MP3

How complex are the moral and ethical issues surrounding copyright nowadays, with all the advances in computer technology? Consider MP3.

MP3 (Media Player 3) is a new format for digital music recording. The MP3 system allows you to make very good digital copies from any CD or "wav" file and copy the file onto your computer, a personal MP3 "player" (similar to a walkman), or… the Internet. A typical three minute pop song, which would take up to 20 megabytes of disk space as a "wav" file, can be condensed into a 3 megabyte MP3 file. There are already thousands of sites on the Internet offering MP3 files for downloading, most of them illegal copies of copyrighted material. There are also a growing number of sites offering original MP3 files, with the consent of the artist.

Many of the users of MP3 offer a thin rationalization for their activities: they would have more respect for copyright if CDs were priced more fairly. They are aware of the fact that CDs are cheaper to produce than vinyl records, yet they cost twice as much. Very little of the difference in cost, if any, actually goes to the artist.

The music industry is absolutely frantic about MP3 and has tried their best to stamp it out. Having failed to convince the courts that it should be banned, they are now attempting to hi-jack it by presenting their own variation of the technology, but with built-in protocols to prevent successive or second generation copies from being made. If history is an indicator, their efforts are not likely to succeed. IBM, Microsoft, Compuserve, and AOL have all fought these battles before and lost.

One is tempted to sympathize with the music industry. After all, don’t they have a right to protect their music? What about the poor musicians, struggling to make a living in his noble profession? Music industry representatives are careful to present themselves as defenders of the poor artists and composers who will be denied their just royalties because of this new form of piracy. Aren’t these workers entitled to a just wage?

To be absolutely blunt about it, I don’t believe that the music industry cares very much about their "poor" artists and composers at all. The truth is that music industry exploits artists and consumers alike. What the music industry is really frightened of is the possibility that artists and composers will no longer need them at all.

Consider the rap group Public Enemy (you’ve probably heard their biggest hit, "Fight the Power", somewhere). Public Enemy recently attempted to post their own songs in MP3 format on their website. However, lawyers for their record company, DefJam, obtained injunctions and shut them down immediately. So much for the rights of the "poor" composer.

Why did Public Enemy defy their own record company?

The dispute centres on the bookkeeping procedures commonly used by large record companies in their management of artists and repertoire. When an artist is signed, he (or they) is given a large advance, and access to a recording studio. The artist is thrilled. He probably doesn’t understand much of the language in the contracts he signs. He probably doesn’t even have a lawyer, or an agent. He thinks that if he has a hit record, he is going to be rich.

The record company, on behalf of the artist, hires public relations consultants, photographers, legal representatives, arrangers, session musicians, and so on. All of these people may in fact work for the record company, but their services are billed separately to the artist, as if they were independent consultants. Many of these charges can quickly become grossly inflated. A manicurist earning $8.95 an hour suddenly becomes an "image consultant" for a shadow company at rates of $125.00 an hour. The manicurist doesn’t see that money, of course. On paper, it looks like the record company has incurred horrendous expenses, and may even be taking a loss on the artist. In reality, if the artist is successful, everybody except the artist—and the real manicurist---will make piles of money.

This system is so pervasive that, according to Billboard Magazine, the average artist who sells 500,000 CDs will realize a net profit of about $20,000, after all the "expenses" have been deducted from his royalties!

Back to Public Enemy, this rap group woke up one day and found out that, after selling $72 million in merchandise, they were completely broke. Like any reasonable person, they wondered how that was possible. Well, their record company, Defjam, explained that, according to their accounting methods, it cost them well over $71 million to sell that $72 million worth of merchandise.

It is not surprising, then, to discover that many successful musicians follow a strategy first employed by Tom Petty and declare bankruptcy after a few short years of "success". The reason they do so is because it is the only legal way they can extricate themselves from the preposterous contracts they naively signed. And it will be no surprise to learn that the music industry is lobbying hard for Congress to pass a new law making it even more difficult for musicians to escape their contracts by declaring bankruptcy.

So, what the music industry really fears is that more and more artists will do what Ani DiFranco did and bypass the music industry entirely. DiFranco records, prints, and markets all of her own CDs, and is doing quite well, artistically and financially, thank you. Once she achieved notable success on her own, including a major story in Time Magazine, the record companies came calling, but she was not foolish enough to succumb to their offers of glittering promotional pieces in Vanity Fair and guest slots on David Letterman.

With MP3, and the explosion of inexpensive recording equipment, it has become quite practical for a new artist to create his own music in the comfort of his own home, put samples out on the Internet, and sell CDs for less than half what the music chains charge, and still make a reasonable profit. You can understand why the music industry is deeply concerned about this new technology, and why the film industry has also taken notice. Without a chokehold on the distribution of music, the major labels would quickly be forced to compete with more and more independent artists and labels.

Where does this leave the ethical listener? Certainly, the basic principle of copyright should be respected. But I believe we should oppose the attempts by the music industry to outlaw or restrict new technologies that threaten their control of music recording and distribution. We should also support balancing legislation that begins to reassert the rights of the consumer, to make copies of music for personal use, to freely copy and distribute non-copyrighted material, and to make "fair use" of copyrighted material in the classroom, library, and for research and study. Above all, artists need far greater protection from the sometimes devious and dishonest practices of the recording industry.

October 20, 1999