Thin Line Between Stupid and Clever

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Pete Townshend’s Misguided Attack on the “Digital Vampire”

Have to disagree with Pete on this one

In a recent lecture legendary guitarist Pete Townshend had the following to say about iTunes:

“Is there really any good reason why, just because iTunes exists in the wild west internet land of Facebook and Twitter, it can’t provide some aspect of these services to the artists whose work it bleeds like a digital vampire, like a digital Northern Rock, for its enormous commission?”

The “services” that Townshend is referring to are services he claims traditional record labels and music publishers have provided to young acts in the past, such as editorial guidance and “creative nurture.” Leaving aside what you may think of iTunes as a software program (it is horrible!) or Apple in general, Townshend could not be more far off base in regard to the responsibility of digital storefronts to artists or the opportunities the digital marketplace provides for artists both young and old.

There is no denying that Apple is 800 pound gorilla in the world of digital music. iTunes accounts for 75% of all digital music sold, and Apple takes a significant commission out of ever song sold. Reports have Apple earning 30 cents for ever 99 cent track sold through iTunes. The same report has record labels earning 53 cents per the same track with the artist earning only 9 cents. Should the artist earn more than 9 cents per track sold? Of course, but that isn’t totally, or even mostly, Apple’s fault.

If you look at the three main parties in the transaction, which of the three appears the most irrelevant? The artist is obviously necessary for the music to be made at all. Apple (or any other digital storefront) is necessary for the consumer to purchase and download the music they want. That leaves the record label. What service are they providing? Townshend argues that labels traditionally provided various support to cultivate new artists. Forgetting all the mistreatment that record labels provided to artists over the years, shouldn’t they still be providing the same services. The labels still receive the largest share of each transaction sold through iTunes, so shouldn’t they be the most concerned with cultivating new talent and ensuring that talent is properly marketed. Why should Apple be responsible for ensuring talent is properly developed when they are not the ones who signed and published the music in the first place? They shouldn’t.

Justin Townes Earle is but one of many artists I've discovered through digital music services

The other, and more important, component that Townshend gets wrong is the tremendous opportunity that the digital marketplace provides to new artists by allowing them direct access to the fans. Before digital music, music fans were essentially forced to listen only to the artists that the record labels decided were worth listening to. Sure, if you lived in NYC or L.A. you could discover acts on your own, but in a small town, forget it. Now all it takes is a few clicks through Amazon, iTunes, Spotify, or any number of other services and the consumer can discover any number of acts they may have never known existed. I’ve discovered many of my favorite current acts (Justin Townes Earle, Dawes, Deer Tick) by simply clicking through “related artists” listed on Amazon or Spotify. Would I have ever discovered them while browsing through Tower Records? Maybe, but it certainly would have taken more effort.

The counter-argument to the above is that greater access to more artists only leads to greater fragmentation of the market, which in turn, leads to less sales for everyone. I largely concede that point, but I don’t concede that it’s necessarily a problem. Record sales have been dropping for years while touring has been the place artists and labels turn a profit. Fragmentation allows more artists to put together a successful tour. The days of the huge stadium tour may be coming to an end, as fewer bands have huge mainstream success. In place of 3 to 4 U2 size stadium tours, we may have 15-20 artists going on club or music hall tours. This allows more artists to tour and reach their relatively smaller fan base, but these are artists who would have been forced to tour on their own on the bar circuit in the past. Digital discovery has allowed them to take a step up. Despite how Townshend feels, this isn’t a bad thing.

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