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The music industry has only itself to blame for sales lost to the Internet

By John Schumann - posted Thursday, 4 December 2003

On 18 November, three students were given suspended sentences for using the Internet to distribute copyright recordings. The Australian Recording Industry Association (ARIA) celebrated this result with a panoply of press releases and issued a warning that more successful prosecutions would follow. However, in the hoopla that has followed, no-one has thought to observe that Internet music piracy is due, in large part, to an abysmal lack of foresight on the part of the major record companies that comprise ARIA.

The record companies’ decision to resist rather than embrace the Internet has, in many ways, reshaped the music industry forever. Among other things, it continues to have the effect of alienating artists from their audiences. This is a thoroughly deplorable state of affairs as audiences and musicians are, by instinct, on the same side.

I put up a website recently, mainly as a source of information and lyrics for students who look at my songs in their English and Australian History courses. Once the site was registered with the major search engines, I searched for “I was only 19”. I was not entirely surprised, and in truth not entirely pleased, to find that the song is available in downloadable format, for free, from a number of sites. The irony is that these sites are often run by people who are dedicated and enthusiastic fans. What am I to do?


I find myself, as do many musician friends, on the horns of a dilemma. On one hand we write and record music so it can be heard and enjoyed by our audiences. On the other hand, it costs time and lots of money to record music and it is not unreasonable for writers, musicians, and indeed the labels we record for, to expect some return on the investment.

In the mid-1990s the Internet was in the middle of a serious growth phase. I remember discussing the issue with a couple of senior record company executives and suggesting to them that the Internet was about to rewrite the rules for the marketing and distribution of music. I suggested to them that their relationship with the retail sector, then marked by interminable and expensive piss-ups masquerading as product presentations, was about to change forever. I suggested to them that if they were smart they would seize this new technology and explore ways to get more music to more people more cheaply. (Lest people think I was unnaturally prescient, I hasten to add that I was far from alone in this view.)

It was clear to many of us that it was only a matter of time before people would be able to buy goods and services online with a credit card or via a direct-debit system. I remember suggesting to these executives that a label might well be able to put its entire catalogue online and have people download the songs they wanted on a fee-for-track basis. I suggested to them that a label’s most valuable and enduring asset was its catalogue and that it was only a matter of time before the huge new CD plants and the electronic stock control and distribution systems were going to be redundant.

In response I was solemnly informed that ARIA intended to resist the Internet with all means at its disposal. Anyone who distributed copyright music online would feel the full sting of the corporate legal slap and, having made well publicised examples of a few individuals and companies, life would continue on pretty much as normal. It took until November 18, 2003, for ARIA to be half right.

I think I was supposed to be consoled that in the name of their artists, the labels were going to sue our fans and lean on computer-nerd kids.

Strange as it may seem, there are some artists who are not young, blonde and pneumatic. These artists have catalogues of substance, variety and longevity but they are lucky if even some of their work is available in the mid or low-price product range. It follows from this that there is a great deal of our nation’s musical heritage lying around in various record companies’ tape vaults. How hard would it be for these songs to be digitised and made available for download for a small fee? The artwork and the liner notes could be thrown in for nothing.


If the record companies had embraced the Internet earlier, their distribution costs would be in decline by now and they would be earning money from their entire catalogue, not just the music on this week’s chart.

As far as the digital world is concerned, the major record companies are now well behind the game. Everyone else is fighting for the ball inside the 50 while the labels are wheezing along behind the play, shouting to the umpire that the game should stop and everyone should go before the tribunal.

Recent newspaper reports suggest that a proposed merger of Sony Music and BMG will go ahead. Equally, there are reports that some of Australia’s retailers plan to retail music via download from the Internet. If this is to happen, the major labels could well lose their production and distribution clout.

As you read this, a couple of the songs promoted by the wildly popular “Australian Idol” television show are being downloaded in the bedrooms 15-year-olds across Australia. I don’t know what this means for those of us who have catalogues of work locked away in record company vaults but I do know that a merged Sony Music and BMG could do worse than employ a few of these kids.

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This article was first published in the December edition of The Adelaide Review.

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About the Author

John Schumann is a writer/performer and runs his own Strategic Communications company in South Australia.

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