utilizes similar technology in its platform. With both of these techs in place, they’ve given assurances to the labels that they’ll “combat piracy.”

But we know of Content ID’s inadequacy. Much as we noted before, algorithms are only as good as the data put into it. It can’t discern between legitimate uses, such as parody and someone’s kid playfully dancing to Prince inadvertently going viral, and merely posting an MP3 rip with lyrics attached to it. Much of Article 13’s battle, ironically, comes from this particular issue, and whether it should be used as instant filter rather than something to search.

So if they’re willing to do the labels’ work, why do these tech groups fight for an open internet they don’t actually support? The messy situation behind Europe’s GDPR should be a good indication of what Google and Facebook want: To not have any financial burdens imposed by the law. It’s an indirect tax on their business, since they would have to spend time and money building something they don’t care to build, and something that will cost them money over time, which they can’t recoup directly.

They’d be happier if their user-based systems were left alone, allowing them to fulfill their purpose: To collect and manage data, much like streaming services do, and to use it to sell ads. They may not admit this, but they take on the stance of absent landlord: As long as the systems function properly and the rent is paid (in the form of ad revenue and data collection), they don’t care what happens on their platforms, and thus to their users.

We’ve all seen the result of that: Facebook mired in scandal after scandal regarding data, while Google comes under increasing scrutiny. Our prior benefactors don’t look so good.

Moreover, it’s not like more illicit tech is a particularly reliable source for music these days. Various torrent trackers have come and gone, with very few remaining that haven’t been taken out. The most famous of these, The Pirate Bay, has been suffering extensive downtime in the last three months of 2018 for reasons that have little to do with the efforts of the record labels. That it’s taken so long to address the issue demonstrate the declining state of that site.

The Stakes For Preservation
Happily voting on the EU Copyright Directive

As one can see here, we have two factions vying for profit at the expense of customers and artists. On one side, you have streaming services and their label backers seeking to control not only what music you play, but also who you can play. On the other, tech companies whose primary concern is making money off the data we provide them. Music is no longer really in the hands of either consumers or creators. The battle over Article 13 is less about the state of music and who has the right to possess it, and more just cutthroat business at play, with us suffering the most.

This presents many problems, some of which we’ve already discussed, but a pressing issue is music preservation. By dangling the specter of copyright as a barrier, we can’t control the means of distribution, thus having little means to store music. Songs and compositions intended to be preserved are forgotten simply because the rights holder (who is often a label, very rarely the artist’s estate) has no interest in reissuing the music. As music moves away from physical to digital, preservation becomes much harder, whether it’s more traditional or classic genres, or just original mixes and recordings and songs.

This would mean hunting down increasingly degraded records and cassettes to get what you’re looking for, then hoping it’s okay to even preserve them in an accessible space. Consider the recent example by Dr. Ulrich Kaiser, who uploaded hundreds of classical compositions and their performances that were legally in the public domain to YouTube. Many were taken down through Content ID despite them being completely above-the-board legal. When they were restored, they were done so in a way that made it extremely difficult to share with other people, including students who may be training in classical.

The Pirate (Politics) Problem
Julia Reda, MEP for The Pirate Party

With the problem now made clear, we must seek to reclaim music as ours, both as musicians and as listeners. It will certainly require some form of political intervention. However, the main political driving force for these actions is currently also one that’s not entirely interested in pushing back anymore. Granted, during the debate on Article 13, Julia Reda, MEP for the German Pirate Party, was one of the leading organizers opposing the new measures, and for that we should be thankful.

At the same time, the situation with the Pirate Parties in Europe, and “pirate politics” in general, has been scattershot at best. At present, alongside Reda being the only Pirate Party member of any country in European Parliament, there are only three countries with Pirate Parties in their respective legislatures. While this is a vast improvement over the last 10 years, it has only occurred because these parties evolved into something more than just single-issue parties, which has certainly been a cause for distraction from the original agenda.

One could go on about the reasons why the situation has changed. But a bigger problem, one that can only be briefly discussed here, is pirate politics’ overall commitment to technology as a way forward. The problem with this form of futuristic sentiment is that it disregards the framework in which intellectual property exists. It sees solutions in the forms of free, open-source software, alongside a vague sense of copyright reform. But that doesn’t actually resolve the pressing issues of access and distribution that can’t align with such systems. And outside of that measly promise of reform, there isn’t a clear solution from any of these political organizations, because they can’t see beyond tech.

Restoring Music as a Social Entity
Music as community (photo: Susan Jane Golding)

This does not mean that we can’t resort to political solutions to reclaim music. It simply means that we need to take a fresh approach to this, one not driven merely by the legal complexities of copyright. The key is to emphasize the social, communal nature of music as culture, so as to have a power base from which to actually take on the industries that exploit it for profit. In other words, a collective mentality and strategy bringing musicians and consumers together as an entity, perhaps a movement. In doing this, musicians would have a greater reach toward their audience while gaining leverage against publishers and distributors. Listeners and consumers would have a greater freedom toward what they can listen to and where they can listen. Moreover, this method of organizing would strengthen the relationship between musician and audience.

There are some possible avenues to address this. First is in the public space. Have you ever noticed how often the only public broadcasting of music comes from people’s headphones or smartphone speakers? That’s because IP laws extend to the public space. You can’t even play music outward to the street without being expected to pay licensing fees to rights holders. This extends to video and game streaming, where services like Twitch are further restricting licensed music from being played on stream, even when it comes from a video game itself. That must change, in essence limiting where IP law can be imposed.

Another area to address this is, ironically, the very thing that drives this debate indirectly: data. So much of music streaming is built on algorithms that are hidden from the public, including musicians and consumers. This information would at least help us understand how the distribution of music works from a streaming standpoint. Opening up access to the algorithms on all services and allowing people to tinker with them can help address issues of accessibility.

Finally, there is the simple matter of weakening the profit motive driving both streaming services and tech companies when it comes to music. There are different ways of doing this, from taxes on data and capital gains going directly to music preservation, to allowing ad-free public access of music, to pushing these services to create repositories of music that are accessible to the public free of charge. Copyright reforms like reducing terms, preventing companies from claiming copyright on public domain works, and redefining the relationship between creator and publisher can also help.

The question of music ownership is a question of distribution and access, and both are in the hands of forces far beyond our control. Even when we create songs, it’s no longer clear whether or not we can actually access it or give it to someone else, for that’s all in the hands of one corporation or another. The EU Copyright Directive battle had simply brought that lack of control out in plain sight. With the loss of many avenues of alternative distribution, it’s up to us to not only rebuild access in favorable terms, but also reclaim music as what it was meant to be: ours.

We celebrate the end of the year the only way we know how: through lists, essays, and mixes. Join us as we explore the music that helped define the year. More from this series

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