I recently found something interesting – a record label which releases all of its music under the Creative Commons license. In particular you are allowed to copy the music as long as you don’t make money off of it. One of their strategies? If you rip a CD for a friend and they really like the artist, they will buy the music. I think this is true as I have recently bought “Mmmhmm” by Relient K, “Dichotomy A” by GRITS, and other CDs I could have easily downloaded. Below is a letter written by one of the founders/owners of the record label – Fading Ways which I loved. I will reproduce it and write comments where appropriate.

To: Michael Geist
CC: Toronto Star music writers, General Discussion Forum at Digital

re: “Music licensing would be viable for all” Toronto Star Article by
Michael Geist

Greetings Michael,

Please allow me to introduce myself. Cue the Rolling Stones “Sympathy
for the Devil” please, as the perfect background to the discussion that
may ensue.

I am the managing director of a small (thirty-five titles distributed in
fifteen countries) indie record label based out of Toronto. Having just
been through CMW, where the issues of downloading were a fairly hot
topic, I feel the need to comment on your article, and this issue in
general, since I feel I represent one of the most important voices that
is consistently shut out of the media discussion on the topic: that of
the artists, that is, creators of intellectual artistic property.

I realize that your article, written from the legal stand-point, deals
with the issue from a legal stand-point discussing the legalities of the
matter and encompassing the problems and preoccupations of the IP
owners, meaning the major music publishers.

However, I feel it important to point out that these laws that are being
passed in several countries such as the DMCA of 1998 cannot continue to
pretend to speak for the entire music creator communities the way that
the RIAA/CRIA would like to convince the public. For every major label
release there are hundreds more independent records made, bought and
sold that have increasingly been marginalized by the mainstream music
industry. Our artists sell more records off-stage in Canada than they do
in stores; who accounts for those sales not Soundscanned? Who gives
these artists a voice in the political and legal lobbying for these
issues? Certainly not CRIA. Not even CIRPA, who from what I have
witnessed act like a mini-CRIA when it comes to the issue of downloading.

The first important point here is true. Most artists sell a lot more music at their concerts than anywhere else. These records are not being counted amongst all the other ones out there on Billboard. Although unlikely, some of these could actually be breaking records and we wouldn’t know.

You rightly declared in your article that “For the recording industry,
the equation is simple — file sharing is up and sales are down.” But
this is true only if you swallow the RIAA’s statistical declarations,
which as Bob Lefsetz pointed out on Saturday at the CMW conference, are
as self-contradictory as they are completely fabricated. First of all,
as I’ve pointed out, they are statistics based strongly on Soundscan,
largely ignoring independent music sales; and in their analysis they
also neglected to point out (as Bob Lefsetz asserted) that while Napster
was around, sales were higher than they became later, when the majors
shut down Napster. Lastly, there is absolutely no way to ascertain
whether the people that are downloading music were ever going to
purchase those records – downloading may hurt sales projections, but
whether or not it hurts sales is a debatable and ultimately unprovable
argument. So, to declare in your article that “peer-to-peer networks
(are) tagged as the obvious culprit” is an irresponsible public
propagation of an RIAA-induced myth.

Another great point! Also, as I think he mentions below – the economy is down and music stinks so perhaps THAT is why people aren’t buying – not cause of P2P

The next point I’d like to address concerns the levy on recordable
media. David Basskin, head of the CMRRA, proudly explained at CMW how
complex the process of monetary distribution is – by way of excusing his
agency, and Socan, as to how long it takes to get the funds out to the
creators: it is based on radio play and sales.

Radio play and Soundscan sales, as I’ve said before, completely ignore
the large percentage of music creators. It’s like allowing Cadillac or
Rolls Royce to speak for all car makers.

The recording industry’s claim that “the compensation obtained under the
private copying regime does not come close to covering the losses
sustained by the industry”, therefore, is a complete sham on two counts:
A) Downloading and P2P networks have NOT created any loss for the
independent labels; they are in fact great for business because the net
allows more people to hear music that they would not otherwise know
about. B) Their claim cannot be substantiated anyways, since the only
provable loss of sales have been in their sales projections. A host of
other factors, from the general state of the economy to the increasingly
poor artistic quality of major-label releases, could just as easily be
to blame for the majors’ projections not being met.

This is something we don’t have to deal with in the US, but in other countries people have to pay a portion of blank CD sales to cover “lost” CD sales from P2P. Like he says, this is bogus because it is based on PROJECTED sales (which is good as imaginary) and doesn’t cover indie labels.

Which leads me to another point – and I apologize if I am off-topic
here. From our perspective as an independent label, the measures of
“success” that the music industry adopted during the booming economy of
the 1980’s have revealed themselves to be a non-sustainable business
model, mid-way through the 90s and in the new millennium. Due to
over-inflated recording cost, promotional costs and the salaries of
their large staff and grossly overpaid directors, the major-label
business model increasingly depends on the public to buy records by the
millions, placing the emphasis on the sales figures of the week of
release – much like the film studios’ focus on “opening weekend” gross.
As a result, the major labels tend to focus on the “next big thing”
rather than sustaining and developing career artists. It would be almost
inconceivable for a major to sign a singer/songwriter like Elvis
Costello in today’s business environment, and as a result incredible
talent falls by the wayside.

With the changed economy, and even with their major marketing campaigns,
the major label releases often just don’t live up to their sales
projections, as you’ve pointed out in your article. So, instead of
acknowledging that their business model requires certain ideological
modifications, the industry has chosen to point the finger at the
consumers, aiming to blame them for not buying a million records in the
week-of-release the way they used to in the 80s. Comparatively, in the
70s, when Pink Floyd put out a record, 50,000 sales in the first week of
release was considered a success. The recording industry refuses to
accept that times have changed, and with the arrival of the internet as
a new technology for down-loading they have found the perfect scapegoat
as to why their business model isn’t doing as well as it used to.

Again, perhaps it isn’t our fault they aren’t selling well!

I mention all this because it is of great importance for lawyers such as
yourself to be aware of the complete picture concerning this issue. When
you make the claim in your article that “The recording industry has made
significant strides in recent months in offering new choices to
consumers” what remains unspoken is that, with the legal assistance of
their lawyers and lobbyists, the RIAA have in fact highjacked the
concept of copyright to suit their own purposes – I call it cultural

Copyright was originally meant to offer a fair protection of 14 years to
an inventor or creator of a work. Furthermore, as it concerns music
publishing, the concept of copyright was used by tin pan alley
publishers and later, artists like the Rolling Stones and Led Zeppelin,
as the legal foundation by which cultural commons songs as well as the
IP of black artists were STOLEN from them. Does Chuck Berry get paid
every time Keith Richards plays one of his guitar licks? Did Led
Zeppelin ever really pay fair royalties on “Travellin’ Riverside Blues”
or the host of other blues songs they ripped off?

The point here is the exposition of the inherent hypocrisy of the RIAA’s
position. Music is culture. Culture is free – it is the zeitgeist of our
existence. Hence, from where I’m standing, DOWNLOADING IS NOT THEFT. It
is only theft because lawyers and lobbyists have wrongly made it so.
Keith Richards wasn’t wrong to play Chuck Berry licks, nor should he be
paying for them – what he shouldn’t have done is register them via his
1960’s publisher, Abcko, as being HIS. He did not author them.

Your suggestion of a “blanket licence for peer-to-peer users that would
effectively legalize music file sharing” may seem like a good idea
amidst the mainstream debate, but ultimately it adds insult to injury in
the historical context of all that is wrong with the music industry. In
a perfect world, the dinosaur that is the music industry should accept
its unsustainable position, apologize for the lawsuits, and accept that
consumers HAVE THE RIGHT to sample before they buy – that is the essence
of P2P file-sharing. People that hear music they like will certainly go
out and buy those records if and when they become fans of the music.
Real music fans want to have records in their shelves, in their
collections. The only exception is “fans” of disposable music, who are
becoming increasingly aware that $20 isn’t a fair deal for records that
only contain one or two decent tracks.

You write, “To be both fair and effective, a blanket licence for
non-commercial file sharing would need to provide full compensation to
the recording industry for the losses it incurs due to the file sharing
activity.” I trust I’ve made my position clear, as the director of a
growing indie label as well as an artist: To be fair and effective, file
sharing must be free and legal. The recording industry I’m a part of
does NOT suffer from file sharing activities.

To the majors I say: Sign better artists. I assure you your sales will
increase with legal P2P. To radio I say: If you want to increase the
amount of listeners, play a wider spectrum of music and move away from
corporate payola and/or guidelines from parent companies like
ClearChannel, who are admittedly in the business of selling advertising
and not in the music business. To artists I say: embrace Creative
Commons and denounce the CRIA stance – it does not speak for your interests.

And to the lawyers I say:

While the traditional model of legal ethics dating back to the
institutionalization of law as a profession in the late nineteenth
century dictates that lawyers have a professional responsibility of
neutral “zealous advocacy”, I would advance the notion, seconded by many
law students in our country’s law schools, that lawyers MUST move
towards a more ethical, sometimes referred to as “contextual”, mode of
practice that would place what is morally correct and historically
appropriate ahead of the interests of corporate paymasters like the
major labels. (Special thanks here to Ioana Bala, U of T law, for her
excellent essay on this subject).

Speaking of students, your suggestion that undergraduate students be
charged $8 a month for culture that should be free – as it has been
historically via “fair-use” home-taping and sharing – is absolutely
preposterous. Cut to the ridiculous: when will corporations start
charging for the air we breathe? Coca-Cola Co. is already charging us
for our tap water (Dasani). When will lawyers, being in such a prominent
position of policy-making power in our society, begin standing up for
what is right instead of what is profitable?

You write,
“Consumer demand for music online is clearly here to stay. What we need
now is a solution that allows all participants in the process, including
the record labels, creators, consumers, and ISPs to benefit.” Did you
really mean, ALL participants??

It’s time we start listening to the voices and interests of the creators
and the consumers, because, quite frankly, the record label’s (majors
that is, no one ever talks about the independents) constant PR spin on
this matter is as substantiated as governor Bush’s WMD Iraq claims.

Neil Leyton