Cry Me A River: Musician Billy Bragg on the Internet Underwriting Creatives Provide

A reader, catching up on her reading, forwarded a link to a New York Times piece called The Royalty Scam. In it, English songwriter and author Billy Bragg eloquently wrote about the inherent problem occurring on the Internet. In mentioning a conversation with the founder of Bebo.com - a social networking site that just sold to AOL for $850 million - he wrote the following:

In our discussions, we largely ignored the elephant in the room: the issue of whether he ought to consider paying some kind of royalties to the artists. After all, wasn’t he using their music to draw members — and advertising — to his business? Social-networking sites like Bebo argue that they have no money to distribute — their value is their membership. Well, last week Michael Birch realized the value of his membership. I’m sure he’ll be rewarding those technicians and accountants who helped him achieve this success. Perhaps he should also consider the contribution of his artists.

I agree with Mr. Bragg that there is a significant problem for creatives of all stripes. Also, anyone who's been reading my posts for any period of time knows that I'm not a fan of giving work away, whether for "exposure" or not. (Bragg points out that he gets exposure from radio stations; the difference is that they pay for the use of his music.)

However, the Internet issue is also a thorny one because of "monetization." Companies that own sites must find ways to make money not just from their sales, but from their operations. This is a situation that has many CEOs biting their nails late into the night. On one hand, they pay a whopping amount to acquire the social media sites because they're sure that if they don't, their companies will be left behind. But on the other hand, they can't figure out how to make money online.

I don't mean to point this out by way of excusing the system, but rather as a form of explanation. Many of the now hot Internet sites depended on investors for enough money to operate. When they sell, the investors get the money, and there are still those jobs that were created. But the real elephant in the room is that making money is far more difficult than any of the Internet cheerleaders want to admit.

So, do you give a cut to the musicians, particularly "the fledgling songwriters and musicians posting original material onto the Web tonight" whose "first legal agreement that they enter into as artists will occur when they click to accept the terms and conditions of the site that will host their music"? It would seem fair, but how do you calculate it? What is the value compared to, say, the amalgamation of posts and profiles that draw people to sites?

I don't have an easy answer. If I did, I'd be making a whole lot of money from knowing it. The one thing that is clear is that the start-ups, even as they get big, don't have the cash resources to pay everyone, and the corporations that buy them do so assuming that the business model of free content is going to remain. Otherwise, they would need to see enough cash to pay people.

We can draw a lesson. Your work may be wanted on the Web, but you can't depend on others to make a living for you. You must do that yourself. If you're going to use a site to promote yourself, either be comfortable with the thought that you'll never see a dime, or start developing business models now that will let you make money. Perhaps you need a link to an online store. Maybe you need people to come to your own ad-supported site. But certainly you cannot depend on others to make your business work for you. That is your job.

Record Labels Keep Copyright Infringement Dollars - Nothing to Musicians

Although it's in the realm of music, I think it behooves any independent creative person to know what's going on in other industries. According to a story in Home Theater, little to none of the millions that record labels have taken through copyright infringement suits ends up in the hands of the musicians and composers who created the works in the first place:

For example, three of the four majors banked $270 million in the lawsuit against Napster (barring Sony BMG, because BMG owns Napster). And all four have made deals with YouTube. But musicians are still waiting for the penny to drop—into their pockets, that is. Their managers and lawyers are now threatening to file lawsuits of their own, this time with the labels as defendants.

Sure, there will be complications of who is owned how much, but the concerning thing is that a) they will take as much time as they can as interest mounts in the bank, and b) the "legal expenses" are eating up most of the proceeds. Now, if they can successfully sue, then they probably registered copyright in a timely manner. That would mean that they could have - and, I'd bet, did - sue for legal expenses. So they get money for legal expenses, and then hold on to all the money for legal expenses? Sounds like the sort of double-dipping that recording labels are known for. Any bets as to whether publishers would be more forthcoming in similar circumstances?

More on Radiohead's Experiment

PaidContent.org has what it claims to be a "concrete analysis" of Radiohead's experiment in letting customers set their own prices. In the first 29 days of October, 1.2 million people supposedly visited the site, though that doesn't say how many people downloaded the music. Of the downloading group, 38% chose to pay, and 62% didn't. Average worldwide price paid was $6, and when you factor in the number that didn't pay, the average payment per download was $3.23. Because we don't know how many are downloaded/sold, it's impossible to know how much money the band has made. For some additional details, check PaidContent.org's sister UK site.

What to make of this? My feelings are ambivalent. Of course not everyone would pay, particularly when the band offered to let people choose their own price, and zero was an acceptable offer. But a good chunk did. The average payment was small, and yet it could quickly add up. Imagine an author getting even $2 or $3 a copy. Now, Radiohead is well known, and those who aren't well known will have a more difficult time getting the sales. But that's generally true even with conventional publishing. Even a relatively small number - in the low thousands - could start generating the type of money that would rival at least the lower end of advances of many of the series books (like Dummies, Idiots, Buffoons, Morons, Chowderheads, Politicians). And the up side would be far more attractive.