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Is recorded music really worth peanuts? Is this the same for any creative work that can be digitally copied? Should anyone be allowed to pass it around and make any money they can from it without asking permission? Who benefits? Is Google music's brave liberator or its partial parasite in all of this? In his meticulously researched and argued recent book, 'Free Ride', ex-Wired and Billboard journalist Robert Levine has delivered the first muscular riposte to the 'Free Culture' movement that currently dominates the public debate on the future of copyright and the value of creativity. As someone with a long career in music both as an artist-songwriter in Everything But The Girl and more recently a record label boss, DJ and radio broadcaster with Buzzin' Fly, Ben Watt is well placed to see the argument from all sides. With the drafting of the new Stop Online Piracy Act in the States making all the headlines this week he caught up with Levine and put a few things to him that were on his mind.

BW: I want to begin with the perspective of the small independent label. When the benefits of online promotion first became apparent it seemed like the answer to so many problems for small labels. The open system of the Internet was perfect for cheap direct contact with fans. No more expensive independent publicists. Smart labels used low-cost mailing lists, fast-moving websites and social networks to seed information, and audio platforms like MySpace and then Soundcloud to bypass radio and get audio heard. The dream was this would lead to increased sales with digital revenue making up for the erosion of vinyl and CD. But for many small electronic and dance labels the dream has turned a little sour. The Internet is a mass of noise. The market is saturated with cheap content and many labels see a hobbled 12" vinyl market and disappointing returns on digital content. What has happened?
RL: That's a complicated question, since many things happened at once, and it's important to look at them separately. When you're talking about slow digital sales - and, to some extent, less profitable ones - much of that is a problem of piracy. Beyond the sales lost to piracy, which can be hard to calculate, the general sense that everything is free online makes it very hard for indies to make good deals with digital distributors. Technology companies basically take the attitude that you should take a bad deal or you'll get nothing, which is a very tough position to be in. For big acts that sell in bulk, like Lady Gaga, making less money on each sales can be OK, since they might make it up in increased volume - despite ideas about 'the long tail,' the most popular music does as well or better on iTunes on a proportional basis than it did in stores. For less popular artists, it's much harder: It's still hard to generate real volume, and the consumer's expectation of low prices makes it hard to make up for that. This dysfunctional market is what's wrong with the Internet. What's right with the Internet is easy, inexpensive direct contact with fans. And I think we can take steps to limit what's wrong with the Internet without ruining what's right with it. The other issue you see is the noise, and I think that's created by the fact that easy, inexpensive direct contact with fans is now available to anyone with a laptop. To me, that's not a bad thing. But standing out means running a smart promotion campaign, and that often means hiring smart people, whether they ultimately use Facebook, make phone calls, or whatever. I think that hasn't changed as much as we'd like to believe. If the goal of promotion is to get noticed, you have to do something that everyone else isn't doing, and that makes having an online presence necessary but usually not sufficient.

Say an artist does a random Internet search of his latest release. It throws up two types of content appropriation. There will be the keen blogger who has posted a downloadable MP3 to show support and 'help promote the track' and there will be the locker services like Rapidshare that display hot new releases grabbed from legitimate online retail sites within minutes of them appearing and offer them for free. How do each of these scenarios affect the artist?
To some extent it depends on the artist and what they want. For artists that can make money touring, promotion from those bloggers could help, although I'd argue that it doesn't help as much as doing their own promotion. Some audiences still like to buy CDs - look at Adele's fans, for example - so this might not hurt as much. For many bands, though, it certainly can hurt. But there are two important differences. First, I think the enthusiasm of well-run blogs does provide promotion, so the cost of some piracy is offset to some extent - and how much varies - by getting the word out. Second, I think bloggers tend to respond to the wishes of artists who ask that they not offer more than a certain number of tracks. Engage these bloggers, offer them certain tracks, and they can be turned into assets. Online lockers sites don't offer either of these advantages. I think downloads from those sites do cannibalize sales, and they don't give artists any way to keep tracks offline. You have to keep sending out takedown notices for the same tracks, since most of these sites refuse to do any kind of filtering, which is just ridiculous.

The last few years has seen a boom in free podcasts and mixtapes where no permission has been sought from the creators of the tracks used. Blogs love them because they increase traffic (and in some cases ad revenue). Fans love them because they find hidden gems and are great for the iPod. The DJ loves making them because they bring acclaim, profile and more bookings. The labels and artist are caught in two minds; good promotion or cannibalisation of sales? What are your feelings on the pros and cons here?
I think it depends on the artist! Some acts set aside a single that's available free online, with the idea that it will generate interest in an album. That can work very well, since the artist can exercise some control in order to optimize the promotional value. Rappers do that really well with mix tapes, which whet fans' appetites for official releases. And there's a tradition of this - labels always promoted songs to radio stations. The problem comes when you can no longer draw a line between what's free and what's not; there's a big difference between giving away a sample chapter from a book and someone else giving away the entire thing. Sadly, I think this is moving toward cannibalization. Years ago, when people still wanted CDs, listening to a low-quality MP3 often served to promote those CDs. Now that digital is the norm, I don't think that's the case anymore. Obviously, free recorded music can still promote concerts, but that doesn't work for every act. Perhaps more important, it's very hard to borrow money against future concert revenue; it's much easier to borrow money against a copyright, which is basically what a label deal is, from a financial perspective. If you're a label, how much are you willing to advance an artist if making your money back depends on him touring in four years? And artists often need advances - to pay for production, to get going as live acts, or even just to get time to write and rehearse.

A lot of people still harbour the view that the record company = bad, and the lone artist = good. Getting free music direct from the artist and then attending their gigs is seen as a way of supporting 'pure' music and 'sticking it to the man' and creating a new power structure enabled by the open system of the Internet. Is there really such a shift in power going on here, and what are the up and down sides as you see it?
I've never really understood the logic behind that, since most pirates stick it to indies and majors alike. How do you determine who's the man - do you only pirate material from companies with a certain market cap? Also, more important, these are contractual relationships that artists enter into willingly! You know, I have a contract with Random House: They gave me an advance that represents a risk to them, since many books don't sell very well, and they take most of the revenue on each sale to compensate them for that risk. If you pirate my book, I don't lose all that much money directly, but it definitely affects my ability to get another deal and ultimately - because working on something for two years costs money - write another book. Random House is my partner. Like all partners, authors and publishers have differences of opinion - the former want higher royalties and the latter don't. But commercial-scale piracy hurts both. As to whether authors and musicians should have publishers or labels, that's a separate issue. But for those who don't, there's an easy solution: Don't sign a deal! Different things work for different creators, but labels of all sizes do serve a valuable function, which is why many artists seek them out.

One of the arguments you make in your book is that if we allow the price we are prepared to pay for music go down to 'free', creativity will dry up, as there will be no money to fund it. Yet there is a new underground of music makers out there. Young artists with low overheads. They see their freedom of expression as deriving from freedom of content. They give away expertly-crafted tracks they have made themselves. They make audacious free mash-ups and mixtapes. They encourage remixes of their work, giving away stems online. The more bootleg copies of their work the better. They don't expect to make money out of recorded music. Kudos is the new currency. They're just trying to build a reputation upload by upload. They make money in day jobs or spin-off night jobs like DJing. Some might even dream of a deal one day or a film role or a fashion line if they build a big enough rep. Meanwhile followers get to fill their collections with a never-ending supply of free quality music. How will paid-for recorded music ever thrive if a climate like this exists?
I wouldn't say that creativity will dry up - I don't believe that. I'm not sure how much money affects creativity, and, to be honest, I'm not sure how to measure creativity in the first place. (I'd like to think I know it when I see it, but it's hard to deal with it that way in a business book.) But I do think that money enables creativity, for lack of a better word. To use a classic example, John Lennon and Paul McCartney were songwriting geniuses. Money didn't make them that way, although it certainly played some role in motivating them. More important, money allowed them to work with George Martin, who had the arranging and producing skills to let them realize their vision. And I'd argue that Martin was more important than Abbey Road; even if you record an album on a Mac, the right producer can still make a big difference. I think the fact that there's a new generation of underground music makers is fantastic. I also believe that a lot of them won't want to stay underground for long, but let's put that aside for a minute. That does represent progress, so I think that professional musicians will have to compete with them - period, full stop. But I think they can! Look at all the free music available legally today, and look how little most of it gets downloaded compared to pirate copies of major label albums. Most of this stuff just isn't that great. Some of it is. But I think professional musicians can compete. I like to say that I want everyone to be able to publish a book - I just don't want everyone to be able to publish my book. That's the difference between fair and unfair competition.

Is culture more important than the culture industry? Does it matter that there is less money to be made in music on the Internet? Maybe the fact that barriers to entry have come down and more people can make stuff cheaply and get seen by thousands is more important. Shouldn't we forget about trying to monetize digital content and instead just use the Internet as a free advertising platform on which to be seen and heard?
I think this is a false choice. As I said above, the fact that barriers to entry have come down is what's great about the Internet and the fact that piracy is rampant is what's wrong with the Internet, and I think we need to separate them. To use a tired metaphor, highways have caused both economic growth and led to deaths in car accidents, and no one suggests banning highways. The answer is to regulate how people drive. Sometimes, we also make laws that affect how cars are manufactured. I don't want to choose between professional and amateur culture, and I don't think we need to.

What do you say to people who say the genie is out of the bottle and there is now a whole generation of young people who aren't prepared to pay for music at any level? Older people with a conscience and a credit card might pay, but you might as well let the younger ones take stuff for free as you won't get them to pay for it. The best you can hope for is that you can turn one of them into a fan of means who then pays later for a concert ticket or an album further down the line, no?
I think many young people don't pay for music, but I'm not sure that's a generational phenomenon so much as part of being young. If you think about piracy, it tends to appeal to those with more time than money - who in the US and Europe tend to be young. Once people get older, they tend to have more money than time. If you apply enough law enforcement pressure to keep piracy inconvenient, what you're really doing is raising its cost in terms of time. At the same time, new online music services are making legal commerce more convenient. There will always be people who pirate everything or almost everything - I've heard estimates of about 15 percent. They may be lost to the business. But that's OK as long as we reduce the amount of casual piracy others engage in.

Some of us baulk at the cost of commercial downloads. Some think prices seem to be set to match the cost of of CDs and yet there are no packaging or manufacturing costs. Infinite copies can be made for pennies. Yes, there are other costs involved in creativity (time, equipment, accounting etc) but at the same time legitimate free MP3s are thrown at us on music blogs and websites, while bands give away free MP3 versions of their albums along with the vinyl or CD version, both suggesting disposability. No wonder consumers are confused. How could we straighten out these mixed messages?
I think some of this confusion has been stirred up deliberately by technology pundits. Media has never been a marginal cost business - even vinyl records simply weren't that expensive to make, and CDs have been cheap for a long time. Media is a fixed cost business - it's expensive in terms of time and resources to make an album, write a book, shoot a movie, etc. That's where the cost is. I think artists need to talk about this and say, look, you're not paying for a silver disc or a download - you're paying for the music. And I think veteran musicians should point out to newcomers that giving away their music online will make it hard for them to charge for it later.

Chris Anderson famously coined the phrase the 'Long Tail'. Do you feel that however hard the labels and artists may battle back against misuse of copyright over the next few years, the fact is we now live in a world where creating and distributing stuff is so cheap and easy that most of us will have to accept selling very small amounts of anything, turning many talented artists who want to make a living out of music into hobbyists?
To some extent, but not as much as some will believe. First, the evidence for the long tail is very mixed. Music is often a shared experience, so people tend to listen to what their friends know and like. We'll always have stars, even if they shine a bit less brightly. Many musicians will sell fewer copies, but I think they'll make up some of the difference by charging more. Experimental music acts will never sell many copies, but many of their fans like them enough to spend more money on their music. When you think about it analytically, it makes no sense that the Lady Gaga album costs about as much as a Wooden Shjips album, just because they were both packaged on silver discs. Lady Gaga might want to lower prices to lure casual fans into buying her music. Acts like the Wooden Shjips might not have that many casual fans, so they might give away some songs and charge more for the rest. As far as hobbyists, I don't think many people are dedicated enough to put that much time into something they don't earn money from, past a certain point. The idea of having a day job and making music at night sounds like the coolest thing in the world when you're 25 and single. To a 35 year old with a family, it might not be all that realistic. I'm generalizing, of course, but I think that's a safe assumption for most people.

For those who believe money can still be made from recorded music they point to closed-system streaming services like Spotify, where the entire history of recorded music in the future will be behind a wall and only listened to 'on-demand' from remote servers generating a small royalty each time for the creator. Is this a plausible business model on its own?
I think this depends on a lot of things, but I don't think it will ever be on its own. Most people will use these systems to listen to all their music. Some geeks like me will use it as a way to find out about new bands and then go out and spend $20 on their vinyl albums. Other acts, like Coldplay and the Black Keys, will keep their new albums off of these services for a few months in order to sell downloads or charge a premium, then add their music once the initial sales rush fades. All of this is tough to say, of course. But I can't imagine a service like Spotify replacing all the other ways of consuming recorded music. If it does happen, it will take a long time. Remember: Digital sales just overtook CDs as a source of revenue in the US this past year! Many people still like to listen to CDs, and there's nothing wrong with that. In fact, for the music business there are many things right with it.

Spotify has many good points, not least in that if offers an outlet for artists who struggle to get heard on traditional radio, yet it has come in for criticism for its low royalty payments. A daytime spin on BBC Radio 1 (the holy grail in a promotional campaign where millions get to hear your song) pays about a £15 royalty. A streamed play on Spotify pays around 0.002p. The discrepancy seems huge, yet in this example, 250,000 Spotify streams will generate around £500, while a spin on a BBC Radio 1 specialist show that garners 250,000 listeners pays about £4. In spite of all the complaints about low income from streaming does this make Spotify look like quite good value after all, especially for artists who might be ignored by radio, or does the fact the Spotify might take the place of an album sale whereas traditional radio might lead to an album sale move the goalposts?
I think it's really hard to say, but it obviously depends on the act. For some acts, Spotify will be fantastic - but not for all. I think the most popular acts might make more money by staying off Spotify or trying to get a premium for their music; if Spotify is basic cable, maybe Coldplay wants to be on some hypothetical version of HBO. And really unpopular acts might find it not worth it because they can't make it add up to much. For acts in the middle, I think it will help. But to some extent I'm just speculating because it's still so new. And the way people use it will evolve. Right now, as I said, I often sample on Spotify and buy on vinyl or CD. Will I stay that way? I think so, but it's hard to know how many other people will.

Spotify seems to be of little or no use as a future for dance labels and DJs. DJ culture thrives on getting hold of an actual copy of a track - vinyl, CD or download - that can then be manipulated (edited, mixed) on decks or laptops. How will small dance labels cope in the future (assuming broadband speeds never allow real-time hi-resolution manipulation of streams in a live context!)?
It's hard for me to speak specifically to the needs of DJs, but I think there will always be alternatives to Spotify - and that's a good thing. If you think about the rise of the CD, which was the dominant music format for about two decades, there were always alternatives - even at the height of the CD, around 2000, there was a small but thriving vinyl culture - and I can't imagine Spotify becoming as dominant as the CD. Beyond DJs, I think a lot of people have a tremendous drive to buy and collect music, not just access it in the cloud. On a purely logical level, this may be impractical, but so is buying a nice watch, now that mobile phones tell time, and look how big a market that is! This might be a small market, but I think the people in it are willing to pay a premium because it's something they care a lot about. For DJs or people who are really passionate about music, the difference between paying $ 15 and $ 20 for a vinyl record isn't ultimately that significant. So I think that market will always be there, although it can be hard for new acts to get into: People willing to spend $ 20 on a record may not do it for acts they don't know a bit about.

I notice that YouTube payments now come through on my record label's titles. Of course it is pennies. 135,000 plays last month generated £100 (0.0007p per play). Do you feel that this shows (i) Google will fall in to line and end up paying out on tracks they have turned a blind eye to in the past even though legally they have a loophole to avoid payment and (ii) that these amounts are the amounts we will have to get used to as the market is now so saturated with music?

The reason these payments are so low is because this isn't a real market. YouTube's negotiation style has always been: We have all your music, so you can either spend a ton of time filing takedown notices to no discernable effect or take our low offer. And, by the way, we don't have any real competition. YouTube pats themselves on the back about the fact that they're paying artists, but it's so low. What's worse is that these prices allow YouTube to sell ads for very little money, which makes life much harder for companies that pay creators more, such as traditional radio and other online streaming services. And then, if you stand up to YouTube, they say you're not interested in the future. Well, many creators aren't so interested in a future that involves 0.0007p! Unfortunately, I'm not very optimistic that this will change - Google has too much power. The minute you complain about YouTube, you're accused of undermining the tool that gave rise to the Arab Spring, even though one thing has very little to do with the oher.

Many fans of free culture argue that music is made of music. Soul music was rejigged gospel tunes for secular audiences. Top 40 hits recycle familiar hooks and structures. Much dance music is built on the re-sampling and subtle disguising of previously recorded loops and beats and grooves. What exactly does copyright have left to protect, are we not just recombining common resources?
On some level, of course, this is true: Every creator is influenced by work that came before his. At the same time, the law says that influence is allowed and direct copying usually isn't. We can spend endless time arguing about how and where to draw the line. But I think it's a bit silly to allow these arguments to question the need for any line at all. Most music fans who listen to 'Paul's Boutique' would say that its samples are sufficiently transformative that the Beastie Boys shouldn't have had to pay. At the same time, most fans who listen to Puff Daddy songs would agree that the original composition is important enough that he should have to pay. It's very hard to draw a line between them in law, and that's part of the genius of fair use - you can decide some of these subjective issues in court. (There are plenty of problems with fair use as well, but this is what's good about it.) I think the same applies here. It's hard to exactly describe the difference between influence and duplication, but most reasonable people know it when they see it. Now, obviously, courts can make mistakes - but I think this is a pretty good system. Also, I think it's important to separate what we might call creative infringement from what we might call commercial infringement. And what I mean by that is, whatever you think about the musical traditions of influence and sampling, none of that relates much to the Pirate Bay. They happen to be covered by the same law, for historical reasons, but one doesn't have much to do with the other culturally. Again, I think this intuitively makes sense to people.

A comedian cannot copyright his jokes. Why should a musician be able to copyright words and notes?
Legally, the reason is that those jokes aren't fixed in a permanent medium. And while that might seem like quibbling, I think that standard has served us pretty well. More broadly, I think it's important to protect things that are most easily copied - especially in the digital world. The value of a joke is mostly in the telling, so I'm not sure how much taking it costs the originator. The value of a song lies a bit more in the song itself - different singers could perform it pretty well - so I think it makes sense to protect it.

How do you answer James Boyle when he suggests in his book 'The Public Domain' that ultimately 'a large leaky market may provide more revenue than a small tightly controlled one'?
I'm not familiar with that argument, but I don't think Boyle is remotely qualified to comment. Remember, he's an academic, so he exists in an ivory-tower world where he's paid a fixed salary, in a job he can't be fired from, at an institution that exists completely outside the market. Now he's obviously a smart guy, and he's right that copyright lasts too long, but why would anyone want business advice from him ? If he really wants to help creators, maybe he could get us jobs like his, so they can have summers off! I like the idea of working nine months a year and telling other people what to do!

How well drafted is SOPA (Stop Online Piracy Act) and what impact do you think it will have?
That's very hard to answer because it's a complicated law that keeps changing almost daily. I think SOPA had some problems, some of which were solved before Christmas and almost all of which will be solved when the DNS-blocking provisions are blocked. At the same time, most of the objections were a little silly - enforcing copyright isn't censorship, and I can't see how keeping the current structure of the Internet the same way it was in 1995 is more important than a body of law that's hundreds of years old. The truth is that most of SOPA's opponents will object to anything that enforces copyright because they hate it on principle or their businesses depend on the intellectual property of others - mostly the latter. And it's important to remember that many of the nonprofit organizations that came out against the bill receive some funding from Google. Again, to be clear, SOPA had problems. But it's important to keep in mind that the goal of the other side isn't to derail SOPA - it's to prevent any kind of law or legal precedent that would protect creators rights.

It's hard to avoid big names from the the arts speaking out strongly in favour of SOPA at the moment. Both Stephen Fry and the comedy writer Graham Linehan ('Father Ted', 'The Ladykillers') have been very outspoken on Twitter this week. Do you feel they are misguided?
There are plenty of aspects to SOPA that one can legitimately dislike, but there's also a great amount of misinformation. It's a complex issue that's not very well-suited for the tone of the modern media, and it's even less well-suited for 140-character Tweets. For example, I would not consider blocking sites like the Pirate Bay to be censorship and neither would U.S. courts, from what I understand. The truth is that the law wouldn't change what's illegal as much as who's responsible for infringement - and the reason Silicon Valley Venture Capitalists are so opposed to it is because they don't want any responsibility at all. To some extent, this is really an argument about corporate liability that Google is hiding beneath a lot of rhetoric about free speech. That doesn't mean there aren't some free speech issues involved, or that there are no legitimate reasons to dislike the law; it's a complicated issue that merits an extensive and serious discussion (which, to be fair, neither side is exactly calling for). But many of the nonprofits who have come out against the law receive funding from Google - and that includes Wikipedia.

Why do you think vinyl is making a quiet comeback?
I can think of two reasons. The first you've heard before: That, in a time when listening to music has become an increasingly impersonal experience, vinyl has a tactile elegance that fans really like. At the risk of being cheeky, the second is that all of a sudden there's more vinyl to buy! I never stopped liking vinyl but five years ago there wasn't much of it shops. Now, you walk into a record shop - there aren't many but I still like going to them - and you see all kinds of cool records that look very tempting. Maybe people weren't tempted by them before because they didn't see them.

Source: www.buzzinfly.com