In the mid-nineties, in his best-seller »Being Digital«, Nicholas Negroponte observed that the real service provided by the big media companies was »not the information and entertainment content of their products, but distribution«1. This means, he wrote, that in the digital age the easier distribution of bits as opposed to atoms actually rendered »huge joint-stock companies obsolete«. With the start of the »Napster Revolution« from 1999, this theory seems to be confirmed: the music industry, which in the early eighties forced along the digitization of its products with the introduction of the CD in the early eighties, is in a profound crisis. The Los Angeles-based journalist Janko Röttgers (born 1976) last year published the book »Mix, Burn & R.I.P. The End of the Music Industry«2, in which he traces the short history of the filesharing networks and describes the attempts of the music industry to prevent the private copying and swapping of their products on the Internet. A hopeless fight, since, for Röttgers, music as a product is a business model that has been superseded. With his weblog mixburnrip.de3, he documents the current developments on the topic of music on the Internet.

[b]Kito Nedo:[/b] You write: »Music lives from the event nature of a live concert as well as from the cover of a well-designed album, film from cinema, text from the haptic experience of a good book«. But you nonetheless interpret the much-cited crisis of the music industry and the success of Internet filesharing networks as harbingers of the end of the »content industries«. Why?

[b]Janko Röttgers:[/b] Music has already been consumed digitally for decades in the form of CDs. That is why music is the first medium that has to face up to this new challenge. Each medium has different characteristics and will therefore also sooner or later have different problems. But these characteristics only ever appeal to a specific target group. A live concert or an album cover: you are either socialized with them or not. I will possibly be used to buying myself an album and looking through the liner notes if I started buying records five, ten or twenty years ago. But if I have grown up today only getting MP3s from the Net, then I possibly won’t see any value in that any more. Similar things may also apply sooner or later to other media, for example, books. And, for the industry, this functions the other way round as well: people grew up seeing films in the cinema and thus at first saw television as a sort of substitute. The film would only come on television years later and then you would watch it again – but first you saw it in the cinema. This is no longer necessarily the main way of watching cinema films now. People borrow DVDs. This means: sometimes this change in values works in favour of the industry, and sometimes it just functions against or completely without the industry.

[b]Nedo:[/b] The main theory of your book is that the music industry has failed to react with new business models to the »digital reality« of free-floating content in the Internet. What business models are appropriate to the current situation?

[b]Röttgers:[/b] The music industry has become specialized in a very specific model for selling music within one hundred years. This is also connected with a very complex commercial system: with various rights, with collecting societies, with singles taken from albums and different rights holders who have very different interests. If they are confronted with something new, possibly not all of them will be in agreement. For this reason, the music industry has a structural problem in getting used to such innovations. But I think that there certainly are business models that could function despite the existence of filesharing networks on the Net. For me, the most important idea is to get away from the idea of selling music as a product, as a plastic disc. Music has always been more than this product. Musicians have always earned money with other things than just selling records. New ways have to be found, and one of these ways is to accept the swapping of music on the Net and think about how you can still earn money with it.

[b]Nedo:[/b] In the book you published last year, you favour a GEMA-like system [GEMA = German performing rights organization] where all the companies involved in the distribution of music on the Net pay a flat fee. Is there any progress here?

[b]Röttgers:[/b] That cuts two ways. One development since the book was printed is the Apple Music Store4, which is relatively successful as far as the online-music industry goes. This has resulted in many people thinking: you can relatively easily apply the model of selling music as a product to the Net and say we’re going to do downloads – they are now our records or our singles. This will turn out to be a mistake. Even now, Apples is admitting pretty frankly that the business produces practically no profit. The profits will be small for musicians and the music business too, because there is the possibility of obtaining individual songs. I can pick out the few songs I like and possibly spend much less money than before. At first it looks like a lot, because no one spent any money on downloads before. But I think that it replaces CD sales, and not necessarily downloads from filesharing networks. As far as flat fees go, there have been some developments. The Electronic Frontier Foundation5, a Net civil rights organization based in California, introduced a model at the start of the year, a sort of »voluntarily collective licensing«. For years, the EFF did not come out in support of a model like this, because it tended to be seen as a new tax or compulsory levy, which, in the case of people of a libertarian, liberal bent, first causes some scepticism. This model is based on the idea of record companies entering agreements with Internet companies or Internet users and agreeing upon a sensible amount to pay. Without any laws being enacted. This would not only affect recording companies, but also collecting societies, rights holders and others. I find it interesting that an organization like the EFF has now come out in favour of an idea like that. Another thing that gave me reason to hope was m4music6 – a music industry congress in Switzerland at the start of April. Among others, Jim Griffin from Los Angeles was invited, a great champion of the flat-fee idea who tried to convince people with his speech. In the audience there were a lot of musicians, people from indy labels, from smaller structures. It was very interesting to watch the reactions. I had actually expected that there would be a lot of flat-out rejection. But that was completely missing in the discussion. On the contrary, most people were very impatient and wanted to know how it could be put into practice as soon as possible. It was more about questions of detail, like just distribution among the artists. That was an interesting indication that the discussion is moving in this direction.

[b]Nedo:[/b] Why don’t the lawsuits brought against users of the Net filesharing networks by the music industry have any point?

[b]Röttgers:[/b] In the beginning, the lawsuits did actually lead to some uncertainty. But over the next few month, a lot of users began to see that the risk is relatively small, even if a few hundred people are affected, compared with the some 50 to 60 million people using filesharing networks in the USA. People seem to be ready to take this risk and have now learnt to cope with it. For example, by not preparing so many files for downloading so the music industry doesn’t get you in its sights. More people are swapping now than a year ago, when the industry started these lawsuits. The lawsuits also lead to people thinking: what can we do differently with filesharing networks?

[b]Nedo:[/b] How will the filesharing networks develop?

[b]Röttgers:[/b] I think that there will be a jump in innovation in the near future and that new forms of networking will be found. Possibly they will be small, personal networks that overlap. What is interesting are web sites offering social networks, like Friendster.com7. They allow me to get to know my personal friends, and friends of friends, to surf around and see who I now know through other people. If you imagine something like this in connection with the possibility of swapping media, this could be a model that offers a relatively broad horizon of search and a big range of interesting media. This is a problem with filesharing networks: that I have a search mask and have to know first what it is I want. The model of the social networks could lead to filesharing networks becoming more interesting for the users and easier to operate, while at the same time making it more difficult for the industry to pick out individual users. More difficult because I may only open my whole hard disk to my twenty best friends and only make the ten songs that I really like available to everybody.

 

Translated by Timothy Jones

 

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