We’re always surprised to read an oped by someone perhaps unfamiliar with the music business in which that person bemoans the reluctance of the industry to embrace change. Andrew Quinlan’s piece this week is one such oped, fueled by so much misinformation about the business that it’s difficult to know where to begin our response.
To be clear: the music business has fully transformed itself into an innovative, modern, and nimble industry that now derives more revenue from digital platforms and services than any other creative industry. It takes one look at our recently released 2015 year-end revenue figures to see that. That’s a fact we’ve celebrated time and time again and will continue to do so. We are proud to offer fans a wide variety of options for listening to their favorite music (see here for a list of examples), from streaming platforms to download services to digital radio sites and more. Our record label members are partnering with innovative companies who continue to push the limits to discover the next new distribution method that fans will love. Any theory that the industry is attempting to ‘kill’ these innovative platforms is ludicrous and ill-informed.
We also are an industry which, not unlike the Center for Freedom and Prosperity of which Mr. Quinlan sits at the helm, strongly believes in the principles of the free market. What does that mean? It means we believe that a company or platform that wants to use our product to benefit its business should be paying a market rate for our product. And when we see market distortions at play, such as companies like YouTube which have the biggest user base but pay among the lowest rates for our music, we call attention to the problem.
We’ve done the same thing in the case of AM/FM broadcasters that have for decades used their lobbying muscle to ensure that they don’t have to pay a dime of their $14 billion of advertising revenue to the musicians who create the music their audience wants to hear, which is the basis of the bipartisan Fair Play Fair Pay Act that ensures performers are paid when their music is played on terrestrial radio. (We found it amusing that Mr. Quinlan claimed the music industry is trying to “shake down” the broadcast industry with the bill. Since when is it a shake down to ask to be paid when others make commercial use of your property?) Most people are shocked to learn that AM/FM radio doesn’t pay artists. If there’s any industry that’s desperately fighting against change, it’s the broadcasters.
The music industry is now a $7 billion business (less than half what is used to be), but we are grateful for a few years of stable revenues. We are excited that we now earn more than $1 billion from streaming platforms and are bullish about our future. But tech companies should not refuse to pay market rates for music while using it to enrich themselves. We are confident that if we can all work together on meaningful reforms that value music and its creators while embracing the value and benefits of these tech platforms – a dialogue we continue to advocate for – we can get there.