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David Crosby on why the music industry is doomed: http://www.pbs.org/wgbh/pages/frontline/shows/music/
interviews/crosby.html

A record [label] is essentially two things. It's essentially a vendor
and a bank. What they do, in terms of working with artists, the
old days -- and still to this day, to some degree -- is they give
you the money to make the record, for which they charge you
what amounts to a million percent interest. They give you the
money to make the record, but when they get the record, then
they own it and they do everything they can to cheat. Everything.
Recoupment.

They'll try to cross-collateralize it to everything you ever made.
So if they don't succeed with this record, they can hold up your
royalties on everything else you've ever done, to recoup. They try
to get some of your publishing if they possibly can. Of course,
we don't give it to them. They try to be able to sell your stuff in
packages. In other words, take pieces of your album, put them
with other people's pieces, and make package albums. We try
not to let them do that. They try to only pay you publishing on
10 end songs, which means, if you had 13 songs, you can't put
the other three on because they won't pay you.

I think one of the most glaring examples of what they do wrong
is they cheat as a matter of policy on paying, because they know
that you'll have to, first, hire an accountant and audit them.
Then, when you get the audit figure, and they owe you
$486,000, they'll offer you 30 percent, 30 cents on the dollar in
settlement, knowing full well that you'll ask for 100 percent and
that you'll settle somewhere around 50. The other 50 percent is
free money. They knew it going in. They intended to do it from
the beginning, so that they could get the other 50 percent for
free. Hence, just a little bonus thing, thank you very much, and
it's from heaven. And they do it, and it's totally dishonest. And
they all do it. And they do it as a matter of policy. They know
they're going to cheat, going in. ?

What's that like, for you?

You know, when I was making a million bucks on an album,
coming from where I came from -- I didn't have any money, I
didn't know that I would make any money at all. It was like
marbles. I thought it was fantastic, gift from God, wonderful,
you know. It takes you a long time to realize that you're being
cheated. Kids don't realize it at all, and usually their managers
are working a deal with the record company themselves, you
know. Very often, they're in the record company's pay as well.
You know, "Look, we'll give you $5,000 if you keep quiet."
Happens.

There's a lot of cheating and lying and stealing that goes on in
any major business. And the music business is no exception at
all. ?

I don't think that there's much we can do about it. They built
their business model in an era when they could make, I don't
know, on a million-selling album, you know, they're making 10
million bucks or something, and they do eight of those in a year.
That's what they built their business model on. And it seemed
reasonable to build huge buildings and hire hundreds of people
? and get a corporate jet or two. What a very grandiose idea of
how to go about things.

Now they're going in the tank, because the world has changed,
and they did not change with it. They bit the poison pill, without
realizing it, when they went digital. Once a thing is in digital
domain, it can be copied as many times as you want. And there
is no system that can keep it from being copied. You can devise
the most clever one you want, and I will bring some little geek
with a pen protector in his pocket into the room and he will fix it
in a minute. ?

They bit the poison pill, and it's killing them. And I think what's
killing them really, is that they have a bad business model that
doesn't coincide with reality. I think the only way to sell records
that I know about now that does look really, really, really
promising is iTunes. I think Apple is the smartest company in
the country, and they are doing something brilliant.

Why did that work?

Because it was simple, and it was already existing hardware. And
anybody could have done it, but Steve Jobs put it together. It
works like a charm. You upload it; they download it. They pay
you a buck or two. It's that simple.

You getting some hits from that?

You bet. And I'm going to get a lot more. No packaging cost, no
promotion, no lairs of distributors, each taking 20 percent off as
it goes by. No returns, no free goods, nada! [laughter] No costs!
That's a good business model that works, and it's working for
them. They're a brilliant company, and that's a brilliant idea. And
if I were in a position to invest in the stock market, which I
wouldn't be, it certainly would be Apple, because that's the one
that works.; Posted by: tic swayback Posted on: 06/02/04 You are currently: a Guest | Members login | Terms of Use