Music Musings: Apple iTunes, MP3s, and Troubadours
April 21, 2007
by William P. Meyers

Jan and I went up to Caspar (a tiny, unincorporated California community) to see David Rovics play. There were about 40 people in the audience in at the Caspar Community Center to hear David and local favorite Chris Skyhawk. Admission was $10 and I am pretty sure some of the attendees were volunteers who got in free. David is doing a tour that started in Houston and end in Portland, and moving his household furnishings at the same time. You do the math: David is not getting rich.

Apple has made a bag of bucks over the last few years, but otherwise things are tough in the music industry. Most of the independent music stores and even chains that sold music CDs have gone bankrupt in the last few years, notably Tower Records and Wherehouse. A company that operates the f.y.e. stores is the last music chain. Despite branching into video games and movie DVD's, this company is on the ropes. Music CD sales have plummeted year after year in this new millenium. Radio stations that play music are a bit healthier because they have mostly eliminated live DJs by using automated playlists; advertising revenues pay their bills.

Even in the heyday of the big music entertainment companies the class system within the world of musicians was appallingly skewed. Only so many hits could be sold, so only so many musicians could become rich. The rest had to make do with thin royalties, low-paying local gigs or grueling road tours, and day jobs. Skill helped, but it was not enough: you needed connections or luck to make a living. The same with any art that has more people who love it than the market really needs.

Now the big entertainment companies are not as flush as they were a few years ago. They always need fresh material and faces, that is part of the game, but they can't afford as much of the new as they used to.

This is mostly, but not exclusively, because of computer audio files. The first popular format was called MP3. You know the routine now: take a music CD. Used to be to pirate it you used a computer to copy the whole CD. But now you can rip it so that each song becomes an MP3 file. Then you can share that file with a few friends. Or, if you post it on a file sharing network (originally that was Napster; now BitStream is popular, but there are many choices), with thousands of people you don't even know.

Musicians who had not been "made" by the big music companies released music straight to MP3s. These could be played on computers. Then the portable MP3 player was invented. Several companies made these, notably Creative Zen. Liberation from the corporate music system was in the air.

Then came Apple. Apple was on the ropes. Its predatory practices and bad dealings with customers and retailers had made it into a shadow of its former self. Steve Jobs went to the music majors and said: I have a plan to save your asses. Apparently they did not do a background study of Steve. If they had, they would have known it was not their asses Steve was going to save.

The music majors would not release MP3s. They wanted to protect their practice of charging consumers high prices, pocketing most of the money, and giving a small percentage to musicians. Apple's iPod / iTunes system would allow them to sell electronic music files that could not be copied. They hoped revenue from that would make up for declining CD sales.

Steve Jobs got rich as the wealthy elite of America bought expensive iPods and paid $1 per song to download music. But you also have to hand it to Steve's employees: they designed and built a system that was easy for customers to use. It was also impossible for competitors to use. Earlier MP3 music player makers did not have access to the music majors' catalogs. iTunes file format was designed to work nowhere but on an iPod. Apple captured the market and so far has kept it captured.

Which was great for Steve Jobs and Apple stockholders. Apple stock has gone up by a factor of 10, yes 10, since the iPod was introduced. Meanwhile the music majors have done very poorly, DJs are out of work, and stores have gone bankrupt. Because the dark secret of the iPod is that it will play MP3 files. So most music played on the iPod is "stolen." No one makes any money but Jobs and Apple shareholders. Musicians get zilch. The people who record and distribute the music get zilch.

In a new twist to maximizing Steve Jobs' life style he is now trying to sell "premium" song tracks from EMI that don't have digital rights management (DRM) copy protection for $1.29 rather than the old $.99. And get this: the more expensive files are higher quality. For years music lovers have complained about the low quality of iTunes music downloads. Apple vigorously denied the quality problems. But now for $1.29 per song they will solve that problem.

So does that mean if a friend buys an EMI copy-protection free song they through iTunes they can share it with you if you have a player from Creative Zen or Samsung or Sony? Oh, no. Because it will still be in Apple format. It won't be a true MP3 file.

I can't believe EMI fell for it. Signed a second contract with Steve Jobs while standing at the crossroads. EMI will make even less money, but all those zoners with iPods won't be able to "give" their non-copy-protected songs to anyone who does not own an iPod. Peer pressure, anyone? Apple gets richer, everyone else starves.

How much can we starve the music industry before it becomes impossible for even the best musicians to make a living? I don't know.

What should you do? As usual, the big decisions are being made by big corporations; you will not be consulted. But if you have a $10,000 music collection that you paid nothing for (the average teenager does, these days), consider being generous to musicians. Treat yourself to some live performance in your local pub. Hire a local band to play at your birthday party.

If you appreciate music, find ways to give back to the musicians. Ways that don't involve iTunes.

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