February 2, 2011

Attention: Legislative Committee on Bill C-32 [email protected]

Re: Bill C-32 – Debunking the Myth of Free Music

Discussion around copyright reform in Canada and the damage of file sharing on the Internet, inevitably gives rise to a small number of myths about the power of the Internet to provide new, successful business models.

Undoubtedly, the Internet provides new opportunities for marketing and promotion. It allows artists to engage their fans in new and exciting ways. The Internet has also made for a few remarkable stories of artist discovery but these anecdotes are very rare. My Space alone had more than 2.5 million hip hop and 1.8 million rock acts registered in May 2009, making competition fierce, whether for the attention of consumers or artist and repertoire discovery.

But perhaps the most frequently quoted story of the power of online marketing – a story often used to suggest that the negative impact of piracy is a myth and that posting music online is more lucrative for artists – is that of Radiohead.

The ubiquity of the Radiohead myth makes it an influential story and one that must be corrected in light of the debates regarding Bill C-32, for if uncontested, it might suggest to Canadian parliamentarians that there is no need to address widespread piracy on the internet.

Indeed, by looking at the facts surrounding the Radiohead release and the observations made since, it is clear that the Internet is not a replacement for traditional marketing of music and laws are needed to tackle widespread piracy.

The Radiohead Myth

In 2007, Radiohead, a band from the U.K., released their album In Rainbows online in a “pay-what-you- can” model.

This was touted as the model of the future and a sign that bands would no longer need to work with record companies in order to market their work.

In fact, the Radiohead experiment produced terrible sales results that reinforce the need for legislation to protect creators’ rights. Here is why:

1. The vast majority of people paid nothing. Internet monitoring company Comscore found that only 38% of downloaders paid anything for In Rainbows. ComScore reports that of those who did pay, $6 was the average price.

2. Pirates still bypassed the pay-what-you-want model and pulled the album from torrents: “On the first day that Radiohead's latest became available, around 240,000 users downloaded the album from copyright-infringing peer-to-peer BitTorrent sources, according to Big Champagne, a Los-Angeles-based company that tracks illegal downloading on the Internet. Over the following days, the file was downloaded about 100,000 more times each day—adding up to more than 500,000 total illegal downloads.” http://www.forbes.com/2007/10/16/radiohead-download-piracy-tech-internet- cx_ag_1016techradiohead.html U2’s band manager Paul McGuinness told BBC 6 Music's Music Week that "60 to 70 percent of the people who downloaded the record stole it anyway, even though it was available for free." http://www.nme.com/news/u2/37221

3. Radiohead’s extensive fan base wasn’t big enough to outweigh the impact of piracy Before the release of ‘In Rainbows’, the band had fourteen years together and six albums invested with fans. According to band manager Bryce Edge, the band's first six albums, released via EMI, had sold more than twenty-five million copies by 2007. And yet, for a well established band, the results were disappointing. While their devoted fans bought deluxe sets, millions of other listeners refused to pay even a dollar, stealing the album from bittorrent sites instead.

4. Radiohead disputes the suggestion that this is a viable model for the future, and that record labels are dead

Responding to whether the band would sign a deal to distribute physical copies of In Rainbows, manager Chris Hutton said: "Yes, absolutely. We've got about seven days to sort it out. We tend to fly by the seat of our pants.

"The band think they [are] incredibly proud of this record and feel that it deserves to be brought into the mass marketplace. That's why we need a record company who have that infrastructure to deliver the CD." "It's just another way of doing things," Hutton said. "Hopefully it will motivate artists and record labels to think about things a lot more and not accept the status quo." http://www.nme.com/news/radiohead/31555

Radiohead frontman Thom Yorke has said releasing In Rainbows solely on the internet would have been "stark raving mad". Yorke told BBC Radio 4's Today programme that 80% of people still buy physical releases and it was important for the band to have "an object". "We didn't want it to be a big announcement about 'everything's over except the internet, the internet's the future', 'cause that's utter rubbish. http://news.bbc.co.uk/2/hi/entertainment/7167759.stm

5. Radiohead’s band members have stated that it was an experiment and seem reluctant to try it again: In Sept. 2010, Radiohead drummer Phil Selway said the band doesn’t feel pressured to release their next album in the same manner. “I don’t think we’re feeling encumbered by that. That method of release was something that really excited us at the time. And it felt very appropriate to In Rainbows. But we’ve done that. And whatever we finish will probably lead us in a very different direction again in terms of how we release it.” http://www.torontosun.com/entertainment/music/2010/09/24/15466041.html Selway released his solo album on Bella Union in August 2010.

Trent Reznor and Saul Williams – another failed online experiment

On November 1, 2007, Trent Reznor and Saul Williams offered up Williams' "The Inevitable Rise and Liberation of Niggy Tardust", which Reznor produced, and gave fans the option to either download the album for free, or make a $5 contribution. "Here's what I was thinking," Reznor wrote in a debriefing posted at his website. "... I thought if you offered the whole record free at reasonable quality--no strings attached--and offered a hassle-free way to show support that clearly goes straight to the artists who made it at an unquestionably low price, people would 'do the right thing.' I know, I know ... Well, now I DO know, and you will to." According to Reznor's data, 154,449 fans had downloaded Williams' album as of January 2; of that number, 28,322 (18.3%) chose to pay $5 for it. "Is it good news that less than one in five [fans] feel it was worth $5?" Reznor continued. "I'm not sure what I was expecting, but that percentage ... seems disheartening. "Add to that: we spent too much (correction, I spent too much) making the record utilizing an A-list team and studio ... an old publishing deal, sample clearance fees, paying to give the record away (bandwidth costs), and nobody's getting rich off this project." http://www.livedaily.com/news/13446.html

Radiohead, Reznor and Williams deserve credit for trying to beat piracy by offering their work on a pay- what-you-want basis but the results illustrate that as long as a culture of piracy exists, this type of digital busking will not allow them to recoup the investment they’ve made in their work.

As you review copyright reform in Canada, therefore, I urge you to ensure that Canadian law unambiguously states that piracy is not acceptable in Canada and that you give artists the tools they need to protect their rights.

Sincerely,

Grant Dexter President, Maple Music