OK Go explains the screwed-up state of the music industry

Damian Kulash of the band OK Go has published a tremendously informative, frustrating, and important open letter about the reason that the band's videos can't be embedded on sites like this. OK Go rose to prominence on the strength of its viral Internet videos, but now EMI, its label, won't allow embedding for its videos, because no embedding is possible. Kulash is clearly frustrated by this impasse, and his ruminations on how the industry got to this place and where it might go are required reading:

The catch: the software that pays out those tiny sums doesn't pay if a video is embedded. This means our label doesn't get their hard-won share of the pie if our video is played on your blog, so (surprise, surprise) they won't let us be on your blog. And, voilá: four years after we posted our first homemade videos to YouTube and they spread across the globe faster than swine flu, making our bassist's glasses recognizable to 70-year-olds in Wichita and 5-year-olds in Seoul and eventually turning a tidy little profit for EMI, we're - unbelievably - stuck in the position of arguing with our own label about the merits of having our videos be easily shared. It's like the world has gone backwards.
Let's take a wider view for a second. What we're really talking about here is the shift in the way we think about music. We're stuck between two worlds: the world of ten years ago, where music was privately owned in discreet little chunks (CDs), and a new one that seems to be emerging, where music is universally publicly accessible. The thing is, only one of these worlds has a (somewhat) stable system in place for funding music and all of its associated nuts-and-bolts logistics, and, even if it were possible, none of us would willingly return to that world. Aside from the smug assholes who ran labels, who'd want a system where a handful of corporate overlords shove crap down our throats? All the same, if music is going to be more than a hobby, someone, literally, has to pay the piper. So we've got this ridiculous situation where the machinery of the old system is frantically trying to contort and reshape and rewire itself to run without actually selling music. It's like a car trying to figure out how to run without gas, or a fish trying to learn to breath air.

Open Letter From OK Go, regarding non-embeddable YouTube videos

Previously:

I write books. My latest is a YA science fiction novel called Homeland (it's the sequel to Little Brother). More books: Rapture of the Nerds (a novel, with Charlie Stross); With a Little Help (short stories); and The Great Big Beautiful Tomorrow (novella and nonfic). I speak all over the place and I tweet and tumble, too.

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Tom Hale

Hasn’t it been proven that any exposure is good exposure in the music business? The more people see OK Go’s videos, the more they’ll want to buy their music.
http://www.musicmarketing.ie Anonymous

EMI must realise that 2010 will be the year that social media-fueled technology and behavior is responsible for more content consumption choices than ever before! The value placed on ad revenue from music videos far underweights that of social interaction and peer distribution!

Stephen
http://musicmarketing.ie/?p=241
GTMoogle

Coincidentally, new techdirt article:
http://techdirt.com/articles/20100119/0354137811.shtml
“Time To Recognize That The Recording Industry Is Not The Music Industry”
Baldhead

Electronic musicians and DJs are not synonamous. Most DJs have never produced a track that anyone wants to hear. Some of the more successful producers tour doing dj sets of their own music, but it’s hardly the norm. And finally there’s so many people calling themselves a DJ these days that actually making a profit from it is fairly rare. Most folks get enough money to buy newer records and a few beers and that’s it (kinda like most indie bands really)
pixleshifter

i think musicians are going to have to get used to the (not so crazy) idea of earning money by performing live.
your album should be your advert, and adverts are free. you can sell the plastic discs with the pretty sleeves to collectors at your concerts, there’ll always be a market for that.
cosmorphis

You can give it away, and hope it ends up in a video game.

“[Their] version of Guitar Hero generated far more in revenues than any Aerosmith album ever has…. Merchandising, concert sales, their ability to sign a new contract [have] all been unbelievably influenced by their participation in Guitar Hero.”
BdgBill

This kind of thing will continue until the old farts running these companies who have never touched a computer in their life die off or retire.

The same goes for judges who make ridiculous decisions regarding tech and copyright. You may as well ask your grandma what she thinks of Halo 3 as ask these guys to make informed decisions about a technology they have never used.
- das memsen
  
  my grandma wasn’t too keen on the weapon assortment for Halo 3. She claims the original Halo had a better feel for ammo.
GTMoogle

“hard-won share of the pie” Hard-won, in so much as a petulant child screams until someone gives him a cookie.

“The thing is, only one of these worlds has a (somewhat) stable system in place for funding music and all of its associated nuts-and-bolts logistics”
Bullshit. The music industry is making more money than ever. The system of making most of your money on plastic discs is DEMONSTRABLY UNSTABLE. The rest of the industry seems to be doing just peachy on its own, better overall, in fact.

You don’t even NEED a label to succeed anymore. Not just an independant label, none at all. Artists are succeeding that way now when they never could before.
They essentially ‘hired’ EMI to do a job that they’re failing to do. The only piper to pay here is for artists to either do the legwork themselves or hire someone competent to do it.
- El Stinko
  
  Not sure where you are getting your information that “The music industry is making more money than ever.” Even with the explosive growth of downloadable albums the revenue is way down from years past. http://www.nytimes.com/imagepages/2009/08/01/opinion/01blow.ready.html
  
  That isn’t to say I approve of the way the music industry is run, I don’t, I’m just sayin’.
  
  I do like the new OK Go! album, and this video is really good. Apparently shot in a one long take (although I suspect they made an edit there when the camera panned around).
  - GTMoogle
    
    http://www.techdirt.com/articles/20090723/0351345633.shtml“Let me repeat that: despite all of the whining and complaining about the state of the music industry, some of the music industry’s own economists are admitting that the market is growing.
    
    Not surprisingly, it found that retail product sales have declined, but the other parts of the industry have grown noticeably more than the decline in retail sales. This growth has come from a few sources. Live show attendance has increased more than retail sales have decreased. Consumers have actually spent more. On top of that, the business to business side of the industry (sponsorships, licensing, advertisements, etc.) has grown as well, opening up new and lucrative means of making money.”
    
    Read the whole article for the gotchas. Also, this is only about the UK.
    
    In general, I think we’ve let the people with outdated business models have too much leeway in guiding what we call ‘the industry’ and how it works. They were a big player, but they’re not adapting, so ditch them. They really aren’t necessary, and yes, there are alternatives out there who know how to play in new markets.
    - El Stinko
      
      Thanks for the link GTMoogle. It’s an interesting contrast from the infographic from the NYTimes. The big difference is that it takes into account the revenue from live shows, and that is generating more revenue. Which is fine but I think it may confuse the point of Damian’s post, which is really related directly to the costs and returns of producing and promoting sellable music.
      
      I hear a lot of criticism of the music industry for not moving away from an obsolete business model, but I don’t hear a lot of viable alternative solutions for selling music. As Damien rightly states, it takes a fair bit of money to produce and distribute an album. I suppose OK GO! could take a loan out from the bank and do all the business and promotional work themselves, but that’s not really changing the business model that’s just taking more of the responsibilities onto themselves. In the end, the label *does* provide a valuable service (even if they demand too much in return).
      
      In the end, the only thing broken in the business model is that the industry is over inflated by revenue generated from selling CD’s. There may not *be* a viable business model that will allow that level of revenue anymore, and the industry is going to have to shrink. The new business model is “submit and accept your fate,”
- Anonymous
  
  “You don’t even NEED a label to succeed anymore. Not just an independant label, none at all. Artists are succeeding that way now when they never could before.”
  
  ok, take it as read i believe you, so can you find me say, ten, of these self made artists, making a proper living from their music that haven’t had the massive push of a label behind them for the first few albums. you know, making them videos, getting them airplay (which for the most part, excepting internet stations which don’t as a rule pay for plays, still rely on playlists and radio pluggers).
- g.park
  
  If you want to ever get to the point where your music is self-sustaining (or *ever* get to the point where your music sustains you), you need to be performing. If you want to perform at the kinds of venues that can pay you (at smaller venues & DIY venues you’re lucky to get gas money), and put you in front of enough people to grow your fanbase, you need representation. Booking agents at most clubs get piles of submissions every week from bands who want slots (and the booking agentis usually also the bartender and/or the sound guy, and/or the bouncer…). If you want to play these venues, you either need an “in” with another band who’s already on the bill, or you need to be working with a promoter who has an “in” with the venue.
  
  You can try to do all of that yourself (goodness knows I do), but there’s only so many hours in a week and you still have to go to work in the morning. The “viral video” success might work for a cute girl with a ukulele, but even then, it’s only a start. Telling a venue “My YouTube video has 400,000 views!” does not mean nearly as much to them as “I can guarantee a 40-person draw.” And that guarantee sounds a lot better when it comes from a promoter, rather than another band with a MySpace.
  
  BTW, this is the part of the comment where I do the dirty work of the DIY musician and pimp out my DIY music.
  - Brainspore
    
    If you want to ever get to the point where your music is self-sustaining (or *ever* get to the point where your music sustains you), you need to be performing.
    
    Live performances are great, but where do electronic musicians who don’t have the ability or inclination to put on a live show fit into this model? How about songwriters and composers? Not an attack, just curious.
    - das memsen
      
      Composers are certainly not making any money, unless they’re the .001% with a big name. New classical music composers get a commission here or there to spend weeks composing a piece that’s going to be heard twice by 20 people in a room. Good times!
      
      But that’s just the reality of things- nothing to whine about, other than to accept it. There’s no reason why anyone should make any money doing anything. If you do, you’re lucky, but it’s not a right. Make your music, figure out a gimmick, shmooze, tour, whatever you think works, and expect nothing but be grateful for the lucky breaks. That’s pretty much it.
    - cymk
      
      Well, I’m pretty sure composers don’t have to worry too much about money. For example, when John Williams scoring the next blockbuster he’s out conducting orchestras. If I had to guess the situation would be similar for other composers. As for song writers, those who write music just so other people can play it, I don’t see them going hungry either (think of the horde of talentless pop singers whom do nothing but look pretty and try to sing/dance, someone has to write their music and that someone is making a mint).
      
      Now for electronic musicians (no by electronic I assume you mean techno and/or variations of), have you ever been to a club? DJ’s are your “electronic musicians” and I’m pretty sure they can make a bundle for a few hours mixing music on turntables or a computer.
      - Brainspore
        
        “Composer” and “conductor” are not synonyms, nor is John Williams a typical example of the financial success that a person of either profession can reasonably expect to obtain.
        
        I’m well aware that many electronic musicians do live DJ/mixing performances but those aren’t the people I was talking about either. I mean someone who composes an entire piece in the computer and doesn’t have the ability or inclination to perform a live version of it (say, some GarageBand genius with cerebral palsy). Shouldn’t there be SOME business model that allows that person to make a buck off their work?
      - cymk
        
        My example with John Williams was simply that most composers already have a musical background. Whether its the RZA composing a soundtrack or some random guy, Vivek Maddala for example (who has composed music for some wretched films) studied jazz in school. I’m sure Mr. Maddala isn’t making anything near what Mr. Williams is making, but I’m pretty sure Mr. Maddala isn’t homeless and living under an overpass either (ie: he makes enough to survive).
        
        Now for the electronic musicians who don’t have the ability to go out and preform, I can only imagine that they are trying to market themselves out to local clubs (or record labels) by sending demo tapes(sorry, cd). If they aren’t trying to market themselves then it is their own fault for not making money off their talent. I’ll even take your genius with a disability like cerebral palsy; said kid should have people around him whom (hopefully) would recognize his talent and put some of his tracks online for sale (yes there are plenty of places you can sell mp3s online with or without DRM. Hell he could even do via their own website. Its not as hard as you make it out to be). Foregoing that, the cerebral palsy kid could send in a demo cd to a record company like every other aspiring musician out there.
        
        So no, self promotion won’t instantly make you millions (no record exec handing you a big fat check to sign away your soul) but using youtube and other video sites you can become famous and if you have a recognized sound its easier to see yourself to do shows (sure clubs are less likely to pick you up as a head liner, but I’m sure they will sign you on as an opening act. Hell, most clubs ive been to would let just about any band in as an opening act, regardless of how bad you were).
        
        Now considering their youtube fame, and that alone (assuming they were not signed on to EMI or any other record company), I would bet they could sell approx 100 tickets in most large cities they went to. I know that doesnt sound like much, but when your going off your internet fame alone, that is something.
      - Brainspore
        
        I’ll even take your genius with a disability like cerebral palsy; said kid should have people around him whom (hopefully) would recognize his talent and put some of his tracks online for sale (yes there are plenty of places you can sell mp3s online with or without DRM.
        
        I agree, and that was exactly my point- that it is and should be possible to make a reasonable amount of money from music without relying on live performances. Other commenters seem to believe differently.
      - splatocaster
        
        @17, what das memsen said. As someone “working” both sides of that particular musical fence (rock guitarist, “new music” composer), I can report that I’ve met with about equal success on both fronts. Which is to say I haven’t given up my day job. Which has nothing to do with music.
murrayhenson

It’s nice that they allow embedding because the same version of that video on youtube isn’t available in my country (Poland). I’d never heard of them before now and would still have never heard of them if it wasn’t for the embed. Off to iTunes to buy the video.
Anonymous

It’s just not the embedding:
“This video contains content from EMI. It is no longer available in your country.”

EMI content cannot be viewed anymore in Finland or Estonia at least.
jesseewles

Go independent dudes. All that note needed was a paypal tab for people to send donations.
LX

At the moment there are 4 major labels who share the same mistakes when it comes to the internet. What we need is either the labels to reconsider their position (improbable) or some smart people to replace them by providing financial, productional and organisational services for musicians, thus rendering the labels obsolete. Those smart people may already be out there.

Greetings, LX
schmod

I met Damian and his bandmates at a show almost 5 years ago. All of them were really nice guys, and definitely still in the “I can’t believe anybody’s coming to see our shows” stage of their musical career.

I can’t help but say that I’m disappointed to see them on a major label, given that they had all of the ingredients necessary to be a successful independent band.
cymk

The record labels need to adapt to the new market, rather than try to squeeze what they can out of the market with their old business model. A new, and possibly future business model of record companies would be that of a PR/marketing firm rather than a producer of music. All you really need them for any more is to advertise to the public to let them know who “Rock Band A” is as opposed to “Rock Band B” and why you should by music from and go to the concerts of “Rock Band A.”
glace neuf

loved their first big video where they were jumping around on treadmills and love this one even more. the best part is that the MUSIC is also good! i hope these guys figure out whatever they need to figure out – they deserve success!
yasth

It is easy to say manage your own selves, and to that be true, but really they are already musicians, choreographers, video directors, and you want them to add a few dozen more roles to the mix? The simple fact is lining producers up is hard work, getting distribution for a private release is hard work, and doing it on the cheap (because hey by itself a 40 million view youtube video will get you something like $800) is even harder. So they sign on the dotted line so they can do what they want to do, because they probably did not decide to start a band to argue with a pressing company that the artwork is being inserted wrong or what not.
jeligula

The problem with GTMoogle’s reasoning is that becoming well-known through viral video is all well and good, but the money to be made for the band comes through secondary sources and sometimes not at all. There is no perceived value to the music anymore, as people now think they can download whatever they want, whenever they want. My brother still buys CDs to this day simply because his actions with the CDs cannot be digitally managed by anyone but himself, and this gives them value to him.
- GTMoogle
  
  “the money to be made for the band comes through secondary sources and sometimes not at all.”
  
  Yes, exactly. If you actually try to work with this instead of bemoan it, you can increase the secondary sources and avoid the ‘not at all’. Use shared music to sell to people who want it. Sell t-shirts. Sell subscriptions. Sell tickets. Sell album art that comes with the CD. Sell previews of new stuff. Sell community. Sell different form factors.
  
  Yes it’s hard work. You can learn to do it or find someone that knows how. Yes, they’re out there, they’re just not the biggest players who try and tell us all that only the big old players are ‘the industry’.
Anonymous

It seems to me that allowing free streaming over the internet supported by advertising is a pretty decent new business model. You can always link to the video instead.
das memsen

Major labels are one thing, small indie labels are another, usually run by 1 or 2 people. Labels, as others mentioned, are helpful for those who really just don’t have the energy or personality to deal with the extra business shit that has nothing to do with making music. Nothing wrong with partnering with someone and splitting the till. I love the DIY idea of doing it all yourself, but that’s not THE only way to do it- it has pros and cons, as do other methods.

But you can definitely sign up with a smaller label that doesn’t have the marketing muscle of EMI but still has some muscle, enough to give you more exposure and a small buzz you can build on. OK GO could have done this, and should STILL do this as soon as their contract is over.
hbl

Man, the use of ghyllie suits was amazing. What a great idea, cos it looks like they just appear out of thin air.
yri

“All the same, if music is going to be more than a hobby…”

Why should it be? I find the music made by my friends and I to be much more fun and fulfilling, even if it is very rough by today’s entertainment-industry standards.
- benher
  
  I’m right there with you.
  
  I also feel that the expectations of aspiring “career musicians” are completely out of proportion with reality… and that those parallel expectations of the record industry are 1000x worse.
greengestalt

I’ve said many times in many ways, we have a change coming. It’s an actually good one since the outright theft from the American people by the big companies has taken so much disposable income, other big companies like the record companies are suffering. That’s why they are actually suing people versus just threatening to or getting injunctions.

But we can change the industry. A century ago, more or less, when it became feasable to record and mass produce music, movies, art, etc. 95% of all that class went out of business. Why hire a musician when you can play a record at 3am? And the gateway was controlled like a dictatorship by those that owned the “Means of Production” Now they cry new technology “Steals” their music… Fair’s Fair…

But, we don’t want the musician to go bankrupt. Only the big company. We don’t mind our favorite rock star getting rich, or at least not having to answer to a boss, it’s our own fantasy after all. The mega rock star surrounded by cute young groupies is a “Rich Elite” we “Vote” for versus a CEO that slashes salaries and moves jobs overseas.

So, the need is for an ethic where people work out their “Enteratinment Budget” and spend it directly to musicians/bands/artists they LIKE, directly. All music, theatre, etc. is a form of “Busking”, the big companies have forgot that. If you toss $1 or $5 into the tip jar of a guy playing a flute on the street corner or a beat poet, you pay them far more than if they were a “Pro” and you bought their $18.99 CD. Today’s computers have proven an “Equalizer” to digital music production. An ancient MIDI keyboard you can buy at a used shop for $40 ish with a MIDI bridge and $50-a few hundred in software is as good as thousands in “Pro” keyboards, recording software, mixers, etc.

1. Find and support artists directly.
2. Encourage “Fair Use” of copyright, where things like fan YouTube videos (with credit) are boasting points, not lawsuit bait.
3. Don’t buy corporate music as much as possible.
4. Don’t “Steal” it, especially #3. A bank robber in his own way supports “The system” in that he agrees with the banker the value of the money in the bank. A true radical gets people to barter.
5. Encourage Radio to stop using “Paylists”. Right now they are having a fight with the RIAA over royalties. There are tons of independent acts that could replace the whole spectrum overnight. They should play from this, then in the future only play based on DJs, based on requests and reviews…
takeshi

Interesting read, although I think some of the views are a little poorly defined.

“All the same, if music is going to be more than a hobby, someone, literally, has to pay the piper. ”

This isn’t always true. There are plenty of folks making music today, not as a hobby, but not as a business, either. They make music because they genuinely enjoy doing it, with no expectation of ever making a serious living marketing their work. Jazz musicians, classical musicians, noise musicians, folk musicians… many of them operate outside the traditional music-as-business mindset, because if they were to try to eke out a decent living, they would almost certainly be required to play music that is more predictable and mainstream than they are comfortable with.

The tradeoff, it seems, is that many musicians end up spending years doing exactly what they want to do, with no “boss” to speak of, and over time they are either able to make a modest living off of their following, or move on to making music that is more accessible. They may end up sticking to their guns, making music in many cases that is completely unmarketable, and the result is: you get to define the word “success” as it pertains to you. If your idea of success is traveling the world, driving sports cars, and eating overpriced cuisine, you’ll end up making rap, rock, or electronica. Radio-friendly fare. By comparison, relatively few jazz musicians are making seven (or even five) figures these days.

But if your definition of success is having people appreciate that you make unpopular (or less popular) music, in the interest of preserving long-forgotten musical traditions, or exploring new musical ideas, many people do that everyday without earning a dime.
Anonymous

Alright, I laughed out loud at the ghillie suited woodwind and brass sections popped up.
http://www.youtube.com/sxipshirey sxip shirey

You don’t need a label to “make it” this is partially true. I am independent artist and I do make a living. However not every artist is a business person and the maketing a label can provide can absolutely make an artists career. It is a VERY hard time right now to be a touring musician in the US. It is expensive to tour and clubs want to pay you less and less. It is a GREAT time to be Bob Dylan on the other hand. There are a handful of artist like him that are making more money. Self promotion and self business only works for a handful of people. In the US the music and art scene is becoming one of professional amateurism. We are culture that wants everything to be free. We are the ultimate consumers. Most of my peers go to Europe to perform and make a living because they find, as I do, no one, not the labels, not the clubs and not the people who “consume” music, want to pay for it in the U.S.
Mantissa128

Ah, how tiresome, although I appreciate them for coming out and explaining it straightforwardly.

I cannot WAIT for atomic-scale 3D printers to arrive, if for no other reason than to never hear again how artists must make money in order to make art.

Here’s a box. Get food, water, shelter and anything you need from it. Go away. Make art.

Sheesh.
anaglyph

>>The catch: the software that pays out those tiny sums doesnâ€™t pay if a video is embedded. This means our label doesnâ€™t get their hard-won share of the pie if our video is played on your blog, so (surprise, surprise) they wonâ€™t let us be on your blog

Actually, that doesn’t seem like it would be hard to implement though. The video, even if embedded, still streams from YouTube. This seems like a conscious choice from YouTube since it would (undoubtedly) explode their commitment to pay the record companies a tithe.
Mister N

People of OK Go:

I think the open letter contradicts itself with the subject. On one side it demonstrates how the label screwed them with the videos but they also defend them for needing money to pay artists, pressing cd’s , marketing, distribution, etc.

This band should see a video interview with Trent Reznor that appeared on Wired’s website. He basically explain why going independent and having a DIY attitude pays off than giving your creative power to the label so they do the manufactured work for you.

You have to realize that when you signed with the record label you signed away control over what you create ( it’s wrong but that’s how the record label’s pay for their shoes and put a little bit of that in a bank so you have an account . )

Related that we the people “no longer spend money actually buying the music you listen to” it’s a fabricated lie. Because in the past we the people didn’t either ( cassettes, cd-burners ). The difference is that before sharing music was invisible and now is massively exponential. Another key point to check is that artists are gaining more than before because more people listen to the music, watch the videos and share easily. They gain more in sold merchandise, concert tickets , festival tickets, special editions, etc. You gain where you have control and if you have a decent manager that can connect you to the venues where you can make money and pocket it without a middle man ( a.k.a the record label ).

Before you signed the contract you could have asked or read the fact that you give away control over the material you created. But you did and now you’re stuck with it.

Instead of sending letters to the people of the world trying to portray the evil side of the record labels ( duh ), creating arguments that people don’t buy music, and that you need the labels to make money and music, learn from your mistakes. If you were getting famous why did you give that up?, if you were so recognizable everywhere in the world why did you traded that for a contract?
Anonymous

I’m just curious of how many of the comments actually came from individuals involved on the business side of the music industry?? I’m going to guess the answer is “0″. While I do respect everyone’s opinion, the first comment from GTMoogle is completely obsurd. While the thought of not needing a label to succeed sounds nice to indie bands, it’s just not that practical. There are far too many bands/choices out there for consumers to choose from. Therefore, unless indie bands are able to position themselves from others while gaining the necessary recognition from mainstream media they will barely make a living from music, merch and ticket sales.

There is a substantial amount of capital and manpower needed to market one artist alone that most indie artists simply don’t have, that’s why labels, or more acurately, music companies will always be valuable to any band. Of course we see bands like Radiohead and Pearl Jam going off on their own to pursue thier remaining career on their own, but let’s get real, they’re Pearl Jam and RadioHead and it took the financial backing and marketing prowess of major labels to get them their.

Of course each member of an indie band can pitch in and help man the labor necessary to help market their band, but you have to realize that the artists need to write songs and record new material. If they attempt to handle all business endeavors on their own they would quickly realize that they are better off letting someone else handle these tasks.

Above, Cymk said it the best. “A new, and possibly future business model of record companies would be that of a PR/marketing firm” This statement is true, however there is more than just marketing that goes on behind the scenes. There are divisions such as Licensing, publishing administration, booking, etc. All of which, an indie band cannot handle on their own while also writing and recording additional material.

Reagrds,

Benjamin Wade Inman
http://www.zongmusic.com
Stephen

This is why Boing Boing puts ads directly in their RSS feed.