If there’s one industry that is poised on the precipice of destruction in a time of financial crisis, I’d predict it’s record companies that are about to imitate the myth of lemming suicide.

Good Morning Lemmings! (pic by Snowrunner - CC Licence)

I’ve been thinking about it for a while, and I’m not the only one, as Jamie Burke’s presentation shows (hat tip to Dave Cushman). Or the sometimes profane and provocative Bob Lefsetz, found via Seth Godin.

But the biggest proof that the record industry is a blinkered carthorse in an electronic age comes from Doug Morris, the CEO of Universal Music Group, who have a 32% market share of the legally provided recorded music sector (Notice how specific I have to be for clarity!). From an original interview in Billboard, Rafat Ali wrote about the comedy highlight on the Paid Content blog.

Now, to be fair, Doug does make some sense, and even promotes the fact that a good product is essential:

“There are certain rules in the business that never change. Now, you get people who enter the business at later stages in their lives who never believe that. They believe that if you get a record played a lot, it’ll sell more . . . it’s all nonsense. If you get a hit record played three times, it’s like it lights up, it’s like magic.”

And considering his success so far, that’s a pretty good endorsement of getting a good product out there for people to pick up and run with. But then it goes horribly, horribly wrong:

On RIAA lawsuits:

“It was an act to try and publicize that this is stealing and this is wrong. That’s one way to look at it. Did it work? I don’t know. Maybe it stopped some people from stealing, maybe it didn’t . . . Did they deserve to get caught? Probably. People don’t like policemen. I understand that. And maybe they’re right. But when you see all the stores close and you lose half your employees and you can’t sign bands to record them because people are stealing, we do things to try and stop it. You have a lot of people who think that things should be free. I don’t know how they think we should produce it for free, but there’s a lot of people who aren’t logical.”

If you want to know how a free business model works, speak to Chris Anderson! And then it gets worse…

“What I take seriously is the fact that we’re people who create art. Whether you like our art or not, it’s what we do. My whole point of view is this problem we’re in, which is caused by technology, will be solved by technology. Some genius on the other side will figure out how to stop the piracy that seems very logical to me.”

I’m not sure how good you have to be at business for it to become ‘art’, but I’m fairly sure the creators of art in the music industry are generally musicians, producers, video directors, graphic designers etc. I’m also sure I haven’t seen an Excel spreadsheet on display, even in the Tate Modern.

The only possible way that technology might be able to have a serious effect on digital piracy is if it’s supported by a totalitarian government and an army of state workers monitoring everything you do online *ahem* China *ahem*.

For anecdotal evidence, somewhere in my possession is a bootlegged cassette, a pirated vinyl LP, and my favourite, a pirated triple CD boxset with a hastily printed booklet inside! Strangely I don’t have any illegal MP3s that I know of, because I made the conscious decision to support bands that make them available legally for free, and to listen to the rest via Last.fm or similar alternative.

This ‘War on Piracy’ will be about as effective as the ‘War on Drugs’ and the ‘War on Speeding’. So not particularly effective at all. Mainly because it’s not going to have an effect on the mass populace who are shaping the entertainment industry in the way they want it to be usable for them – and the mechanisms to do this have become far, far more accessible and easy to use than in the 20th Century.

That’s why free music is provided by Nine Inch Nails, Radiohead (for remixes), Marillion, Everclear, etc. (I’m not including bands making freebies available for a limited time, like the Charlatans. Or the 1000s of great individual bands and musicians just making stuff free.

In fact, as I tenously looked for historical examples to make myself seem more intelligent, the Prohibition sprang to mind.

• It gave rise to gangsters including Al Capone, who had 10,000 outlets in Chicago alone. And we have a booming business in sites offering illegal downloads, alongside P2P software.
• Cost of enforcing Prohibition was high. By the same token, the cost of protecting the Recording Industry (i.e. record companies) is high enough to need increased royalty rates, targetting online radio by jacking the rates as high as possible.
• The benefits on Prohibition were always debated. Some doctors even prescribed alcohol for certain ailments. By the same token, the merits of targetting individual downloaders are an often-argued topic.
• Prohibition became increasingly unpopular during The Great Depression and was repealed in 1933. At a time of economic crisis and personal expenditure on entertainment evaporating, could this be the end?

There’s a future for musicians – the ones that create everything.

There’s a future for music producers, video directors, graphic designers, make-up artists, recording engineers, lighting engineers, music shops, guitar builders, etc, etc. All the people who provide tools, or add value within the music creation and distribution process – although some might find their options are reduced.

There’s a future for music distributors and influencers – Magazines (phew!), Radio, TV. And Internet Radio, Online Video, Blogs, Forums, Fan sites, Fanzines, Official sites, MP3 providers.

What I can’t work out is how the value that Record Companies offered (Up front money effectively ‘loaned’ to artists, and contacts at broadcast media) are now essential, or even important.

Can anyone help explain it to me?

(Funnily enough, I’ve been listening to great music during writing this. All on Last.fm!)