By James Pew

At Studio Manifesto we try to be unbiased in how we cover developments related to new music business models. As Refe puts it in his opening paragraph (reblogged below); its “the traditional recording industry on one side and the proponents of the emerging independent DIY models on the other.” Even though our position is firmly on the side of artist driven DIY models, we feel it important to listen to the message coming from the mainstream camp.

In the interview below, Ed St. John, head of the Australian Recording Industry Association, defends the mainstream music industry, and criticizes the many voices of the blogoshpere that as he says “demonizes” his sector of the music industry.

St. John’s two main arguments are:

1) Often the people criticizing do not have a full understanding of the inner workings of big conglomerate music companies. Although this may be true, do you really need to be an expert on how record companies operate to know that their models have more often than not exploited artists and taken unfair portions of revenues? Do you need to be an expert on power generation to know that coal burning power plants are an out moded technology that pollute and should be replaced with innovative non-polluting sustainable technologies?

2) if anyone bothered to come look at the people that work at a record label, and the work they actually do, they’d realize that there is actually a group of quite dedicated people trying to make their artists successful. This is a classic argument that is used by every corporate PR person, from virtually any business where corporate tyranny exists. Its never the people working for the firm…its the corporation itself when you view its activity in totality.

The person putting together weapons at a bomb factory is not necessarily and evil war monger. More likely he or she is an honest hard working person trying to make a living and feed their kids. But it doesn’t change the fact that bombs and other weapons are used to invade other countries (killing in some cases hundreds of thousands of innocent civilians (Iraq for one). So yes the people working as cogs in coporate machines are good, sweet innocent little cogs who do not harbor a trace of malice. However it is not the cogs that people are criticizing, its the machine. So in other words, I don’t buy this argument defending the corporate mechanisms of the established music industry.

Check out what refe from Creative Destruction has to say below:

The new music industry could be effectively broken down into two different camps, with the traditional recording industry on one side and the proponents of the emerging independent DIY models on the other.

The two camps rarely see eye to eye, but in many ways the debate between them is quite balanced. The traditional recording industry has all of the money and political clout, while the independents have the blogosphere and a compelling David vs. Goliath story.

It’s no secret which side of the fence I’m on. I write primarily to independent musicians and those who are building their careers around them. And while I try to focus more on highlighting innovation and finding solutions, I’ve certainly done my fair share of major label criticism.

Today I want to point to an interesting interview conducted by Andrew McMillen on the OneMovementWord.com blog. Andrew has contributed to Creative Deconstruction in the past, and when he sent me this interview I realized that it provides a great opportunity to present a different perspective on the changing music industry.

The subject is Ed St. John, head of the Australian Recording Industry Association (the RIAA of the land down under.) This guy’s basically in charge of the traditional recording industry for the continent. The interview is an interesting change of pace because Andrew is actually quite sympathetic toward St. John and the recording industry in general.

St. John spends the bulk of the interview defending the recording industry against its critics. ”I’m all for discussing issues in a productive way, in a positive way,” he says. ”I love talking about new ideas, new business models, new ways of marketing music. But I just think you have to steer clear of people who are in the business of criticising major record labels for their own gain.”

Of course, the same warning could be given against those who are in the business of defending the major record labels for their own gain, but the point is valid and well taken. It’s good to see the man at the top getting excited about innovation.

St. John also addresses the growing chorus of voices online speaking out against the major label system. “Everyone is entitled to say whatever the hell they like, which is fine, of course.” He goes on, “But I don’t think many people really understand what record companies do; they’re very quick to judge the way the business works, or the way it has worked, without really understanding it.”

I agree that the democratic nature of the internet is both a blessing and a curse. With such a low threshold of entry there are of course many speaking up online who just don’t have all the facts.

These are in many cases some of the loudest voices.

However, there are also many bloggers and commentators who do have quite a bit of knowledge of the music industry. These individuals provide an important service as they represent an alternative to the established system.

Toward the end of the interview St. John gives what I found to be his most compelling defense of his industry. It’s a bit long, but well worth a read:

I think there has been a lot of demonisation of the music industry in general, and major record labels in particular. It’s sort of easy to do. It’s like saying the big Hollywood studios are evil. It’s an easy position to take, because you don’t really have to explain how they’re evil. It’s generalized evil, but if you actually break it down; if anyone bothered to come look at the people that work at a record label, and the work they actually do, they’d realize that there is actually a group of quite dedicated people trying to make their artists successful, which is pretty much the same as in a lot of other businesses.

It’s not like we’re sitting here plotting how to destroy the world, or anything.

A lot of things have changed in the last few years. We, like any business, need to accommodate those changes in consumer behavior and the way that people share, experience and discover music.

It’s quite easy to set up an illegal business model that is based around stealing someone else’s property. It’s quite a lot harder to run a legitimate business, and our challenge is that we run a legal, legitimate business. We have actual agreements with artists that we can’t just change on a whim.

If we want to do something new, we often need to get the artist’s consent. Call us old-fashioned, but we have a business that’s based around observing people’s rights and paying people royalties.

When circumstances change in the way people experience music and interact with it, it’s our job to understand that and respond to it. It’s not as if we’re pretending it hasn’t changed, because obviously it has. Our challenge is to evolve with these different media whilst still running a legitimate business, adhering to those contracts, and paying our artists.

It’s quite challenging to evolve quickly in a rapidly changing market. The music industry today is a very different beast to what it was 10 years ago. There has been a huge shift in focus. I think we all understand how much has changed. We’re just learning to have a different role and provide a different range of services for our artists, and a different offer for a consumer that fits the way people experience music now. That’s obviously a constantly moving target. It evolves all the time.

That last paragraph is an important one. The recording industry is steering a big ship with a small rudder. They don’t have the agility of independent artists and the teams that support them. That’s not necessarily a defense – if your organization isn’t scaled to meet the needs of the business then it needs to adapt. It is valuable, however, to understand the challenges they have and that they are actively looking for ways to meet them.

Now if only we could find away to bring the traditional industry and the independents together to attack the issues they both face with a united front… Unfortunately that doesn’t seem too likely, at least not for now.

from Creative Deconstruction

See the whole interview here.

Technorati Tags: ARIA, Copyright, Ed St. John, file sharing, recording industry

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This entry was posted on Monday, September 28th, 2009 at 9:27 am and is filed under Copyright, Music Business, Music Culture. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.